Israel’s High Court of Justice deems landmark gas deal unconstitutional

Gas drilling off the coast of Israel. Credit: via

( The Israeli High Court of Justice ruled that a landmark natural gas agreement is unconstitutional, dealing a major blow to Prime Minister Benjamin Netanyahu and energy companies.

Israel had reached an agreement between Israeli and American companies such as Houston-based Noble Energy and Israel's Delek Group in order to pump recently discovered offshore natural gas reserves, arguing that the deal would help the Jewish state attain energy independence and significant revenue.

But the High Court dismissed a clause in the agreement that would keep Israel from making any changes to the deal's agreed-upon regulations for the next decade, calling the clause unconstitutional because it restricts the power of the Israeli Knesset legislature. The court’s ruling gives the Knesset one year to amend the plan, or the deal will be cancelled.

"The High Court of Justice decision severely threatens the development of the gas reserves of the State of Israel. Israel is seen as a state with excessive judicial interference in which it is difficult to do business. Certainly nobody has any reason to celebrate that the gas is liable to remain in the depths of the sea and that hundreds of billions of shekels will not reach the citizens of Israel. We will seek other ways to overcome the severe damage that this curious decision has caused the Israeli economy,” Netanyahu said about the ruling.

Member of Knesset Shelly Yachimovich (Zionist Union), a leading opponent of the deal, called the ruling "historic and dramatic,” saying that “the High Court justices chose to put the brakes on the unchecked recklessness that was benefiting the gas tycoons.”

David Stover, chairman of Noble Energy, called the ruling "disappointing,” the Associated Press reportedA representative of the Delek Group called on the Israeli government to rework the agreement quickly, saying, “We don't intent to put things on hold.” 

Posted on March 28, 2016 .