Beating the Nationalist Drum and Israel’s Oil Interests



Israel needs to move away from nationalist oil rhetoric and pursue renewable energy projects instead

I was astounded to happen on the full-page advertisement on the back of the business section in the October 10, 2010 issue of  Maariv. “Israeli Gas or Arab Gas: What Do You Prefer?” read the central heading. The Arabic writing on the wall was translated: “Someone wants you not to understand.”

Striking a xenophobic tenor, the ad explains that “a year ago a large deposit of oil was discovered off the coast of Israel. Oil production from the new well would cancel Israel’s dependence on foreign-Arab sources and provide Israel with great resources for decades to come.” The article fails to note that the  reserves in the Leviathan field have yet to be proven.  

 Delegitimizing the Public Outcry

But then comes the pith of the advertisement, the boogie that it seeks to raise. It decries “various groups…that are applying pressure on the government to increase the royalties and taxes spitefully [davka] on blue-and-white gas.” These groups, the ad asserts, have behind them the New Israel Fund (NIF), a left-wing Israeli philanthropic organization supporting progressive causes in Israel.

The NIF is also the subject of smear campaigns by right-wing demagogues. In today’s political climate, associating individuals, organizations and causes with the NIF is a clear  (and cheap) attempt to delegitimize the subject at hand.

The ad represents an attempt to discredit the many Israelis from different quarters who challenge the country’s low royalty rates for mineral extraction by private companies. The current tariff was instituted in the early years of the state and is one of the lowest in the world.

It is the subject of scrutiny by the Finance Ministry’s Shishinsky Committee and responds to calls for a greater public share of the huge revenues that Israeli energy companies like Yitzhak Tshuva’s Delek Group (there are others, lesser known) stand to make from potential finds in Israel, on land or off-shore.

An Attempt to Sandbag Reform

The Delek Group has partnered with an American petroleum corporation, Noble Energy, in oil exploration off the Israeli coast. They have invested millions in uncovering potential finds that will bring them immense revenues. They now seek to share as little as possible of these revenues with the Israeli public and have pulled out all stops in order to sandbag any increase in the royalty payment to the state.

While they get a sympathetic hearing from the government ministers who came to power on an economic platform that is very caring of big business interests, there is public pressure to reform the royalty schedule, or, at least, to increase taxes on production revenues.

The Finance Ministry’s Shishinsky Committee is not a front for the New Israel Fund. The public outcry against the system of revenue giveaway is not a left-right issue and embraces people of many different political stripes. Opposition to the present arrangement can rightfully be viewed from a nationalist position, the desire to strengthen the state’s fiscal standing.

A string of slogans

Of course, this position does not cohere with the Israeli equivalent of the famous American credo: what is good for Ford (or Tshuva’s Delek, or other companies controlled by blue-and-white magnates) is good for America (Israel).  That credo is the underlying message of the ad.

The ad suggests that “A change in royalties or taxes could induce instability and alienate foreign investors, which even now do not invest in Israel because of the Arab threat.” This reasoning, with its logical frailty is followed by the statement “Israel requires economic independence. Together we will stop the New Israel Fund.”

This stringing of slogans waves a flag that is shredded by capitalist salvos. The connection to the NIF is tenuous and entirely tangential, merely a diversion.  What the ad advances is the squalid notion that Israeli’s economic welfare will be served by a partnership of foreign corporate interests with domestic tycoons intent on keeping as much of the future gas revenues for themselves and out of the state’s coffers.

The group sponsoring the advertisement is the Forum on Behalf of the Land of Israel. Its website states that it is a student group based at Bar-Ilan University and other campuses. Its objective is “to advance the national interests of the Jewish people through the utilization [nitzul] of all academic fields and to also strengthen and forge the nationalist-Zionist voice in academia.”

A question that naturally follows is: where does a student group draw the considerable monetary resources to buy a full page ad in a daily newspaper?

The Environmental Dimension

Energy independence is an important national goal. The dependence of the industrial world on Middle East oil has had disastrous geopolitical consequences for Israel. No less dire has been the environmental degradation and climate change that has resulted from regional fossil fuel extraction.

As I have stated elsewhere on these pages, the kind of energy independence that Israel should pursue is properly found in the green technology that we have developed and exported the world-over – but have not yet applied sufficiently at home.

What we lack in fossil fuels could be a blessing, enabling us to reduce further damage to the environment by making better use of alternative sources– like solar power in the Negev and wind.

Developing a long-term energy strategy based on such resources,  the prudent husbanding of natural gas for domestic use – and the economic benefit of the commonweal – would serve the national interest – but not on the terms the oil barons and their cronies are seeking.

:: image via RonAlmog

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