 Wow. Great turnout. Great turnout. Well, good morning, everyone. Let's get started. I am Carl Indefirth, holder of the Wadwani Chair in U.S.-India Policy Studies here at CSIS. I'm very pleased to welcome all of you for this session on expanding U.S. trade markets exploring LNG exports. Clearly, there's a lot of interest in this topic as evidenced by this great turnout. So thank you all for being here nice, bright and early for this discussion. Joining me here on the platform is our featured speaker, the Honorable Charles Boostany, the U.S. Representative from Louisiana's Third Congressional District. Welcome, Congressman. Thank you. It's great to be with you. Please, let's start off underneath to sort of get ourselves pumped up. Entirely unnecessary. Now, I should say to the Congressman, welcome back because he was just here last month for another CSIS event on U.S.-China relations. So thank you very much for a return engagement so quickly. Always happy to come back. Don't say that. You'll be every month for one event or another where you can contribute. Also joining us on the platform is Sarah Landislaw. Sarah is the co-director and senior fellow for the CSIS Energy and National Security Program. So Sarah, I'm delighted to be doing this with you. In fact, some of you may be wondering why the U.S.-India chair is cosponsoring today's event with our Energy Program. The answer to that is very simple. To use the old expression, India has a very big dog in this fight. You might even say that India's future depends on it, including its ability to put hundreds of millions of people pull hundreds of millions of people out of poverty in India and to realize its ambitions to be a 21st century economic powerhouse. Energy is the key. Now, I trust you picked up your way in. A copy of an April op-ed in the Wall Street Journal that India's ambassador to Washington, N.P.A., wrote. It's entitled, India is ready for U.S. natural gas. She writes in that piece that India is now the world's fifth largest energy consumer. Today it imports 75% of its energy, especially oil and petroleum products, and expects to import 90% over the next decade. As a result, she says India is working hard to diversify its energy supplies. Still, the demand for energy keeps growing in India at a 5-6% annual rate. All of this adds up according to Ambassador Rao to one very basic conclusion. Namely, that India must secure more energy supplies to further its social and economic development. And how might India do this? Happily, she says. This is her statement. Happily, the U.S. has experienced a boom in the production of natural gas. So happily, that comment also provides us a perfect segue to hear the congressman's remarks this morning. But first, a very brief introduction. The congressman's bio was available, also available as you came in. So I will not repeat it here, except to say that he was first elected to congress in 2004. And he presently sits as a senior member of the Powerful House Ways and Means Committee and on its subcommittee on trade. During his years in congress, the congressman has become a recognized leader on international trade and energy issues and health care reform. Trade and energy, of course, are a natural fit for the congressman since much of America's energy flows through South Louisiana. Health care is also a very natural fit since he is an MD with more than 30 years of clinical experience. So we now look forward, drawing on both that MD and his other experiences to hearing his prescriptions on U.S. trade and energy policy. And we'll use that prescription thing. So congressman, the podium is yours. When I first ran for congress, I outlined a platform called a prescription for prosperity. Sort of play on the doctor thing. Just to start off, my district in Louisiana is a coastal district. It runs from the Texas border to the central coastal area of Louisiana, about an hour south of New Orleans. It represents most of the coast of Louisiana. It's an energy working coast. And we're also the epicenter of what's happening in many respects with the natural gas world because the Henry Hub, which is the pricing point, is in my district. I have five out of the 18 or 19 LNG facilities, export facilities that are in the works located in my congressional district. And many of the companies that are engaged throughout the U.S. exploiting shale formations for oil and gas are in my district. In fact, when I fly back and forth between Louisiana and Washington, typically many on the plane from Houston to Lafayette, which is my hometown, are working in the energy sector. Some coming in from international work, others working around the country. And of course, all of the tremendous changes that have occurred because of new technology with hydraulic fracturing and horizontal drilling. I can tell you, having been to some of the manufacturing facilities that create this technology, it is truly space age. It's an amazing thing to see. It also makes one realize that manufacturing is still very much alive and well in the United States. I've seen also that back in 2005 we had the creation or the construction of new LNG import facilities because we thought we were going to depend more and more on LNG imports. And I was in fact at the Sabine Pass facility in 2005 for its grand opening with then Secretary Bodman, Secretary of Energy. And it was anticipated that the U.S. would be importing more and more liquefied natural gas. That has really changed immensely just in the last few years. And energy markets have really changed immensely. So as I view this there's a convergence of a number of events that I think are important to put this in perspective. One clearly is the major changes we're seeing in energy markets. Not only energy markets in the U.S. but energy markets globally. Certainly North America, the U.S. and Canada have emerged as major producers. The shale gas and now oil opportunities have created export potential for the United States. Whether it's liquefied natural gas, refined product and potentially even oil exports which will be an interesting development depending on how this plays out. We're seeing a lot of uncertainty in the Middle East traditional supply of energy. This is changing daily in front of us. I don't think any of us really fully know where this is going to end up. Thirdly, the United States has intensified its engagement in Asia. A welcome opportunity because of what's happening in Asia with growth trade and so forth. And of course the big initiative is a Trans-Pacific Partnership. But with growth rising demand for energy in Asia we're seeing that demand having major impacts on energy markets. So does this create resource nationalism and security problems? Or is there a way to solve this going forward? And I would submit that if you look at all of these developments together North America could emerge as one of the great one of the great opportunities for exports into Asia to help fill that rising demand provided we get policy correct here in the U.S. and there are a lot of challenges there. So how does this all fit in with India? And India is not in the TPP so is India going to be on the periphery? We're talking about the second largest country in the world. A burgeoning democracy, a powerhouse potentially with regard to international trade and I would submit that our trade relationship India trade relationship is underperforming so that this creates a huge opportunity going forward and this is where I think liquefied natural gas exports from the United States to India could play a major role. We saw an opening in the energy sector in the Bush administration with the civil nuclear agreement so far as not reached the potential that many of us thought and hoped for but it was a great opening a great opening with regard to moving forward our relationship, our bilateral relationship but I do think that the export of liquefied natural gas opens up many new opportunities so that we could improve this trade relationship break down some of the trade barriers the U.S. could help provide for the growing demand and I think we'll see tremendous benefit from all of that. So what why is this important? Well, first of all, for the United States the natural gas revolution LNG exports create jobs I'm seeing it in my congressional district a lot of investment ongoing if you total up all the investment in one small city in Louisiana on the coast, Lake Charles, Louisiana it totals up to about $50 billion in investment in the natural gas sector some of it's in the refining sector some of it's with the construction and hopeful potential exports of LNG so we'll see petrochemical exports, now we're seeing this for the first time in quite some time since the 40s so jobs but it helps with India helps India meet a rising demand we know there are some 300 million people in India who don't have electricity or have spotty electricity India's struggling with this vulnerability huge vulnerability that poses barriers to its growth and so I do think that starting this process of LNG exports is critical I also think it's a time limited opportunity for US companies as other shale formations come online as some of the geological limitations, infrastructure limitations perhaps in Australia other places come online this creates this is an opportunity that's time limited for US companies this will certainly help the US trade in balance that we're seeing if we can export energy products we will see market improvement because the biggest factor in our trade imbalance is with energy and so we're seeing that shift and more broadly exports by creating this new opportunity will help I think stimulate further natural gas exploration production in the United States at a time when the price is very low and we're seeing some of the production efforts shifting back to oil because of the price situation but the United States has this tremendous opportunity because I mentioned it's time limited we're the only country right now where we're seeing this delinkage of gas prices from the price of oil with this pricing at Henry Hub Canada's not even enjoying that type of advantage but Canada's rushing forward to build pipelines to get gas to the Pacific Coast so what's going to happen is I think if we can see integration of energy markets in North America closely integrating the US and Canadian markets to meet this demand in Asia this meets what I would call a US vision of energy security open markets rather than pipeline diplomacy and resource nationalism the types of things that we're concerned about an alternative view of energy security so LNG exports let me close out by saying for a more intensified integrated US-India relationship it will help I believe in the broader trade arena as we go forward it will help strengthen the security relationship between our two countries in an area where security concerns are growing where economic growth is occurring much of the world's trade is occurring and so I'm going to push for it and with that context I'll be happy to answer any questions going forward great context sir do you want to comment make some remarks and then maybe pose a first opening question sure sounds like a great plan I just wanted to say thank you very much Ambassador Inderforth for having me here today with Congressman Bustani it's a real pleasure to be able to do this event together as I was telling both the ambassador and congressman before our session the energy program here at CSIS has been focusing a great deal on this issue because it is one that people are so intensely interested in not only from an Indian perspective but also from the EU or Japan or any other country out there that's fundamentally interested in what having the United States as a net exporter of any energy product over a long time frame means for them in a strategic sense and how that will affect markets and so one of the things I thought I would do is understanding and thinking everything that you've said is so reasonable about and found about the reasons why LNG exports make a lot of sense is ask the really obvious question about why is it so hard then why has it been so hard up into this point why are people surprised at the level of delay that we've seen in the US permitting process for these projects and maybe just throw out a few ideas and get your ideas about whether or not those are kind of on target I think first and foremost the thing that I usually tell people when visiting from abroad is this is a fundamental shift for the United States that took even the largest energy companies in the world by surprise it's a function of the regulatory environment commercial framework environment that we have here in the United States and it's one of these wonderful things where the combination of technologies and resources we knew were always there surprised everybody and so there was a natural sort of skepticism looking at the unconventional gas revolution and saying is it real is it sustainable and when we started to find tidal oil resources and funny things started to happen in terms of where people were moving rigs people got even more curious about whether or not this is here to stay we still get this question today and I think that's part of the concern over whether we'd be exporting large amounts of LNG is gee are we going to be able to continue to produce at this rate or is it somehow not a permanent trend the second it was just sort of a change in psychology you know and we have for the last 40 years been a country whose energy policy is predicated on the idea that we are a growing energy consumer and we are resource constrained even though we're a resource abundant country and always have been right and so this idea that that wasn't going to be the situation going forward requires people to sort of take that on board and say well what does that mean for us and when you couple that with the third element which is the pressure that was coming from lots of places around the world saying what's the US going to do with this resource to be strategic about it will there be an industrial policy will they you know be more resource nationalistic keep it at home try and create economic competitive advantage will they direct exports to countries with whom they have a security relationship or some sort of strategic objective I think it takes people a while to sort of think through some of those questions finally there was some legitimate sort of environmental concern right I mean people were looking at unconventional resource development and still are and saying gee how do we do this at scale at a level we've never done before and give the public confidence that you know that that it can be done safely and there's you know reams of people out there in the commercial and private in public sector trying to grapple with that question but fundamentally lots of folks wondering whether or not we were going to find our way through that you know can this be done safely question and then finally you talked about sort of the dynamism in global energy market these have not been an uneventful 15 years we've just gone through right I mean there's been fundamental shifts in the global energy landscape and it and it requires a lot of people to look at those shifts and say how would the U.S. exporting LNG shape global gas markets right what does that do to sort of the price differentiation in different places and even between different fuels and things like that so required a bit of study all of this is not to be defensive of the amount of time that we've taken to do it just to recognize that this is a shift in and who and what we've been in energy terms and one of the reasons why I was really heartened to hear your remarks in particular is you know fundamentally the United States has been one of those countries that's been out there for the last several decades that has argued that integrated trade and global energy markets and diversity in those markets not only in terms of suppliers but also in terms of fuels is the core of what makes energy security and for us to have a significant departure from that energy policy mentality I think would be a real sort of departure that countries around the world would find difficult so I guess my opening question would be sort of given that sort of cathartic public policy process we've all been going through over the last couple of years how do you see this process moving forward do you think there's a common understanding about the strategic good that you see for LNG exports for sort of a broader energy and international energy policy sense well I think there's a we need to really embark on an education process members of congress and others the American public in general if you think about where we were and where we are now just in a matter of decades we've gone from lines at the gasoline pump to a point in time where we thought we were going to be increasing our imports of natural gas we were certainly heavily dependent on imports of oil to a point now where we're looking to make that shift we can now export some natural gas we have a large abundance of natural gas and this looks like it's going to play out over time we're exporting you know refined products and we potentially could export oil depending on what happens with all this but we have to bring the public along on this and there are going to be some challenges because there's a mindset in the U.S. that we've been dependent on energy and it's about American security but I firmly believe that our view of energy security should be diversification in sources of fuel diversification in the types of fuels and sources of energy as well that's in the American view of energy security and I think we can play that role out if we get the policies correct there are some who want to take this and use it purely in a traditional national security type of arrangement in other words export gas only to NATO countries or NATO plus Japan and I don't think that's the right approach I think that sort of certainly violates the spirit of our World Trade Organization obligations but at the same time I think it runs counter to our view of what energy security should really be and I think we have to have that discussion based on the supply that we have and our position in the world what are the implications of an open energy market integrated energy markets and how does that dovetail with trade it struck me that energy in the 50's and 60's has sort of evolved separately as a whether it's oil or gas and there are different markets it's evolved separately from the framework of trade and we need to see more convergence in that I think in the long run so those are just some of my initial views on that question could I just follow up with something that Sarah raised in terms of the timing for when this could actually begin I was in Japan in May when DOE announced its latest made its latest announcement regarding non-FTA countries and the possibility of exporting the Japanese were very excited and I was happened to be there with Japan, India, US trilateral discussions the Indians were as excited about it as the Japanese were saying the green light is flashing now in terms of how long it will take to get from where we are today with the green light flashing to when we will actually be able to do this all of the licensing all of the infrastructure issues when can this actually take place if we're going to do it well the one company has received the Department of Energy license and has gone through the process and anticipated I think sometime in early 2015 that they could actually export the first amount of gas to countries or entities that have locked in 20-year contracts that company does have a 20-year contract with Gale I can't recall the volume of gas right off hand that they're going to export to Gale but that's in place and a second facility has just received the green light just over the Louisiana-Texas border in Texas and we're waiting to see what's going to happen with the Department of Energy in fact I know I've written letters to the department trying to get a sense of their timeline what's holding all this up just yesterday passed an energy and water appropriations bill and there's language in the bill that asks the Department of Energy to show us why they're delaying this the expedited, lay out the process so there's more certainty going forward but regulatory uncertainty in all of this and whether it's on the permitting side or regulations dealing with hydraulic fracturing and horizontal drilling basically pose an unknown for how quickly this will develop and so working through those regulatory uncertainties is going to be critical a couple of key factors right now regulation is done at the state level and some states have embraced this others have basically resisted it some are cautiously looking at it the uncertainty about permitting is another consideration and so we're hopeful that the newly seated Energy Secretary will move forward with this and let's see what happens I think realistically out of the 18 or 19 or so facilities that are companies that are looking to do this realistically five, maybe six of them will get the permits so we're still talking about a relatively limited amount of gas in the grand scheme of American natural gas production a small amount being exported but I do think that it's going to have a very disproportionate impact on gas markets and on the geopolitics of this and so I think it's critically important for the U.S. in terms of its trade policy energy policy, its view of energy security interesting Secretary Kerry was just in India on June 24th for his first engagement with the Indian government in what's called the U.S.-India Strategic Dialogue he took a number of key administration officials with him including the new energy secretary and Stephen Chu had been in India just about three months earlier so the Indians are very much engaged on trying to work through these things including the strategic implications of what we'll be doing together so well let's open this up we've got a great audience it is a diversified we're talking about diversity here this is a diversified audience we've got think tanks we've got industry representatives we have members of the press that and I would like to ask you I'll try to sort of find people at different parts of the room I'd like you to identify yourself and your affiliation and we will then be able to engage in this for about 45 minutes so hope we've got plenty of questions and we're going to shoot right to the back this gentleman standing up here who's probably near a microphone microphone will come over and we'll get the ball rolling thanks for your fantastic remarks Alexander Sullivan from the Center for New American Security one thing that I've heard in regards to the LNG export facilities especially those that were originally created for importing LNG and quite obviously are not going to be used for that purpose in any substantial way in the future is that they can be retooled to export quite easily that if we wait five years let's say to get this policy right to start issuing permits and licenses expeditiously that a lot of these facilities are going to have to shut down due to under use more or less and that it would be quite difficult technically speaking to restart them or to invest the capital expenditure to build new ones or what have you are you hearing any of this from those in your constituency who are engaged in this business well this is a concern many of these were built at a time when we thought we were going to have to import gas and so there's new construction that has to be put gone through to refit them to export first you have the DOE license and then you have FERC licensure which is expensive it's an expensive proposition for millions of dollars and then to build just to retrofit you are talking about two to five billion dollars in investment the construction time so all those things are factors and we are seeing such a rapid shift in energy markets today that this is time limited I believe for the US how much time is it five years, is it a little longer is it less remains to be seen but we do know obviously in the Middle East you have Qatar which is a very large gas exporter there's Iranian gas Russians these are but this is all within a traditional model for gas markets but I do think we are going to see others coming online I mean there was a look at Poland recently I didn't pan out I know Brazil has some unconventional gas reserves they are very interested in trying to look at that obviously Australia is a big player but they are going to have to build out infrastructure in all of those cases Canada as well to get gas out for export to the Pacific so there is a race in effect how long does the pricing differential with this delinkage at the Henry Hub last is there going to be a convergence globally right now we have basically three different price regimes there is an Asian price regime, European and then Henry Hub pricing how long does all that last there are a number of moving parts my position is let's expedite the permitting so these facilities can be refitted or constructed and let's move on with it because one of the benefits we reduce our trade deficit we create US jobs in fact one of the bright spots in this sluggish US economy has been in the energy sector where we have seen employment growing as a result of this I can tell you I was very fearful when the moratorium in the Gulf of Mexico was imposed after the deep water horizon event I thought my district was going to and my state was going to see a serious rise in unemployment and the only reason it did not happen was that we saw a shift that happened to be fortuitous we saw this shift into unconventional oil and gas and a lot of these companies shifted so the point I'm making I guess in general terms this is time limited we have to get our policy in place so we can move forward because it's a win-win for the US and for those partners around the world that partner with us such as India yeah I guess there's a hierarchy of projects that are here in the US right I mean commercial speculation is that projects that have to retool which is more expensive and complicated than retooling sounds have a good sort of shot at being able to sort of get through the regulatory and sort of commercial hurdles that you need to be able to be an export project more than sort of say building a new sort of green field facility somewhere or building a facility with these new production centers here in the US but that time limitation really comes from the capacity that's coming online around the world which is already sort of in its own investment cycle I think one of the big questions here is how do you construct a permitting process that allows the commercial entities in the market to decide which of those projects have options about what they're going to do and what they're going to whether a very very dynamic global gas trade situation and versus sort of hold that up and try and presuppose what those decisions for those companies are going to be and so I think that that sort of no one can assume what the commercial decisions of any one of those companies or facilities is going to be they have options they're part of companies that have baskets of suites of projects and decisions based on that but I think that trying to sort of divorce the regulatory process from those kinds of commercial decisions is probably in our best interest Questions let's stay in the back here this gentleman here please and there's the mic I'm Eric Swenson I'm a partner with Fulbright and Jaworski we do a lot of the work for projects that are seeking or have the export authorizations and also customers of the terminals the congressman's comment that he thought only five or six projects would get permitted I just was wondering if we could get some clarification on that whether he feels it's the DOE that's going to actually put the brakes on permitting or whether you're really looking at it from a commercial standpoint there's only a market that'll support five or six or timing issues but not a government clamping down on the on the exports itself that comment is largely speculation in my part I don't think it's because of a limitation on the permitting process I just think it's going to be infrastructure limited in terms of where do you have pipelines access to gas access to water deep water to ship it out those kinds of things and then just it's cost prohibitive it's a big capital investment and so if you take all those things together we'll all have 18 or 19 or 20 facilities that are giving this consideration really go through the expense of doing it given that there may be some pipeline limitations and other things so it's anybody's guess and Sarah may have more concrete data on that I don't know if there's no I mean I think so the the sort of the commercial and or infrastructure reality of how much of this is going to get from it for the last several or last couple years right I mean how much do we think would leave if we permitted all of the projects that want it you know it's not going to be 30 DCF right so it's what it's going to be most of the conventional wisdom is six to eight and people are afraid that that's not true or there would be a domestic impact if it was more than that or if the supply base in the United States didn't respond and so that's what the EIA and NERA all of those other groups have been studying for the last couple years but now the big question has sort of shifted in that we seem to have concluded that we think the general macro economic benefits of LNG exports the United States are good for most not great for all but good for most in terms of economic terms the question is does DOE eventually end up permitting all of the permits in the queue and how long would that take and there was a letter from the president yesterday that basically asserted at a six to eight week pace for every permit going forward you would be on a two year time frame to get through that list if you stop that list early and you don't permit all of those projects what do the people who didn't get a permit feel about that and what is their recourse for talking to the government about that so I think that the answer to the question of will there be a pause or will there be a stoppage at some point on the number of permits that non-FTA export permits that the Department of Energy puts out is still very much an open question but has sort of moved to how quickly will you get those permits out because the fact that if you don't get them out fast enough are you not allowing for those projects to have a commercial chance whether you think they do or not in the center here this gentleman yes hi I'm Michael Ivy with Mitsubishi Heavy Industries America you mentioned the petrochemical industry briefly and I believe the number that the American Chemistry Council throws out is 70 billion dollars in planned investment in chemical infrastructure scheduled in the United States in the next few years but that is kind of dependent on having a low priced feedstock and there's going to get to a certain price level where people simply aren't going to pull the trigger on these large investments so when you're talking to your constituents some of which probably very supportive of LNG exports and you're talking to your constituents in the chemical industry how do you balance those two interest groups and is there a point where we can get these parties around the table to agree I do think we'll get to a point of agreement on this I know from a chemical industry perspective there are concerns about whether we'll see price volatility or rising prices that then hurt profit margins export capacity for the petrochemical industry I don't think the amount of gas that's going to be exported will have that kind of impact on the pricing I think we're going to see price stabilization and likely what would happen is and this is again based on everything I've read we'll see a convergence we may see a small uptick in the pricing of gas but at the level of pricing now and over the last several months it really has not even been cost effective to drill so we've seen a lot of companies that do exploration production backing away shifting to oil and so we're not at maximum production of gas right now I think you can hit the sweet spot where a price stabilizes where it's profitable for the chemical industry it's profitable to ship gas and it's a win-win for the U.S. economy you know part of it is going to be with the limitation I mean there's going to be economic limitation as to how many of these companies export economics is going to dictate it but I think if you try to micromanage it with some sort of industrial policy that's the right way to do it we should embrace open trade let the markets sort of work in all this but I think we'll hit a sweet spot right here this gentleman here in the third row and then we'll come to the first round thank you Ambassador David Lewis with Manchester Trade were export advisors to Sabine passion your energy so thank you for your support congressman I'm interested in medium long term short term snafu with regulation permits has something to do with the fact that it's about 2-3 generations old in terms of regulations and legislation the natural national gas act is from the 1930s so we're sort of with a 21st century market model technology and 19th century regulations on this is what's the discussion with you and your colleagues in congress now about eventually when do we upgrade and modernize our national gas act and how this is going to affect the future thank you that's a really important question it's something I've been given consideration to I don't know if other members of congress are thinking about this just yet but under the natural gas act there are a couple of qualifications that would allow exports obviously if we have a free trade agreement it's allowed in countries without a free trade agreement with the United States then this is where the new permitting process comes into play with the department of energy and the requirement there is basically is it in the public interest the national interest do we need to define that better legislatively in statute is something I'm curious about I'd like to consult with a lot of experts on that and try to think through the ramifications because you don't want to tinker with something and create problems that you don't foresee on the front end so I think we might need to look at this in the long run but so far I mean aside from just the delay in the permitting the process seems to be working under current law but I would certainly entertain any expert advice as to whether this needs to be adjusted I don't know Sarah I have a sense of a CSIS project in the making here I just got a sense here Sarah what do you think David it's a great comment I think that one of the things that is increasingly clear on a number of fronts is that a lot of it was predicated on old policies but then updated a long time ago right and so we have a lot of different things that we need to look at and say gee if we're a net energy exporter in the longer run how do we think about the SPR how do we think about how we govern infrastructure projects that are cross-border or export licenses how do we think about these things and I think you're right once upon a time it was a binary world trade relationships were between two countries we had a fairly straightforward relationship with that amount of variety of trade fronts one of the things that's exceptionally complicated that the congressman alluded to earlier is we're one of the largest petroleum product exporters in the world and which political person among us likes to explain to the average consumer about why they pay what they pay domestically when we've got all this new oil gasoline and diesel and this sort of energy abundance mantra right it's not and you know as people who look at the counterfactuals often tell me if we weren't producing what we're producing today you'd be paying a heck of a lot more so but you know that's always a hard thing to sort of convey to the public and so I think that the real tricky thing is the sort of common sense things you would do to fix it right like say so what is the national interest right how would you define that well spend spend a couple days trying to do that and then put your political hat on and see if you would ever allow that kind of clarity into what is essentially national security policymaking process right which is essentially if we deem this to be against the public interest we hold it within our sovereign right to do something about it who's gonna give that up not a lot of people right so the question is and maybe maybe I'm wrong right I've never run for an office so that but but the question is how do you put clarity in the investment process while sort of maintaining what any and all government probably wants to hold over its natural resources right because there is something different about energy if we admit it to ourselves right we think about it in sort of different sort of national security terms even though it's a basic commodity like a lot of other things it has a security angle and a strategic angle until that changes the question is how do we how do we put a process between ourselves and the export process or any other sort of policy decision making that sort of put some room between the politics of the process and the regulatory structures so people don't feel like gee I know I can get my safety permit and I know I can get the commercial aspects of the deal and the financing done I just don't know when it goes into this black box whether it's ever coming out the other side right and so putting some detail around what that process is what the public hearing process would be I think it may be the area where you get compromised on those kinds of things until we're a little bit further into the shift and maybe we'll feel more comfortable about about how we deal with those national interest decision making processes in the front here then we're going to swing around to this side coming that direction. It's a challenge to get to everybody. It is, it is. My name is Asmok Shah from Business Times first of all I congratulate the CSIS for organizing such thought-provoking symposium which is not only the national security but for international affairs Ambassador Calvert recently just now we mentioned about the India-U.S. Strategic Dialogue which Secretary Kerry laid a big mission in India and about that U.S. Government and the Indian Government are attaching great importance to their energy security not only for the energy but for the national security of both the countries and that is one of the highest priority given by both the countries with this in this regard just few days back I had a talk with India's Minister for Petroleum Gas and I know how things are moving on in this direction this week actually tomorrow there's going to be a big meeting in U.S. IBC leadership conference and there's going to be a conference on this U.S. India CEO Forum on Friday. So all this shows that there's a great opportunity for cooperation between India and U.S. especially the energy sector and about that thing both countries are keen but because still U.S. has not given the permission to start exporting because of the free trade agreement as you mentioned what are the prospects you look for this fast export of U.S. natural gas to India and another thing is that Indian business people private sector is so much interested in investing in America they've already started it and this will encourage Indian business people to invest into manufacturing activities in America which will create so many big jobs today 100,000 jobs are created by Indian investments about 10 billion dollars which can go up to any amount so I would appreciate if you can highlight about this business relationship and energy sector thank you. I think LNG exports to India as this gets started could certainly be a strong facilitator of greater integration investment between the two countries also bilateral trade which is growing but could grow at a faster rate there are other things that need to happen obviously I think we need to move forward with the bilateral investment treaty I think that's really important I think there's a national trade and services agreement that's out there through WTO I think if this were something that India were to embrace it could help facilitate trade and services which I think would really jump start bilateral investment between our two countries I think the absence of those things bilateral investment treaty some agreement on how to deal with services is critically important US companies are still concerned about intellectual property protections some of these other issues forced localization these are barriers that we have to work through but I think there are vehicles to do it I do think this initial step with LNG exports certainly would be a prime facilitator of greater integration India is already doing a great deal of investing in US terminals that's right so there's that element with Louisiana and your energy experts the whole question of focusing on exporting energy is one element but is there any exchange possibility of exchange of technology and expertise with India can Louisiana develop that kind of relationship as well because India also is interested in its own domestic development I think that's a great question for instance in the energy sector we have a number of small energy companies some of them are into manufacturing the equipment all the tools and things that are done in the energy sector these companies would be happy to partner with Indian companies whether it's to enhance exploration and production in India or bilateral investment with Indian investment back in the US I think any and all farms would be welcome but we're going to have to get to some steps or take some steps with regard to how do we integrate these services is there a fair framework that's why I do think the international services agreement would be a good vehicle for the Indian government to consider as would a bilateral investment treaty which takes both sides to come to an agreement on but I think that's a tremendous opportunity between companies and the two countries to do this the gentleman here right in the second row all very good questions the point about expediting this process is something I fully support I think this is a good move for the United States and for US companies so I would like to see these permits in place and let's let this market play out what we've seen in gas markets is certainly from very isolated segmented market to regionalization we've of course seen how the Russians and others have conducted themselves with this using it gas for political purposes it's a very healthy change in the market to have US companies to open contracts open markets conducting this type of work would there be competition with perhaps with Qatar and other countries yes possibly it would be based on price and I think that would be a healthy development but sort of underlying all of that is the grave uncertainty we're seeing in the Middle East right now politically we don't know I don't think any of us know how this will play out will it affect the gulf states in the near future that's there's uncertainty having diversification of supply I think is very important and it's not just India these companies are working out 20 year contracts with Japan and other countries and it will be open I think that's a good I think an American view of energy security that's mutually beneficial Sarah do you want to address that issue of with the US as an energy producer how this is going the relationship with other energy producers sure yeah I mean this is a new development how is this going to play out yeah I think it's obviously a complicated question but one of the things that's important to remember is that the US unconventional oil and gas revolution has already sort of shifted the energy landscape so by taking the United States out to import our status for gas you have gas that was traditionally projected to come to the United States going other places and that adds new market entrants new diversity contract leverage in certain places around the world in terms of other places that we're looking to be importing gas from new places so by virtue of the fact that the United States no longer has that gigantic sucking sound of energy coming to the United States all the time from around the world that has sort of shifted markets in some fundamental ways the second thing that you alluded to that I think is really important to remember is we are not the only place around the world that has these resources and people are speaking strategically about how to develop their own several months back we hosted minister Naimi the Saudi Arabian Oil Minister and he basically said I'm really glad you have a lot of unconventional oil and gas we do too so they're starting to look at producing unconventional shale gas in Saudi Arabia which is certainly going to be an interesting development for their own domestic energy needs as well India is doing the same places like China doing the same, Argentina, Brazil you're starting to see this, New Mexico all over the world re-evaluating their own resource base so it's given this level of resource optimism that is causing people to as you say, sort of look at their own strategic energy platform and say gosh how has this changed for us, is it a more competitive international environment and how do our own domestic resource production strategies sort of fit into that so it's a very sort of strategic and dynamic landscape in that way I would though caution that they're not all producer countries are the same right, some of them have a very sort of mature and responsive and flexible production outlook where they can respond to a lot of different global market environments depending on how they run their own sector and others don't have as much flexibility but compared to five, six years ago where we were just looking for how on earth we were going to be replacing all of the energy resources that we need to meet future demand to one right now where we have a global outlook that seems a little bit more well supplied it doesn't necessarily directly link to a confrontational environment right, there's just a lot more room for thinking about strategically how to work together on issues like this Yes sir I'm on the side here It's Dana Marshall with part of the Transnational Strategy Group Thank you Rick for organizing this I wanted to see if I could explore a different angle that we haven't talked about much but I do think is important in this discussion and that is the sort of the political and economic connections that we're talking about here specifically this the President over the last couple of weeks has come out with both a climate action plan and a power Africa plan both of which of course have important implications for gas important implications for the politics of coal in the United States and abroad versus gas I wonder Congressman if you might be able to speak also Sarah obviously but on how the politics of this nets out is if a war if what the President is suggesting is a war on coal or a war on Wyoming is it an ally is the ally with Louisiana I mean of course I'm joking with that but I just but the politics are obviously very important the political sort of in the economic implications of this of domestically on the action plan and for example on the potential of putting American LNG into Africa for power and to reduce environmental concerns Well I don't know what the details are yet of the President's plan for Africa you know I haven't seen any detail as to how that would be done how it would be funded you know would it be opening up opportunities through the private sector is it going to be some government program I don't know the answer to that my the perspective I have on this recent announcement about emissions and looking at what's going on with coal it struck me that the President's under a lot of pressure to approve the Keystone Pipeline and he's also under a lot of pressure from environmental groups so I might be reading tea leaves on this but I'm thinking maybe he announced this emissions policy to give himself some space to approve Keystone later this summer I mean certainly the policy fits within his view of of environmentalism and energy but I think I suspect he's again I'm reading tea leaves he may be trying to create some space to approve the Keystone Pipeline because there's no reason not to approve it based on everything that we have out there and I think it's important I mean this will help us further integrate markets that trained derailment recently and the dangers you have in shipping oil especially through by rail through population density areas and pipelines ultimately are the safest way to do this so that's my thought on it but I don't know any further detail Sarah I don't know if you've seen any detail on what they're proposing for Africa yeah so I mean I think on both plans I'm going to be sort of a political here and I don't look at this as strictly sort of like political lenses sort of the war on cold pieces has been sort of used as a descriptor of the climate change plan I think for my money I think that the Obama administration fundamentally believes that they need to do something about climate change and they're trying to be politically pragmatic about what is possible for them to do in the time they have remaining and I take it as genuinely as that and so when you when you look at what the climate change plan was that they pulled out it had several component pieces one was you know reducing emissions and much of that comes through power sector energy efficiency regulation and that's the part that's been deemed war on cold but this is coming from the exact same administration who when they first came in proposed cap and trade programs that tried to make a lot of space for full and nobody was calling it a war on cold end so this is a sub optimal solution I fundamentally believe that that folks have looked at climate change as sort of reducing emissions to combat climate change feel like this policy is not necessarily the one that anybody wanted to be the outcome but it is the one that's possible at this point I think the way that that feeds into so I think that the administration has sort of caught between a rock and a hard place right they wanted a world in which we're transitioning away from fossil-based energy sources over the next multiple decade old time frame right so that we can do something about climate change but at the same time we've got this you know unconventional oil and gas revolution in the United States and as much coal as we've ever had and so you have to find a way to square that circle if you believe that the economic good that comes from you know producing fossil-based energy sources is something that's fundamentally good for your economy but over the long run you don't believe it's good for the climate that is not an easy problem to solve and that's domestically when you take it to like the power Africa initiative which is essentially you know there has been a predominant we're having an event on this another program here is having an event on this here on Friday but you look at it and it's basically another question that's difficult to solve which is how do you look at you know providing energy resources in places where energy resources are desperately needed as part of the equation for development in a way that makes commercial sense with again the looming sector of climate change right I mean this has been an ongoing debate within the developing community do you allow the cheapest energy sources which are not necessarily the lowest carbon energy sources going forward or do you promote things that are more expensive in the hope that you can jump start some of those things and oh by the way how do you do all of this in a fiscally and economically challenged environment right not easy stuff but the themes that have come out of it I think are kind of interesting on the domestic side you know the fact that we're now talking about adaptation and science and mitigation all in the same thrust I think that's the right direction yeah so you know a lot of these points about the US debate climate change fossil fuel core those same points are being raised within the context of India India is going through that same debate in fact Secretary Kerry on his trip his major focus if there was a major focus was on climate change and working more closely with India on that issue we had Vikram Mehta here a couple of years ago he was then chairman of Shell the Shell group in India and he gave a major speech on India's energy policy and its future and he said in that speech that he gave that the key element of India's strategy is to focus on natural gas and then he said this natural gas is the bridge fuel between our present position and our hope for future situation when renewables become a more dominant part of the energy basket so this is all of these pieces are working together in both countries we're trying to figure out how to do it the timing sequencing and the rest so we've got I think only about five more minutes why don't we do this I see two hands up now I see four hands up that actually wasn't a call for more hands when I said two hands up let's do these two hands here I regret to say we'll have to stop there if you both ask your questions and then we'll have the congressman and Sarah respond hi I'm Colin Smith with the American Council on Renewable Energy and I wanted to return the conversation to logistics of developing this industry on a large scale already there's some questions about or concerns that the water intensive process of hydraulic fracturing is contributing to drought in Texas and I'm just wondering how we can balance the need for urgency in this situation with the desire to develop an industry in a way that will give us this energy security without sacrificing the natural resources that are also very important Claire Richardson Barlow CSIS my question is actually a very good follow up to that and a follow up to something that you said ambassador I'm just wondering how social license issues are being addressed in India if there are any with regards to importing natural gas the utilization of more natural gas and congressman if you could also speak to addressing social license issues here in the United States as well thank you well with the water situation obviously the water needed for hydraulic fracturing is a concern and I know that now I'm not an expert on all the technology but I know a lot of these companies are looking at ways to reduce the water usage recycling and so forth but that's also a limitation in other countries for instance China which supposedly has large unconventional reserves they have a water problem and so that creates a limitation and how you're going to get this gas out and ultimately to market I think it's also a factor in Australia as well in addition to having to build up pipelines but the water issue is important and the concern about whether aquifers are affected I think that technology is pretty well established to protect aquifers but the water usage issue remains one of the limitations and I believe technology over time will help to solve that and the license issue I think helped me with this you asked with regard to India well in the U.S. I know right now a lot of the regulations done state by state and there are groups that are very concerned about whether to move forward with this for a variety of reasons I think what we're seeing in some of the states for instance Ohio and Pennsylvania is a shifting of opinion to get positive the key is to get the right information out and get factual information out and not distorted distortion of the facts that will affect public opinion adversely I know the EPA has looked at all this and still hasn't gotten involved in it because they cannot find the science to verify some of the claims moving forward the key is to get the facts out more than anything I can't speak to India you and I will talk about this since our offices are next to each other after the session about social licensing in India just real quickly on both of those issues they're both exceptionally important we spent a full year talking about unconventional gas development does it being managed here in the United States and a huge part of that conversation was around people's concern over the ability to do this safely and part of that had to do with water now the one thing we learned is energy politics are less complicated than water politics right that's something I've learned over the years of doing energy it's a battle between energy and water water will win you can't presume that the water politics and the way water resources are managed in the world or with the country are fundamentally altered by are one straight forward and managed well and didn't have problems in and of themselves before energy production whether it's unconventional gas or oil or whether it's for power generation or whether for biofuels development right and so it is very hard to make overarching statements about water quality and water quantity issues other than how to manage them within the context in which you exist so if you are in a water scarce area you are probably going to have to bring technology applications to bear that help you manage that issue whether it's recycling or waterless drilling so part of this is trying to figure out where those places where that's the key issue and a lot of countries around the world big question is will they be able to bring those technologies across competitive or will they be using their water resources that they used to use for some other purpose for this because they think it's more economically viable these are questions that I think are getting worked out on a case by case basis the water quality issue is a whole different bottleneck and I think that that being able to make sure that you manage water resources in a way that doesn't degrade the overall resource and that's what a lot of the regulation that you're seeing in a lot of places around the United States is focusing on the social license pieces is the most important thing that everybody always brings up but nobody has a very straight answer to right I mean we talk about it every meeting I ever have dealing with unconventional oil and gas we talk about the social license question and really I think one of the things that we concluded that we did is social license is something you earn right and you're done it's something you're constantly re-earning and I think that companies who operate in environments that are close to local communities understand that you have to sort of constantly be re-winning the public confidence about the process that you're undertaking and I think that there's been a the nature of how this development happened in the United States means that we had the development and the conversation about how people felt about it right because local landowners were basically able to make money off the resource being developed and then communities sort of got involved and everyone got up to speed I don't know any other country around the world that wants to do that right so now what's happening is you're seeing other countries have their conversation about social license first and say gee do we feel like these are risks that we can take and it's a fundamentally different process than what we had in the United States but as I'm sure the congressman can can attest to it's not it's not a one sided thing right I mean people see benefits and people are worried about the concerns and sometimes those are the same people right so last word congressman do you have a final sort of take away message on this subject that you want to leave with the audience well I think last word would be that we're on the verge of something new that's potentially tremendously beneficial to both the United States and India and other countries that depend on energy and the fact of the matter is that the United States is moving into a new area where we're now potentially a net exporter of a number of types of energy products and that's a very promising development well I think there's the expression sometimes overused about these things being a win-win but in this case it is a win-win in fact I mentioned several handouts if you haven't gotten them on the way in on your way out please get them one is our monthly publication the U.S. India insight last month it was on U.S. energy exports to India a game changer in fact I think the whole energy cooperation with large between the United States and India is a game changer for the bilateral relationship so please take a look at those so once again let me thank you very much for being not only here today but last month you're becoming a part of the CSIS family you'll be invited to you know holiday parties now all the good things but we do greatly appreciate it congressman Sarah thank you for co-sponsoring this with me and all of your great comments so let's have a round of applause thank you very much