Sheshinski: Technology limits gas competition

Eitan Sheshinski

Professor Eytan Sheshinski told Galei Zahal that natural gas prices must be to some degree in sync with global prices.

Professor Eytan Sheshinski was interviewed on Galei Zahal (IDF Israel Army Radio), and addressed the storm surrounding Israeli Antitrust Commissioner David Gilos resignation and the development of the Leviathan natural gas reservoir.

Sheshinski, who was last week appointed advisor to Energy Minister Yuval Steinitz, said, The question of ownership of Leviathan existed from the start. Gilo suggested leaving the ownership as is, and to transfer ownership of [the] Karish and Tanin [reservoirs] to other owners. I didnt believe in this, because they are small reservoirs.

The Leviathan problem remains.

Right. Gilo changed his mind and offered other solutions. You have to understand that the use of the word competition here is misleading. Separate marketing was suggested, but the meaning here is different. You cant think of it as competition here. This is not a competitive model that stands a chance of leading to low prices.

So why did Gilo resign?

There were differences of opinion even within his professional team. Other teams suggested other solutions. What remained on the table, and the team did not offer a solution for this, was what the prices for consumers and Israel Electric Corporation (IEC) would be. The prices must be to some degree in sync with global prices.

Was Gilos resignation a populist move?

Absolutely not. He believed in it, but people looking at a competitive model were of a different opinion. The technology limits the competition, which is why its necessary to focus on the rates that the various consumers will pay.

When will we see gas from Leviathan?

Im not worried about it, but the global trend is that gas prices are dropping. We need to stay ahead of this, and to act out of rational considerations.

Published by Globes [online], Israel business news - www.globes-online.com - on May 27, 2015

Copyright of Globes Publisher Itonut (1983) Ltd. 2015

 
Eitan Sheshinski
Eitan Sheshinski
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