Israel’s Natural Gas Sector- Too Big Too Fail

 

By David Bryan

25 Then Joseph said to Pharaoh, “The dreams of Pharaoh are one and the same. God has revealed to Pharaoh what he is about to do. 26 The seven good cows are seven years, and the seven good heads of grain are seven years; it is one and the same dream.27 The seven lean, ugly cows that came up afterward are seven years, and so are the seven worthless heads of grain scorched by the east wind: They are seven years of famine.

28 “It is just as I said to Pharaoh: God has shown Pharaoh what he is about to do.29 Seven years of great abundance are coming throughout the land of Egypt, 30 but seven years of famine will follow them. Then all the abundance in Egypt will be forgotten, and the famine will ravage the land. 31 The abundance in the land will not be remembered, because the famine that follows it will be so severe. 32 The reason the dream was given to Pharaoh in two forms is that the matter has been firmly decided by God, and God will do it soon.

33 “And now let Pharaoh look for a discerning and wise man and put him in charge of the land of Egypt. 34 Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. 35 They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. 36 This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.” 

Genesis 41: 25-36 NIV

 

Incidentally for a nation to move forward, it will most certainly have to look inward, in order to accomplish what is right for its people and the state. This is exactly the essence of what transpired after Joseph was able to interpret Pharaoh’s dreams. National interest took precedence over all other interest.

‘Joseph gave the king a survival plan for the next 14 years . The only way to prevent starvation was through careful planning; without a famine plan, Egypt would have turned from prosperity to ruin. Many find detailed planning boring and unnecessary. But planning is a responsibility not an option. Joseph was able to save a nation by translating God’s plan for Eygpt into practical actions’ based on proper implementation.

Joseph had to build an infrastructure to house the grain -establish a complete ‘new’ system unknown to any other nation from the bottom up- to distribute and sell 7 years of abundance for the duration of 7 years of severe famine for not only Egypt but also “all the countries [which] came to Egypt to buy grain from Joseph”.

The natural gas industry in Israel, akin to the ‘grain’ industry of Joseph’s era cannot be discounted and treated in a nonchalant manner. It must be accorded the highest priority for a total comprehensive overhaul of its laws or the implementation thereof of rules and regulations to govern this important sector of the Israeli economy.

Prime Minister Netanyahu ‘s stance to treat the gas sector as one of national security therefore, is not mis-guided, due to the extenuating circumstances, in which there was a halt in the production of the natural gas between the gas companies.

However, it is for this reason, that if this is the high road in which, the basis that the energy sector is modeled and treated as – then there can be no better example in the model of Israeli security forces, being one of the best in the world.

Forces, where discipline, a properly regulated IDF, central command centres, rules and regulations governing the establishment and the interoperability of the said army, navy and air force . Thus, the bar is set high by Prime Minister Netanyahu, as such, the standard for the gas industry must be, without fail, exemplary.

Israel cannot forfeit the family silver for any “bowl of porridge” under any agreement, nor implement piece-meal regulations that would deny “securing the country’s energy independence and promoting natural gas as “a source of tax and royalties revenue”.

That said, one must recognize that the current gas companies Delek Group and Noble are not the “enemies”. They cannot be blamed for the unregulated system in which there are operating.

It would be an affront to the principles of natural justice and the rule of law to arbitrarily “mandate the immediate and urgent cancellation of the gas outline.” This solves nothing.

As long as there is consensus, the proposed interim solution between government and the companies should proceed and be honored with the (a) selling of assets within six years (b) Noble Energy basin operator-dilute share ownership from 36% share to 25% and (c) sell their holdings in Karish and Tanish.

This would allow the industry to jump-start the production of the gas industry, but ‘running’ parallel to this should be the undertaking by the government within the shortest possible time to adequately address the deficiencies of the sector as listed below and implement the core recommendations of the report of Joseph Shapira “Development of Natural Gas Sector” in Israel.

This report is indeed timely and ‘praised by the Likud party’ and acknowledged by the gas companies. There is no point in re-inventing the wheel; and seeking to establish committee upon committee when there is already a meeting of minds for “one outline for one people”.

It should be out of necessity and that of competitiveness, the Israeli government move with alacrity to appropriately address, including but not limited to the following as a priority :-

  1. ” absence of central natural gas storage spot;
  2. no proper system for storing gas, which puts undue pressure on the State to extract it faster;
  3. failure to set guidelines for pricing guidelines, natural gas on the market including deciding the extent and method of oversight there will be on pricing;
  4. gas must be competitive-as long as there is a monopoly in the area of supplying natural gas.
  5. show pace of actions;
  6. policy shortcomings;
  7. incomplete regulations;
  8. lack of effective action;
  9. absence of a clear policy;
  10. inefficient system of distribution of offshore licences and in development of small gas fields;
  11. delays in operation of a gas storage reservoir;
  12. inadequate environmental regulations for the gas industry;
  13. lack of policy concerning taxation of gas exports, and price controls;
  14. delay in issuing regulation in gas royalties;
  15. lack of coordination of different arms of the natural gas policy leading to measured delays and mis-understanding in states exploration of natural gas reservoir i.e uncoordinated delays, years of delays prior to decisions, frequent changes in those said decisions and subsequent uncertainty generated
  16. lack of competition
  • threat of
  •  one natural gas supplier which hold a monopoly
  • one drilling company for the Tamar reservoir
  • one pipeline for distribution of gas of limited capacity

The ideal solution to the deficiencies and assist in jettisoning the legislation “would be to concentrate authority over gas within a central regulator governed by the Energy Minister”. This may help boost confidence in the building of any cross-border trade relationships for instance in the possibility of Cyprus and Israel landing a pipeline to Egypt.

The only drawback is that, Israel should from hereon in, ensure that such projects and those in Israel that rely solely on one company are now fully redundant; given the threat of the volatile security situation in the Middle-East.

There is no doubt the natural gas industry has the unique potential for enormous financial benefits and could be the game changer for the Israeli economy, if it is properly regulated. It can transform the Israeli economy, but there must be an open market philosophy buoyed by competitiveness, transparency and accountability-it cannot be a closed shop for the elite.

The legal framework has to be build out, where the rules and regulations are drafted and passed in the Knesset, allowing for the opening of even auctions or the establishment of a Sovereign Wealth Fund as done in Norway for the future development of Israel.

The resources of Israel belong to the people of Israel and the State. Government has a fiduciary duty to ensure good governance and that a fair market value price is paid for the natural gas resources. Nothing less than this would be acceptable for Israelis- after all it is their security that is the number one goal.

                                             ***

 

ISRAELI- PALESTINE CONFLICT

I believe, the time has come, and concur that Israel should engage in constructive dialogue with the Palestine Authority in Brussels together with the European Union. Both parties should use this opportunity “to lay out their respective positions” on the way forward in the current impasse.

It is imperative that each party “listen” to what the other is saying and then “talk”; for lasting peace can only come from genuine conversation.

 

 

An Essay: Agreement or Not – It’s About the Bomb

By David Bryan

This article is not about the merits and or the demerits of the exhaustive details of the recently concluded nuclear framework agreement signed between USA, Britain, Germany, France, Russia, China and Iran. I defer those arguments to the dictates of the politicians. Suffice to say, during this period of debate, the business of the people should not wholly be neglected, but punctuated with the collective will in order to implement the specific areas of reform.

From the outset, this agreement should be placed within the historical context which led to its conclusion. The genesis of the negotiations, as adumbrated by President Rouhani of Iran in his statement of July 15th, 2015; that

“In effect, from the first day of the nuclear problem-that is 12 years ago- the path to negotiations, began, on order from the leader [Ali Khamenei], and since 2003 we have continued these negotiations in Tehran, in neighboring capitals, and in Western European capitals”

Seemingly, Iran’s “nuclear problems” originated 12 years ago from the period 2003 to 2015 under the  principal governments of Bush, Blair,Brown, Cameron, Schroder, Merkel, Chirac, Sarkozy, Hollande, Qinghong, Xijingping, Putin, (Sharon, Olmert, Netanyahu) and Obama. So it took just about 16 world leaders over the span of 4, 380 days to conclude this agreement.

Thus, the premise that one government, President or Prime Minister can be blamed for the omission and or commission of Iran’s nuclear infrastructure must be strongly refuted. Iran established, itself, as an “illegal” or “de jure” nuclear power. What the agreement facilitated was the ratification of its nuclear architecture from “illegal” to “legal” or “de facto” recognition within the international atomic community.

The agreement outline the working parts on how Iran is to be guided in the operation of its existing nuclear facilities  and infrastructure established 12 years prior to 2015. The agreement never referred to the dismantling of that regime; its goal was and is to bring Iran into the existing nuclear fold with obvious limitations.

For the most part, then, President Obama together with his counterpart leaders oversaw the culmination of these twelve years of negotiations inclusive of the work done by their predecessors. This in no way should grant anyone form criticism, since Joe Public is interested in how such a significant agreement is going to affect him.

It is quite understandable why President Obama’s is adamant on his explanation that every pathway by Iran to a nuclear bomb has been prevented or curtailed. Prime Minister Netanyahu and those who vehemently oppose the agreement argue otherwise, but what was not reiterated enough is this: ‘There is and will never be the perfect deal’. In a utopian world, this is the ideal scenario, but we all know, this is outside the scope of realistic goals and objectives.

So, if one therefore, accepts this undeniable basic truth- then rationality will begin to intercede and illogic would be replaced with practicality. Consequently, this writer is concern with one thing and one thing alone- that is Iran’s ability to have, or manufacture a nuclear weapon or weapons of mass destruction with or without an agreement. Exclusive of anything else, all things are secondary.

In his words of appeasement, President Rouhani indicated further in his statement that:-

“Iran will never aspire to a nuclear bomb, whether there is an agreement or not, and whether it is executed or not”

He went on to being more prophetic by saying;

“We see the security of the region as our security and the stability of the region as our stability. Iran does not and will not aspire to obtain weapons of mass destruction”

These comments were followed the next day by the Supreme leader Ayatollah Ali Khamenei, but from a different perspective, one of defiance;

“We will never stop supporting our friends in the region and the people of Palestine, Yemen, Syria, Iraq, Bahrain and Lebanon. Even after this deal our policy towards the arrogant U.S will not change”

Indeed both Rouhani and Khamenei’s are ‘correct’ in their contradictory statements. This dichotomy only strengthens my postulation. What type of “support” is the Supreme Leader speaking about? Is this an admission of supporting extreme covert and overt activities?

Regardless, it has to be made clear within this “new atmosphere” and the “new era” of global reign of international cooperation between nation states and kingdoms, any attempt by Iran to have and or aspire to have a nuclear bomb or obtain weapons of mass destruction whether there is an agreement or not whether it is executed or not will attract the appropriate military and or economic response.

There can be no mistake that the security and stability of the U.S allies namely Israel and the Middle East region transcends this agreement both in form and in substance. For the sake of clarity, put another way, this deal must not change the dynamic towards Iran as it relates to its effort for the procurement of any nuclear device or weapon of mass destruction.

In, contrast; the agreement can be heralded as an achievement for the liberation of the Iranian people, who should enjoy the same rights of any other global citizen in the freedom of economic enfranchisement. But, freedom comes with a price of responsibility. Caveat emptor– Iran should carefully avoid using this agreement as a licence to employ its “new” economic resources to indiscriminately engage in the blatant “support” and export of terror to and with its “friends”.

On the other side of the coin, running against the grain of conventional wisdom, this agreement has created the unique situation in which it does the complete opposite to what the Iranians tried to avoid- it has zeroed in on their involvement of terrorist activities. The question of state sponsored terrorism, its funding, human rights abuses and the release of political prisoner(s), as an act of good faith, held by Tehran were all ancillary to the nuclear question. These topics must be shuffled to the top of the agenda, because of the agreement.

Since, by its very nature, the agreement now recognizes Iran as a legitimate nuclear state. Iran,automatically, will be held to a higher standard. Greater scrutiny and monitoring has to be demanded- not less of Iran’s economic, social and political activities including but not limited to any significant financial transaction, commercial or public, trade deals, movement of capital within institutions, purchases for the military, arms inter alia.

Although the international community has agreed to grant sanction relief, there is nothing to prevent the implementation of swift sanctions on Iran in the event there is evidence of state sponsored terrorism with its friends. Nor can the notion of future UN security resolutions be ruled out, if again, Iran is involved- once there is overwhelming evidence of terror proves true. This, of course, has nothing to do with the additional ‘snap back’ sanctions in the agreement.

Upon reflection, I am therefore, diametrically opposed to the statements that the signing of this agreement was a “dark day for the state of Israel” and “it would be better to let Iran get the bomb without an agreement than to have this agreement”. In my view, again, I posit that this agreement has altered the dynamic in favor of Israel and its regional allies such as Egypt, Jordan and Saudi Arabia. It should be seen as an opportunity, a challenge to grow against the state of inertia.

Israel was never built on fear of any threat, but on strength and courage of its ability to exist. Nor will Israel’s security be compromised. But, it has to seize the occasion and avoid comprising any valuable assistance in maintaining Israeli military supremacy for the future of its people.  So as to always be on the cutting edge, because of this agreement, in order to safeguard not only its sovereignty, security and stability but that of the Middle East region and the world.

Israel has the right to add its voice to the debate relating to its security –regardless of the outcome of the fate of the agreement. What is agreed and certain is the policy towards Iran should and must remain the same; that is the complete and total denial of Iran possessing a nuclear bomb or a weapon of mass destruction -which is absolutely nothing “new”.

Israel has been in existence for the last “12 years” before this agreement and it will certainly exist until God returns.

 

 

 

Translation: “No” to Austerity is really “Yes” to Debt Relief

By David Bryan

The referendum by the Greek people though symbolic in the results and dramatic in nature; is testament to the word “democracy”; where the Greek origin of ‘demo’ means ‘people’. So the rule of- over 60 % of- the people was a resounding “No”. What does this really entail for the Greeks and its government?

Apart from proving the point that “outward reform begins with inward renewal”, the referendum was an exercise in “two steps forward and one step backward” approach. I say this without apology, since the referendum has created more mis-conceptions, doubt and economic dis-location instead of bringing a semblance of more clarity and confidence to the Greek economy by solving the monetary malaise with the European Union, European Central Bank and International Monetary Fund.

The “No” vote re-reinforces or really renews the platform in which the Greek Prime Minister Tsipras and his party was elected; which was really “No” to any more austerity from the EU. If you understand that, then everything else shall fall into perspective.

It follows therefore, that a “No” vote to austerity cannot and could not be a “Yes” vote for a Greece exit from the European Union, monetary or otherwise on any given day,week or month of the year. Put another way a “No” vote to austerity does not mean repudiation of the Treaty of Lisbon. These must be treated as two separate and distinct issues.

There has to be and must be; a clear and express question on this fundamental issue; “Whether Greece should remain in the EU ?”– in the event such a decisive and deliberate intention is made too sever ties with the EU. Consequently, the Greek government was not elected on such a mandate, thus the Prime Minister cannot proceed on any “perceived” implied authority to do so.

Indeed, what he can do; is ask for a another referendum on such a question. How can a “No” vote mean a Greek exit, when no such question was put to the Greek people. The “No” vote does exactly what it says it does; which is “No” to any further austerity measures.

Paradoxically, the Greeks voted on really “No” austerity measures since, none were on the table at the time of the vote due to the fact that the country was “officially” in default of the IMF loan of over 1.3 billion Euro dollars. In addition, it must be reminded, that even the “austerity measures” put forward by the Greek PM for the 2 year extension was given a “No” by the European creditors.

When you remove the “smoke and mirrors” it comes down to : what the Greece PM was elected to do in the first place by the Greek population: that is to say; to say “No” to any more “austerity”. So here we have it- the government of Greece became the first country in the entire world to default on an IMF loan, to put its economy in peril, to put its people through unnecessary pain and hardship, to cause the banking system to closed for 5 days and is now on the brink of running out of liquidity- for the simple reason, so as to return to the “polls” to vote on the very same thing PM Tsipras was elected to do in the first place.

And now, to appear as though he is leading a triumphal procession back to the negotiators with a “new” mandate is mis-leading. So forgive me, when I do not share in the euphoria, when ordinary people cannot get access to their money -how can their be celebration- when people are suffering, when pensioners , companies and businesses are on the verge of ruin-literally because of some Machiavelli stunt.

Months of negotiations wasted, in which this crisis could of been averted. I dare say, both sides have had their short-comings, but in the end, the Greek PM only ended up with a “double” mandate to avoid austerity but “No” does not mean “No” to realistic measures to fast-track economic order for the Greek economy to place it on the train of economic growth for the people.

My prayer is that the people of Greece would be granted relief from their dire economic circumstances by wisdom and good judgement prevailing.