Israel’s Supreme Court strikes down key provision of government’s natural gas deal
Published March 27, 2016
Demonstrators in Tel Aviv protest the Israeli government’s support for a deal that would give two energy companies control over development of most of Israel’s offshore gas deposits, June 27, 2015. (Ben Kelmer/Flash90)
JERUSALEM (JTA) — Israel’s Supreme Court struck down a key provision of the government’s controversial natural gas deal.
The high court on Sunday struck down in a 4-1 ruling the stability clause, which guarantees that the current and future governments will not change the deal or place regulatory changes on the gas industry for the next at least 10 years.
The court gave the government a year to amend the agreement.
The court in its ruling did not object to the government’s use of clause 52 of the Restrictive Trade Practices Law, which allows the economy minister to approve a monopoly if it is a matter of national security, in order to push the deal through last year.
Israeli Prime Minister Benjamin Netanyahu criticized the deal in a statement released by his office on Sunday evening.
“The High Court of Justice decision severely threatens the development of the gas reserves of the State of Israel,” Netanyahu said in the statement.
“Certainly nobody has any reason to celebrate that the gas is liable to remain in the depths of the sea and that hundreds billions of shekels will not reach the citizens of Israel,” he said.
“We will seek other ways to overcome the severe damage that this curious decision has caused the Israeli economy,” Netanyahu concluded in his statement.
The statement also criticized the court, saying: “Israel is seen as a state with excessive judicial interference in which it is difficult to do business.”
The deal would allow allow two companies, Texas-based Noble Energy and the Israeli Delek Group, to retain majority control of the Leviathan field for 10 years after the gas begins flowing in exchange for reducing its holdings in three other gas fields.
Leviathan, discovered in 2010 in the Mediterranean Sea west of Haifa, is estimated to hold 16 trillion to 18 trillion cubic feet of gas.
Thousands of Israelis have protested the deal and called for the gas fields to be nationalized, concerned that the gas consortium will keep prices high and agree to export much of the gas.
