News Analysis: Setback over natural gas deal highlights weak position of Israel's minority government

Just two months in office, the Israeli government met with its first major hurdle last week, as Prime Minister Benjamin Netanyahu had to withdraw a vote on a natural gas deal formulated by the government, as it became apparent he has no majority to pass the resolution.

The issue of the fate of the natural gas discovered just a few years ago off the Israeli coasts in the Mediterranean Sea has been prominent on the Israeli public agenda.

A government committee, after long negotiations, formulated an outline that would enable the Texas-based Noble Energy Company and Israeli Delek Group licensee to develop major gas fields in the upcoming years.

Netanyahu pushed forward the resolution, and got the support of cabinet ministers, but then, following the resignation of the antitrust authority commissioner David Gilo, a technical clause had to be voted on to bypass him in Knesset (parliament).

After much drama, Netanyahu withdrew the proposal from the Knesset's agenda, after realizing he doesn't have a majority.

Netanyahu and others supporting the deal say it is the best way to develop the gas fields and get natural gas flowing in pipelines, from which he says the Israelis will benefit.

Objectors, on the other hand, say the deal, which would have crucial consequences for the Israeli market, was formulated in backrooms, consolidates the two energy companies' monopoly of the resource and does not include regulation or caps on prices for Israeli consumers nor encourage competition.

This ordeal has brought to the forefront two major facets, among others: the fragility of Netanyahu's 61-member coalition in the 120-member parliament, and the public criticism against the back-door deal they believe is in the best interests of the tycoons and not theirs.

Public outcry

In 2011, hundreds of thousands of Israelis took to the streets to protest the high costs of living and capitalist cronyism, and called for social justice.

Although those protests died out, the Israeli public became more aware of social-economic issues and thousands protested across Israel in the past two weeks against the deal, possibly influencing parliament members who wish to be reelected.

Israelis have also staged protests in recent years and boycotts as food items and toiletries are more expensive in the country than many other places, with Tel Aviv being the third-most expensive city to buy beer in, for example.

It is not surprising that Israelis voiced their concerns over the outline, as the future of the energy market would have significant consequences on the Israeli economy.

"It took some time, but now Israelis are starting to realize the magnitude of monopolies and the consequences of the control of the few rich ones over the Israeli economy," Idan Leibs, a researcher at the Haifa University on Natural Resources and Environmental Research, who presented a paper on the future gas outline, told Xinhua.

"They no longer believe the government has their best interest at heart, the Israelis realize they are the weakest chain in the link -- other than the state and energy companies. Furthermore, Israelis are supposed to gain from natural gas revenues, but they also consume it so it's in their interest to keep the prices low," Leibs added.

Orly Bar-Lev, a prominent social justice activist, who has been active since the 2011 protest and took part in a meeting on the natural gas outline in the Israeli Knesset, said that Israelis are "starting to realize their power."

"In the past several years there is a definite awakening and awareness among Israelis over these issues," Bar-Lev told Xinhua.

"This fight goes way beyond the natural gas issue, it's about capital cronyism, it is an informed civil awakening which sets out to expose the theft the government is trying to hide," she added.

"We realize that we can make a difference, and we will go on and fight this outline, and this is the big change that's occurred since 2011," Bar-Lev said.

On the other hand, some say the objection to the natural gas deal is driven by populist slogans and the public cannot make judgments on complicated professional matters.

"Natural gas is not cottage cheese," Yaniv Fagot, a chief strategist at the Eilon Finance Company, wrote in an opinion published at the Globes economic daily, referring to a consumer ban on the popular cheese over its high price which took place several years ago.

"In this critical issue, Israeli citizens shouldn't be dragged into this professional debate. The debate over natural gas, the market and regulation, is for professionals only, and is far from being an intuitive argument on which everyone can develop an intelligent critique of the issue," he added.

"The average citizen is not aware to all the nuances in the professional debate regarding the optimal structure of the energy market, this is a super tough choice to make based on endless economic and geopolitical considerations," Fagot wrote.

Political aspects: a fragile coalition

Netanyahu was unable to establish a majority in his coalition as several ministers, including popular Finance Minister Moshe Kahlon, refrained from voting as they declared they are in conflict of interest, due to contacts with key figures in the energy market.

Avigdor Lieberman, the former Foreign Minister and Netanyahu's former ally, who refused to enter Netanyahu's coalition, said that although he supports the outline, he will not support the coalition in this vote. Therefore, Netanyahu decided to postpone the crucial vote.

This was the first major battle of Netanyahu in the coalition, which he had lost, at least for now. Is it the shape of things to come? Will Netanyahu's coalition be able to last four years in office?

"Netanyahu found out the hard way that there are no friends in politics," Yossi Verter, a political pundit for the Ha'aretz daily, wrote in his column last week amid the recent developments.

"The prime minister built the relationship with political partners based on foundations of extortion, brute force and suspicion and has no one to call on in times of distress," he wrote.

Verter said the recent thwarted vote on the natural gas is a "trailer" of things to come due to the frailty of the coalition and ministers are "acting as if the next elections will take place sooner than expected."

"Every coalition member who doesn't want to vote for some clause of a bill would be able to say he has conflict of interest and the finance minister, who is using this argument as well, can't say anything about it."

Furthermore, he adds that parliament members are "more aware than ever" to the public perception of them and may not sign off on unpopular moves by the government.

He concludes that this incident, among others, stresses Netanyahu's urgent need to expand his coalition in order to stabilize it, with either Lieberman's Israel Beytenu or the left-wing Labor party, which would necessitate more changes in Netanyahu's coalition. Endit