Gas decision should be by Knesset not cabinet

Yuval Yoaz

The Knesset should set the gas export quota but there is nothing to prevent the cabinet from doing so.

Deputy Attorney General (fiscal-economics) Adv. Avi Licht's professional opinion on the setting of the natural gas exports quota by the cabinet fills almost a full page. Licht recommends that the government arranges the setting of the export quota through Knesset legislation but the bottom line is that he also says there is nothing to prevent the cabinet from the making decision, although he is not comfortable with it.

The Ministry of Justice has already referred to the High Court of Justice petition that will be submitted on this topic as a fait accompli and in the coming few days a more detailed draft will serve as a basis to the response to the petitioners.

The significance of this is that while the Ministry of Justice understands that the cabinet has decided to ignore the recommendation of legal bodies to pass the final decision on gas export quotas onto the Knesset, there is no intention to break rank and abstain from defending the cabinet decision before the High Court.

Attorney General Adv. Yehuda Weinstein who is on a working visit to London did not sit in on this morning's cabinet meeting and ordered that Licht's opinion should not be published although it has been partly leaked. In terms of the code of behavior between Weinstein and Prime Minister Benjamin Netanyahu, the legal opinion contradicting a cabinet position is distributed only if there is no chance of reaching a verbal understanding on topics of legislation and policy or if the Attorney General decides that a particular position is unconstitutional and cannot be upheld by the High Court. This is not the case in this instance either because of unconstitutionality or because there is no chance of an understanding between the personalities involved.

The legal anchor for the cabinet's authority to set for itself the natural gas export quotas is in the Fuel Law enacted in 1952, and is not connected to the law which Sheshinski dealt with on taxation from gas production. According to a clause that was amended in 1989, the Minister of Energy and Water Resources is allowed to require the drill owners to provide, at market price, "the amount of oil and oil products for Israel's needs."

The legal question that arises is if this clause authorizes the cabinet to take an individual decision about a particular quota for domestic gas use over a given period, or if the decision covers all possibilities such as arrangements for limiting exports for the coming years.

Technically speaking the clause does not prevent the cabinet from setting "Israel's needs" for future generations, although the spirit of the law pulls in the direction of the opposite conclusion. The Fuel Law is a detailed law that arranges in fine detail the subject of licenses, regulatory areas and government supervision, tax exemptions on required products for oil production, and even goes down to setting instructions for requisitioning required land.

It is not reasonable that such a legislative formulation as this leave a fundamental decision on such a matter as gas exports to the cabinet or the minister responsible for the law as if it was but a technical regulation. This is the decision that the High Court justices must rule on.

In any event, the decision on an appropriate route for the arrangements - whether the Knesset or the cabinet - has no bearing on the content of what is being decided. In other words, the Ministry of Justice is not influenced by whether the cabinet wants to keep 90% of the natural gas produced for domestic use or the 60% as set. In both cases the bottom line is the same - setting a quota by the cabinet unacceptable but permitted.

Published by Globes [online], Israel business news - - on June 23, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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