President Barack Obama talks with former President Bill Clinton. Both tied to intervene on behalf of energy companies, but the White House disengaged from the issue towards the end of 2010 (Official White House Photo by Pete Souza)

Former Israeli Finance Minister Yuval Steinitz revealed that former U.S. President Bill Clinton tried to have the Sheshinski Committee for natural gas revenues dismantled. According to Steinitz, Clinton, along with several members of congress whose names weren’t revealed, tried to stop the Israeli government’s attempt to increase the tax burden on American corporations.

Yair Lapid replaced Mr. Steinitz at the Finance Ministry when the new Netanyahu government was formed.

Several years ago, the unexpected discovery of huge natural gas fields off Israeli shores led to a heated public debate – which continues to this day – regarding the relatively low tax burden on local energy companies and their international partners. The Sheshinski Committee, formed by the finance minister in 2010, was instructed to examine the contracts between the state and the energy companies and come up with a new tax policy. Its work was accompanied by an intense lobbying effort on behalf of the gas companies.

At the time, sources in the Infrastructure Ministry claimed that former U.S. President Bill Clinton was hired by Noble Energy to raise the issue with the Israeli government.

In an interview with Maariv earlier this month, Steinitz shed light on the former U.S. president’s role on behalf of the international energy corporation:

“The … scary moment was when pressure from the White House began. The energy companies hired American lobbyists, including former president Bill Clinton, who sent letters and led talks in order to dismantle the Sheshinsky Committee and stop the [new] tax bill. American Congress members asked me for clarifications. There was a sense of pressure, as if we are doing something wrong with regards to the commerce relations between the two states. I tried to explain that we are in the lowest rank in the world in terms of state profits from gas and oil discoveries, that we get nothing and that Israeli citizens have a moral right to benefit from resources just as much as private companies.

The pressure went on, Steinitz says, until late 2010, when the Obama administration decided to stop its involvement in the issue, paving the way for the legislation of a new tax law in 2011. Prime Minister Netanyahu, however, introduced some changes to the Sheshinski Committee’s recommendations in favor of the gas companies.

Israel’s minister of environmental protection, Gilad Erdan (Likud), has demanded that the government stop supplying power to the Gaza Strip in order to prevent power failure in Israeli cities this summer. In an official letter addressed to all government ministers (below), Erdan notes that 4.5 percent of Israel’s power supply is sold to Gaza.

Erdan writes (emphasis in the original):

The State of Israel is preparing itself for a power shortage during the summer of 2012. In order to continue the steady supply of power, we [the government] are presented with a decision which details measures for the prevention of a power shortage. Before the government discusses this option, I ask you to add a condition which states that prior to placing any limit on the power supply to Israeli citizens, power supply to all foreign elements will stop, most notably to the terror authority of Hamas in Gaza.

The collapse of the natural gas agreement between Egypt and Israel will probably lead to a power shortage in Israel – a temporary problem, which can be solved when Israel begins using its own huge natural gas resources in 2013. As a result, Israelis are likely to suffer a few hours of power shortage at the peak of this summer’s heat.

The 1.5 million Palestinians in Gaza already suffer 12 hours of blackout a day on average. Israel bombed the Gaza power plant in 2006, and didn’t allow in the necessary materials needed for the reconstruction since. As a result, even Israel’s own Supreme Court recognized in 2007 that the survival of the people in Gaza depends on the Israeli power supply. Israel has declared before the court that power supply to the Strip would not be stopped.

According to the non-profit organization Gisha, the Israeli supply accounts for 35 percent of the power Gazans use. Due to the fuel shortage in the Strip, using power generators is also limited, and critical medical supplies is lost every year due to lack of proper storage conditions.

Israel’s minister of environmental protection, a senior member of Prime Minister Benjamin Netanyahu’s government, is now asking to leave 1.5 million people without the little they need to survive, so that Israeli citizens can enjoy their air-conditioning undisturbed this August.

According to several news reports, Egypt has terminated a deal to supply Israel with natural gas. Egyptian sources say that the deal was canceled over a legal dispute, as well as Israel’s failure to pay for the gas over the past four months; Israeli government sources, meanwhile, insist they have paid all the money they owe. Several Israeli officials, including Kadima leader Shaul Mofaz and Finance Minister Yuval Steinitz, have expressed deep concern, with Mofaz calling the unilateral termination of the gas supply a “blatant violation of the peace treaty” that “requires an American response,” and Steinitz saying it was a dangerous precedent that threatens bilateral ties between Egypt and Israel.

The gas deal in fact has nothing to do with the Israel-Egypt peace treaty of 1979. It is a commercial deal that was negotiated between private Egyptian and Israeli business concerns in 2005; the deal was renegotiated in 2009, in the most opaque manner imaginable. No tenders were issued and the terms of the deal were not made public. The Egypt-Israel natural gas deal is resented by most Egyptians, who view it as a sleazy arrangement that allowed Hosni Mubarak, his sons and their cronies to pocket billions of dollars by selling one of Egypt’s most valuable natural resources at a price that is now well below market value – and to Israel, which is deeply unpopular in Egypt.

Egypt’s natural gas pipeline has been sabotaged 14 times since Hosni Mubarak was deposed in February 2011.

Egyptian economist Mohamed El Dahshan does an impressive job of armchair investigative journalism in this blog post, in which he demonstrates the extent to which the natural gas deal was, as he puts it, “a barely concealed cesspool of clientelism, personal relationships and private interests, breaches of government procedure, of transparency rules, and of corporate governance.”

The name Hussein Salem appears several times in El Dahshan’s investigative piece about the gas deal. Salem, 77, is a wealthy businessman who was close to Hosni Mubarak; he was also one of the main Egyptian players in the negotiation of the gas deal with Israel. A few days before Mubarak was forced to resign, Salem fled Egypt for Spain. A month later, he was arrested by the Spanish authorities, who froze assets that included $47 million in cash – this does not include his real estate assets, and this is only the money he kept in Spain. Bloomberg reports that Salem’s son has about $4 billion in hidden assets, according to an Egyptian judicial committee. Salem was held in custody for 11 months, pending a court decision regarding Egypt’s request for extradition. Last month Spain’s National Court ruled that Salem was to be extradited. He has already been tried and convicted in absentia on corruption charges, and sentenced to 15 years in prison. He is believed to have siphoned off $714 million in public money.

Israel currently relies on Egypt for about 40 percent of its natural gas needs. But this situation was set to change, whether or not Egypt terminated its supply of gas. In December 2010, the Israeli government announced the discovery of a huge natural gas field off the Mediterranean coast, named Leviathan; Infrastructure Minister Uzi Landau (Yisrael Beiteinu) called it “the most important energy news since the founding of the state [of Israel].”  The field is so big that Israel is now poised to become an exporter of natural gas within about four years. The biggest financial beneficiary of this discovery will be private interests – specifically Yitzhak Tshuva, an immensely rich Israeli businessman who is a controlling shareholder in Delek Group, which has a 22.67 percent drilling interest in the oil field. Tshuva’s international real estate investments include New York’s Plaza Hotel. According to the Israeli financial newspaper Globes, Tshuva and several other companies are currently negotiating a $4 billion deal to supply natural gas to power plants and other companies. Drilling, which commenced in January 2012, is expected to yield 600 million barrels of oil.

Meanwhile, the government-appointed Sheshinski Committee recently recommended a very substantial tax increase on profits from offshore drilling, from 30 percent to between 52 and 60 percent. This, naturally, upset Tshuva and the other investors in the Leviathan natural gas field. No wonder Yuval Steinitz, the finance minister who supported the Sheshinski Committee and approved of its recommendations, is rather concerned at Egypt terminating its supply of natural gas to Israel – at a price that is below market value.

It is convenient for Israeli government officials to respond to Egypt’s termination of the natural gas supply by bringing up the peace treaty and making dark comments about harm to bilateral relations. This sort of thing is easy to sell to the Israeli public, with its fears of the post-Mubarak Islamist parliament and its anti-Israel rhetoric. But Yuval Steinitz and Shaul Mofaz know very well that the gas deal has nothing to do with the peace treaty. Finance Minister Steinitz is probably well aware, too, that without competition from Egypt, the Israeli companies that own the drilling rights to Leviathan have a lot more bargaining power.

Exploratory drilling off Israel’s northern coast this week has confirmed the existence of a major natural gas field — one of the world’s largest offshore gas finds of the past decade…

As I wrote in the past, this story has not garnered the attention it merits. The natural gas find could finance a huge improvement in public services, which have been seriously underfunded in recent years, with disastrous consequences. Alternatively, it could make the wealthiest people in Israel – already one of the Western world’s most unequal nations – even richer.

The Newspaper of Record describes how “the find has been accompanied by a heated debate over how much in taxes and royalties Israel will charge.” A “debate” indeed. In favor of a higher share for the state, you have every Israeli group advocating for social justice, plus the famous socialists from the IMF, the OECD, Israel’s Treasury Ministry and the governor of the Bank of Israel, Stanley Fischer. On the other side, you have, well, the natural gas tycoons themselves.

What the NYT does not report, is that these tycoons have recently been boosted by a nasty nationalist scare-mongering campaign. MK Ofir Akounis (Likud), chair of the Economics Committee, bizarrely implied [Heb] that the New Israel Fund (a non-profit that channels funds from abroad to a variety of Israeli social and human rights organizations) wants to increase the royalties, so that foreign investors would be driven away to Lebanon, thus strengthening Hizbullah. Others have pointed to Iran as the benefactor of the Bank of Israel’s largesse.

This should be a no-brainer. A public commission, headed by a respected economist, will soon recommend increasing the taxes on natural gas profits. Note, that the taxes will be levied on profits, not income, so there is no risk that gas production will become economically unviable, only less exorbitantly profitable. And it would only bring Israel in line with other Western countries, in terms of royalties and taxes on natural resources. Right now, it ranks at the very bottom.

With natural gas lobbyists using every dirty trick in the book, and appealing to Israelis’ worst instincts, you never know. Let’s hope 2011 is a year in which good sense and basic decency prevails, on this issue as well as others.

>Top of the news: Israel under attack! All-out war! Egyptians cross the channel! No, wait a second… what? That was the 1973 Yom Kippur war, which is now back in the headlines. A declassified protocol reveals that the Israeli leadership was overwhelmed, and that the security minister at the time, Moshe Dayan, was panicking. Those who have learned the history will not be surprised, but three of Israel’s four dailies find it shocking, even 37 years later. And as to the loss of trust in leadership [Heb]: it has left Israelis ever more passive, rather than vigilant.

>Former head of Israel’s central command, Yair Nave, has been redrafted into the military, to serve as Deputy Chief of Staff. News outlets highlight three facts about him: he’s religious; he executed Ariel Sharon’s disengagement plan in the West Bank; and settlers were very angry at him for the extremely violent eviction of nine illegal homes in the illegal outpost of Amona, built on private Palestinian land. A religious soldier that follows orders… well, I guess that is interesting.

Haaretz front page, 5 Oct 2010

>The chief scientist of the ministry of education, notorious for denying evolution and global warming, was fired, after only ten months on the job.

>Only Ha’aretz puts on its front page a report on a meeting today of seven senior ministers, to discuss another extension of the settlement freeze. Netanyahu is still struggling to get the votes.

>Ha’aretz is also the sole newspaper that thinks a one-day warning strike [Heb] by Israel’s long-suffering municipalities, over budget cuts, is front page news.

The Sidelines: Playing with fire

>Defense Minister Barak calls the arsonists of a mosque in the Palestinian village of Beit Fajer “terrorists”. I’m sure they’ll be captured swiftly and serve long terms in prison. Oh, sorry, my bad, that’s for Palestinian terrorists. This is what happens to Jewish terrorists.

>IDF investigators have stopped looking into [Heb] a Palestinian minor’s complaint, alleging that soldiers physically, sexually and emotionally molested him, because the minor wants a lawyer to accompany him while he gives testimony.

>A Youtube video of a male Israeli soldier dancing near a blindfolded and handcuffed female Palestinian detainee, joins a long line of evidence about such practices in the IDF.

>A special panel has approved the vast majority of requests for compensation, filed by settlers claiming financial damage due to the 10-month freeze which ended last week.

>Settlers stick up for the Oslo agreement, when it’s convenient for them.

> The Palestinians are Israel’s second largest export market, after the US (Ma’ariv, Asakim).

>It’s final: the Supreme Court approved the deportation from Israel of Nobel Peace Prize laureate, Mairead Maguire.

>The UK and Spain will not participate in an OECD meeting in occupied East Jerusalem.

>An expert reminds [Heb] the education ministry that erasing discrimination and injustice from the schoolbooks does not remove it from reality itself.

>A Negev mosque will be demolished because it was built without a permit. The regional police commander advises locals: “If you need a prayer house, it must be built according to the law.” [Yedioth] To paraphrase Bob Dylan: to live inside the law, you must be dishonest.

>A riot occurred in an Israeli village, over the Ministry of Education’s decision to appoint a headmistress instead of the favored local candidate (coincidentally or not, a man: some reports indicate resistance to the headmistress’ “provocative dress”).

>The mayor of the Arab Israeli town of Araba will not allow local volunteers in the national service to work in his schools, because he considers this a gateway to military service (Ma’ariv).

>The mayor of a large Israeli Settlement makes racist remarks regarding Ethiopian Jews (Yedioth).

> In the city of Lod, some residents want less Ultra-Orthodox newcomers, and more of a “stronger” (meaning, richer) population (Ma’ariv).

>Childhood prostitution is not about money; it’s the result of sexual molestation (Yedioth, 24 hours).

>A Nobel Prize to the inventor of “test-tube babies” evokes much interest in Israel, where the technology is ubiquitous.

>20,000 teachers will not receive their paychecks because schools failed to meet licensing requirements, mainly regarding safety concerns. The unsafe schools will continue to operate, of course, just without paying the teachers.

>Trade unions want an 11% increase in public sector pay (Yedioth, Mamon).

>The justice ministry will draft a law restricting the pay of senior executive in the private sector.

>The Supreme Court questions [Heb] the Knesset’s decision to once again do a two-year, instead of a one-year, budget. Petitioners from the opposition party Kadima claim it will reduce parliamentary scrutiny of the government’s finances.

>Intel will invest another 10 billion $ in Israel in return for government subsidies.

>Railroad tracks will connect Tel Aviv and southern towns by 2013 (Yedioth, Mamon).

>A national-religious rabbi promotes “green” Judaism (Ma’ariv).

The Bottom Lines: The 400 billion $ question

>With all due respect to the Yom Kippur War, I still prefer to answer the 400 billion $ question: who will benefit from the natural gas deposits discovered recently near Israel’s shores? Will it be wealthy businessmen, or Israel’s people? Will Israel continue tapping the US for billions in foreign aid, while handing out twice as much or more in gifts to its wealthiest citizens? According to reports, a government commission will suggest levying windfall taxes, instead of increasing royalties. It would be impossible to assess the fairness of the proposal before details are published. And if it is fair, the gas lobby will surely do all in its power to dilute it.

Headlines:

>The top story in most outlets is the Israeli response to pressures to renew the settlement freeze, which lapsed last week. Ha’aretz and Yisrael Hayom [Heb] present Netanyahu’s position as uncompromising: he will only agree to limit construction. The two other dailies, on the other hand, claim that Netanyahu is still considering Obama’s offer of American security guarantees in exchange for sixty more days of freeze, and might discuss it with some ministers during the week. According to Ma’ariv, the sweetener will be continuation of construction that begun during the interim period (and settlers are indeed gearing up [Heb]). Yedioth presents another version: Netanyahu wants the Americans to improve their offer. They must also promise to never ever ask for another extension.

>Netanyahu seems hemmed in from left and right. Yedioth and Yisrael Hayom [Heb] count the votes and doubt he has enough support in the government to pass another freeze decision. From the left, Ma’ariv and Yedioth report threats from the Labour party to leave the coalition if talks with the Palestinians end. Opposition party Kadima is also vowing [Heb] to fight against any decision that would kill negotiations. But will there be no talks without a freeze? The Palestinians publicly insist that this is indeed a precondition (provoking the usual vehement condemnation from Yisrael Hayom), but may climb down from the ladder if they have no choice.

>Ha’aretz scoops all other outlets with actual reporting about the chances for successful negotiations, if they are indeed renewed. The indications are depressing, if unsurprising: during his three meetings with Palestinian President Abbas, Netanyahu refused to present substantive positions on any issue, except for security arrangements. Ma’ariv provides another (inadvertent) indication: a sentimental front page story about the IDF’s intention to confiscate private Palestinian land in order to “launder” the illegally constructed home of a fallen Israeli war hero. The story does not mention negotiations with Palestinians : Israel has committed, in the past, to stop confiscations of private Palestinian land. Nor does it mention that this would be a blatant violation of international law, for that matter.

>Another scoop for Ha’aretz: Israel is working through diplomatic channels to warn Syria about the potentially destabilizing effect of Iranian President Ahmedinijad’s planned visit to Lebanon. The visit will include a tour of the tense Lebanese-Israeli border.

>The deportation of 400 children of illegal immigrants could begin today. There will be no focused enforcement effort on this specific issue, but the children are far from safe.

The Sidelines:

>Ma’ariv reports the Israeli Police is ramping up efforts to recruit settlers to its ranks. Gershom Gorenberng broke the story some time ago, with an excellent analysis.

>Ha’aretz reports about claims by the Washington Times that the “Pro-Israel, Pro-Peace” Lobby, “J Street”, tried to arrange meeting on Capitol Hill for Richard Goldstone.

>The South African Jewish judge headed a UN commission of inquiry into the Gaza War which published a controversial report, claiming that Israel may have committed war crimes.

>Ma’ariv publishes four centerfold pictures, with accompanying texts, commemorating the Second Intifada. Israeli sacrifice, pain and patriotism are highlighted. The Palestinians are hardly even mentioned.

>Kindergarten teachers strike for two hours, demanding an improvement to their awful pay; municipalities will strike on Tuesday in protest of budget cuts.

>Tel Aviv rents out its philharmonic hall [HEB] to a company promoting a lucrative real estate project, sparking protest about the lack of affordable housing in the city.

>Israel has one of the world’s highest rates of breast cancer.

>All outlets report on the dismissal of CNN Anchor Rick Sanchez over anti-Semitic comments, and Rahm Emmanuel’s “emotional” departure from the White House.

>Iran arrested “spies”, accusing them of damaging its nuclear program by distributing a computer worm.

>Nobel Peace Prize laureate Mayrid McGuire will appear today before the Supreme Court, appealing a lower court’s decision to deport her from Israel.

>The former head of the chamber of commerce wants a more progressive tax code. [Heb]

The Bottom Lines:

>Yisrael Hayom is the only daily that has a news piece [Heb] covering events memorializing 13 Israeli Arabs killed by Israeli Police ten years ago. Yedioth posts a picture with a short accompanying text. Ha’aretz publishes an interview with the Police officer who commanded that “operation”.

>Ma’ariv skips the story altogether, but that’s understandable: they needed the space to write about Bill Clinton’s diet. This is one of Israel’s gaping wounds, and just as in the weekend, only the websites give it decent coverage.

Here’s the most under-reported story in Israeli media today: natural gas.

>Huge deposits, worth close to (US) $400 billion, have been discovered near Israel’s shores. Royalties could transform Israel’s economy and society, and bring in five times what Israel gets in US aid, every year. Unfortunately, the Gas tycoons, after vigorous years of lobbying, have managed to preserve an antiquated law that grants the state paltry royalties of 12.5%. The state is trying to renegotiate a fairer deal, but the tycoons have found a strange ally: the loony right. Their newest star, MK Ofir Akounis (Likud), chair of the Economics Committee, bizarrely implies [Heb] that the New Israel Fund (a non-profit that channels funds from abroad to a variety of Israeli social and human rights organizations) wants to increase the royalties, so that foreign investors would be driven away to Lebanon, thus strengthening Hizbullah. You’ve got to give him points for creative thinking.

But now, what until recently was solely an economic discussion has suddenly turned political. Left vs. Right. Zionists against “anti-Zionist traitors”. “Israeli gas vs. Arab gas”.

This is a complicated story, but one that should be told, if only due to the huge amounts of money involved and its possible ramifications. According to the financial daily Calcalist, the argument is over approximately 500 million dollars a year – for the next 20-40 years, depending on exactly how much gas there is. That’s over 1% of Israel’s tax revenue in 2009. Sums like this could not only change the standard of living in Israel itself, but also its geopolitical and economic standings in the area.

So what’s the story, and how did politics suddenly get involved? First, let’s look at the stars of this gas opera:

* The three little reservoirs: Yam Thetys, about 30 km off the shores of Ashdod, held 32 BCM (billion cubic meters) of natural gas before it started to pump gas to Israel. This reservoir is controlled by Noble Energy and Yitzhak Tshuva’s Delek Group (more on them later…), and after signing an agreement in 2002 with the Israeli Electric Company, the gas started flowing in 2004. As of today, there are about 20 BCM left in the reservoir and it’s annual revenue has reached  about 520 million dollars a year.

Tamar and Dalit: Off the coast of Haifa, Tamar and Dalit are two huge reservoirs with a combined 252 BCM, supposedly to be available by 2012. Annual revenues are expected to hover around 2 billion dollars. Noble and Tshuva control this one, too.

The Tamar Reservoir, off the coast of Haifa

Leviathan: An appropriate name for this humongous reservoir. The latest reports say there’s at least a 50% chance of finding gas in Leviathan, which is a reservoir that basically surrounds Tamar and Dalit. In the gas industry, 50% are considered very good numbers. If the estimates are correct, Leviathan could have a whopping 453 BCM, which could produce annual revenues of 2.3 billion dollars. And yes, Noble and Tshuva control this whale of a reservoir, too.

* 12.5%: The rate of annual royalties that must be paid by the drillers of Israeli gas reservoirs to the State of Israel, according to a law written in… 1952. Yup. This law hasn’t been updated for decades. And why would it have? Israelis have always considered it a given that they’re screwed. The typical kvetching went along the lines of: “Everybody (all our “enemies”) around us has have gas and oil, except for us poor Jews”.

Compared to other countries, Israel has one of the lowest royalty rates around. And when it comes to Noble Energy drillings, Israeli royalties are the lowest it’s paying compared to its activities in the U.S., Ecuador, China, the Northern Sea and Africa.

* The entrepeneurs: Noble Energy is one of the biggest companies in the U.S. and drills all over the world. Based in Houston, Texas, it had a second quarter revenue of 750 million dollars in 2010. Noble holds 47.1% in Yam Thetys, 36% inTamar and Dalit, and 39.6% in Leviathan.

Yitzhak Tshuva is one of Israel’s richest. He owns the Delek Group, which is involved in energy and infrastructure, real estate, insurance and financial services and the automotive sectors. He also controls an energy company called Avner. Delek and Avner hold 53% of Yam Thetys, 31% of Tamar, and 45% of Leviathan.

Yitzhak Tshuva. Has holdings in all three major reservoirs (Motti Kimche for Haaretz)

* Yuval Steinitz. In early April, Israel’s Finance Minister says he thinks it might be time to take a look at Israel’s royalty policy of 12.5%, which is indeed very low. He appoints Professor Eitan Shashinsky to head a committee to review the said policy.

Finance Minister Yuval Steinitz

* The Shashinsky Committee immediately comes under pressure from the entrepeneurs, from Israeli officials – even U.S. officials have reportedly complained to Israeli counterparts about the possibility of hurting Noble’s income –  and from anyone who has anything to say about it. Reports surface that the committee is considering hiking the royalties up to 24%. That difference, of 11.5%, was calulated by Calcalist to be 500 million dollars a year – the basis for the argument.

So, just until a few months ago everything seems to be doing well. But then comes the announcement in early June by Noble Energy that Leviathan is way bigger than they thought, and that the chances of pumping gas from it are fairly high. Here’s where things start to get messy.

A debate is held for weeks over the issue of raising the royalties or not in all the financial media. The reasons ranging between the need for Israel to act for the benefit of its citizens to the need to be “fair” with tycoons who went into a deal on certain terms. All arguments are legitimate and well founded. Until, of course, the politics start to stink everything up.

* New Israel Fund – On the 21st of July the NIF, along with other NGO’s send a letter to the committee recommending a hike in royalties. The NIF does not do this for any known political reason, but as we all know, lately anything the NIF does attracts a lot of attention.

* The Forum for the Land of Israel – Upon hearing of the NIF’s involvment, the Forum smells blood and goes on a nationwide campaign to smear the NIF’s involvment, with ads that say: “Warning: The NIF is fighting for Arab gas”. The forum also points out that Shashinsky’s wife is a member of the NIF, thus posing a conflict of interests for the chairman.

The forum’s campaign cost 2 million NIS (533,000 USD), and was run by EDK – a media consulting firm headed by Moshe Klugehft, who also happened to spearhead the ugly Im Tirzu campaign against the NIF and its chairman Naomi Chazan. Klugheft is also MK Ronit Tirosh’s media advisor and when MK’s needed someone to write a song for them to sing in praise of the commandos who boarded the Mavi Marmara, guess who wrote the lyrics? You got it, Klugheft.

Yossi Meiman – So now you must be asking ‘Wait, what did they mean by ‘Arab gas’?” Well, the forum claims that if royalties are raised, the gas from the sole competitor to Israeli suppliers will be cheaper. And that sole competitor, who will apparently gain from this hike, is Yossi Meiman. Another Israeli tycoon. Who’s also into gas. And with his companies Merhav and Ampel holds 21% of EMG – the Egyptian gas company that supplies to Israel.

Yossi Meiman. Holdings in EMG (Nir Landau for Walla!)

As pressures mount on the committee, Steinitz holds a special press conference just yesterday in defense of Shashinsky and the other members.

“The personal smears against Prof. Eytan Sheshinski, the harassment, the demonstrations in front of his house, the attempts to meddle with him and his family … all this is unacceptable,” Steinitz said.

“Anyone who wishes to express his opinion can do so, and those who are involved in the oil and gas sector, if they have the money, are entitled to hire half the publicists in the country and pay them hundreds of thousands of dollars for their opinion,” Steinitz said.

“It’s legitimate, and it’s legitimate to publish the opinion across entire pages in the press, but it is inconceivable that they would try to personally harass and attack the committee and its members. All the more so the committee chairman – a well-known professor who took on the task as a volunteer and agreed to my request to chair it.”

So there you have it folks. That’s what this discussion has turned into: If you’re a lefty, you’re for hiking the royalties, weakening Israel and strengthening the Arabs. If you’re a righty, well – it’s pretty obvious.

What’s funny is, that here is where Yuval Steinitz and myself don’t fit into the mold. Steinitz, a known hawk in the Likud – wants to raise royalties. And me? Well, you all know I’m a lefty. But I’ll bet you didn’t know I’m for keeping the royalties as they are. At least for the current drillings. For all I care, they can raise them to 50% – as long as it’s not retroactively.

So, this is probably the only case I’ll ever find myself at odds with the NIF. Certainly the only case I’ll find myself on the same side of a fascist movement like the Forum for the Land of Israel.

See, the things is – Noble and Tshuva put their money where their mouth is. They invested – and so did the people who bought their stock – in a deal with certain numbers and certain business plans. They took the chance and drilled, not knowing what was going to come out, if anything. They gambled. And they won a jackpot.

In a way, these entrepeneurs shook hands with the State of Israel. And now, Israel is basically saying that it was crossing its fingers behind its back the whole time. In business, you just don’t do that.

In fact, Israel should be thankful that Noble and Tshuva took the chance, since the state will be getting millions on taxing the revenues and from the royalties. Trying to double the royalties seems nothing more than greedy.

So, are the royalties low? Yes.

Should they be raised retroactively? No.

Why? The answer couldn’t be any more simple:

It’s just not fair.