US diplomat urges Israel to resolve the deadlock in gas industry

Amos Hochstein, a senior US state department official and special envoy on energy issues, said Israel's regulations were deterring energy companies. In an interview with Calcalist, a business daily, Hochstein said that energy companies prefer investing in Egypt over Israel and urged Israeli politicians and regulators to solve the deadlock in Israel's energy sector since the High Court of Justice rejected the stability clause in the natural gas regulatory framework late March.

"Stable regulation is a must and it doesn’t matter how, but it has to happen fast," Hochstein said. "It is a subject that came up in the past in my talks with the Prime Minister, Benjamin Netanyahu."

Hochstein said that if Israel wishes to become part of the global energy market it has to join it as fast as possible. "You've got to understand that economic stability is more important than security," Hochstein said. "Between Israel and the US there is a consensus in regard to the intents as well as energy world view. It is economic security, and no commodity would have done it [strengthen relations] better than natural gas. The [US] energy secretary [Ernest] Muniz was here [in Israel] and that indicates our intention."

Energy as a Regional Catalyst

Hochstein said that the US believes that energy can be a catalyst to strengthen cooperation and prosperity among the nations in the region. "States have to see themselves as part of a neighborhood and not as states that operate separately from each other," he said. "Therefore development for one's own goals is one thing, however, to become an international player is another goal."

The first goal, Hochstein said, requires a high level of demand for gas in order to justify the huge investment. The second goal needs infrastructure. "It has to be seen how we bring countries to consume gas and even giving them incentives. And that is why I am here, in Cyprus, in Egypt and in Turkey. I believe that there is a great potential which has yet to be understood." He said that the longer it takes to use the resource, the less will be the benefits.

According to Hochstein, a country cannot base its energy market on spot transactions and therefore Jordan, which currently enjoys relatively cheap LNG from Qatar needs, in the medium and long term, Israeli gas.

Hochstein said that Turkey and Egypt are also interested in Israeli gas. "I don't say it for nothing. I base my view on talks I held with the other side and it is possible to see it happens. However the time for it to happen is now."

Ya'acov Zalel