Notes from the Knesset: US Interests and Regional Politics of Israel's Gas Framework
American interests are showing impatience due to the delay in the approval of the natural gas regulatory framework in Israel, representatives of the Israeli Foreign Office have argued during a hearing at the Knesset's (Parliament's) Economy Committee.
During proceedings, Dore Gold, the Ministry's Director General presented a paper, issued by the U.S. State Department, titled "Investment Climate Statement 2015." In that document, the State department expresses concern because of Israel's antitrust authority's decision not to exempt Noble Energy from Israeli antitrust law.
"Particularly concerning was the December 2014 announcement of Israel's Antitrust Authority (ATA) that it may declare that the U.S company developing Israel's offshore gas [Noble Energy] and its Israeli partners are party to an agreement in restraint of trade… This antitrust threat is having a chilling effect on further investment in the sector," the paper says.
In his testimony to the Economic Committee, Mr. Gold also spoke about relations with Jordan. Mr. Gold said a Letter of Intent (LoI) signed with the Jordanian electric company (NEPCO) was obtained as the Jordanian government took on a political risk. He said the export agreement, which will prevent export of Iranian natural gas to Jordan, was important for Israel as it could strengthen ties with Jordan.
"Securing of Israeli gas to Jordan is an Israeli strategic interest and a confidence building measure," said Mr. Gold. "Gas supply won't bring peace [though a peace treaty between Israel and Jordan was signed in 1994 and is still valid] but it has the potential to strengthen peace in the future."
Mr. Gold predicted that the Palestinian Authority will backtrack on its announcement from earlier this year, in which it cancelled an agreement to purchase natural gas from Israel, since it is lacking energy sources in its territory.
As for Europe, Mr. Gold said that European countries are interested in Israeli and Middle Eastern natural gas in order to diversify their gas resources. He said that due to the continuous turmoil in North Africa, security supply from that region was affected while Middle Eastern gas supply also can be a counterweight to the European dependency on Russian natural gas.
"If we are successful at developing Israeli gas, Cypriot gas and Egyptian gas, this quantity gives us utmost importance to European energy security," said Mr. Gold.
Mr. Gold also mentioned the U.S.'s role in the export agreements, saying that the U.S was "the main bridesmaid" in Israel's gas agreement with its neighbours.
When asked questions Israel-Egypt relations, Mr. Gold said those relations are complicated and multi-layered and that Israel has to look at the whole regional picture. He said that if Jordan does not get Israeli gas it might be supplied by Iran, when the Iranians will lay a pipeline that passes all across Iraq.
In order to clarify the gas agreement's political aspect, Mr. Gold said that "we don’t say that Israel [through gas agreements will] secure either Egypt's or Jordan's stability. If we can supply energy it is a good thing."
Ron Adam, a Foreign Ministry official, said that Jordan needs the gas in order to generate 50% of its electricity. He also said that the Director General of the Cypriot Foreign Ministry told him that the Europeans will also fund an interconnector between Cyprus and Europe following a feasibility study funded also by the Europeans.
"Natural gas is a strategic asset," said Mr. Adam. "Countries are waiting breathlessly for the framework's approval. The moment the framework's approval fails, Israel's image will be totally damaged".
Ya'acov Zalel