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tv   Key Capitol Hill Hearings  CSPAN  July 3, 2014 2:30pm-4:31pm EDT

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and killed by terrorists that are only committed to naming as many innocent people as possible regardless of their religion, at the city, and enough for further terrorists. this isn't just a threat to iraq. this threat to the entire region is beyond. among other things to rise as the situation is resolved and addressed. if allowed to control the gains further, isaf will have a safe haven in the heart of the middle east and in rusted metal iraq from which they can train fighters and launch additional attacks against the iraqi people, it neighbors. thank you again for the opportunity that we look forward to many questions.
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>> look ahead to a year from now. but will iraq look like quick >> there's a real possibility will have three de facto states. the official state dominated by the shia arabs in the south. the islamic state or the isil state in syria and iraq and the very top of his kurdish entity in the north. >> how that function? >> it will function well. they will be at odds with each other. however another alternative will work to find a way to unify the country's and then how golf course is to write to retake in the territory from the isil. that's the best way, but it's in trouble right now. >> you can see out the iraqi ambassador's comment that 4:10 eastern in today's "washington journal" site that with jeffrey anytime on her website that is c-span.org.
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>> booktv sat down with former secretary of state work with didn't discuss her new book, "hard choices." >> you don't make peace with your friends. make it with people who are your adversaries, who have killed those who care about your people are those who you are trying to protect. it is a psychological drama. you have to get into the head of
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those on the other side because you have to change their calculation enough to get them to the table. i talk about what we did in iran. you had to put a lot of economic pressure to get them to the table and lunacy that happens, but that has to be the first step. i read about what we did in afghanistan and pakistan, trying to get the taliban to the table for a comprehensive discussion with the government of afghanistan. in iraq today, i think what we have to understand is that it is primarily a political problem that has to be addressed. the ascension of the sunni extremist, so-called isis group is taking advantage of the breakdown in political dialogue and the total lack of trust between the maliki government, the sunni leaders and the kurdish leaders. >> is hillary clinton's saturday
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that an p.m. eastern on sunday morning at 9:15 spin twos booktv. >> an upcoming european energy rushes change your relationship with western countries in your strategy for helping ukraine to be more energy dependent, carlos pascual come a former u.s. ambassador to ukraine another special envoy of coordinator for energy affairs on the u.s. ambassador's to russia, georgia and kazakhstan jordan farmer energy department official at
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this forum hosted by the with fenner. -- by the wilson center. [inaudible conversations] >> i want to welcome everyone. i ambler rupert, vice president for programs here at the wilson center and i want to welcome everyone on the has to jane harman, the president, director of ceo of the wilson center who is out of town at the moment, but she wishes she could be here because this is going to be a really interesting and port session. it is interesting both for what you will hear today and because this is the inaugural session of what will be ongoing seminar series looking at energy issues in different regions of the world. we hope to have the series continue more on every other month. one of the reasons for doing
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this is because obviously energy is a golden word. we were just talking about how unlike say imperial russian law, energy will fill a room in washington. there are real reasons for that because the issues we are going to talk about very much will affect how we live our lives. so it is important for us to be adding to the conversation about energy into do so by building on the wilson center thanks by focusing on regions around the world and bringing the regional dimension. the series then this book comes from a book, which is really the brainchild of one of the panelists, jan kalicki, who is here and has been affiliated for a long time. he has been the animating force behind a number of center at cavities and for the book that
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is on sale outside, energy and security and this is the second edition of the book. the first edition was about the bestseller at the wilson center press. i say about because there was a book on terrorism that run sql with it. but it is obviously an art topic ng and has always assembled for panels like this wonderful experts. so we are fortunate to have jan with us. he was at chevron for 13 years in eight years in the clinton administration before that. we are also very honored to be joined by the very distinguished group of very senior people, including ambassadors and it will be i'm sure a wonderful, wonderful panel. so in fact, i am going to turn the chair over to matt rojansky of the institute.
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i want to thank matt and his staff for pulling together the session. as always, the kennedy staff has done a wonderful job. >> thanks very much, blair. i am in fact not substitute. anyone who has not figured that out might be in the wrong room. part of the reason we're all here, as blair said come is because of the phenomenal experts gathered on this panel and who have helped the kennedy institute and the wilson center really to make a mark on the energy. i am thankful to jan and not you and julia at a time like this because it is of particular could earn that not everything be understood through the land of the current conflict, the current tragedy, the current fascinating development in ukraine, but actually understood on it. on a deeper level in some cases
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in a very tight go away in to be able to grasp what may happen in the future, including in connection with the crisis. so we won't shy away from that by any means, but we want to take a broader look at the same time. the kennan institute is the wilson center's oldest program. we celebrated our 40th anniversary this year. we have over 400 alum night throughout the russian federation. we have more than 100 ukraine, all throughout ukraine, including either way in crimea. we are proud to be the first at the wilson center to host will now be the synergy series. other programs we expect to follow through china, north america, are, latin america, middle east, africa and others. now, when i think about energy in this region, i frankly don't think about oil and gas. i don't think about power lines.
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i don't think about environmental impacts. i think mostly about organization because the psychological key for development and for political success on this entire part of the world is modernization. energy is so central to the issue that i think it has almost become a part of the psychological lexicon of politics and people throughout the post-soviet space. russia assert no exception. i think the panel today can address some of these questions, but i'd like to put them out there. is there a change now with the emergence of a new connection between ukraine, but also mobile for and georgia to the european union? is your change fundamentally underway in the dynamics of energy, development and modernization in the region? are we beginning to see a real cleavage that will have real and
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tax? or rbc anytime very that will be just about finished until the political deal is reached and flows will return to normal in every sense. what in the longer term is the positive vision for energy in this region? how can energy be something other than a weapon, and interruption and inadequacy of the system? of course, are we going to come it takes to the politics, which continue to become more and more complex rather than less every day, we see that now. of course the relaunching of the military can gain full scale, are we going to have the time necessary to make the right kinds of decisions about energy issues in this region? at the panel could shed light on all of those questions. my first privilege is to introduce jan kalicki, former counsel to chevron corp. total know some thing about energy and of course editor of the volume
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energy and security. jan. >> thank you, matt and blair for that kind introduction. it's a great leisure to be here with my friend and editor, david colburn is that many long hours together working on the book. my co-author for the chapter we did on russia and my very good friend, john beyrle and william courtney. a lot of good friends were able to come and join us here. let me just say a few words about the ukraine crisis as a way and in the context of how it interacts with energy issues and then i think david will start from the rubric of the book and tackle it from the other side. ukraine, i guess many feel that the immediate crisis may be on its way to stabilizing, but the long-term issues remain.
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for one, solitary and the annexation of crimea stand in the so-called russian hegemony of the server eastern ukraine. second time easterbrook richmond, which seems to be a russian path at least for the time being. instead of western engagement, which seems to be the chosen path in ukraine subject to what happens from day to day every day in the development occurs. nationalist courses are otherwise just another countries an ace for cooperation, i believe, will narrow to the centrist very much coincide. so one has to be pretty skipped to go about. in russia and ukraine, energy is not just a commodity. it is really an economic life preserver and a crucial instrument of influence.
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i think it is important to recognize that while we may have a market view of energy from the western is, it is very much a power political view for the eastern perspective. personally i'm skeptical we can expect the situation to do more than stabilized in the near future. but that is still meaningful. violence can diminish. moscow can return to their.the national regional agenda does. regionally, russian tolerance of kiev's e.u. agreed that can open an opportunity for genuine reform in ukraine is becoming a bridge rather than an orange wedge of southern sindh and if you will and perhaps president bush and the oligarchs stick with then if he can secure interregional support in this country and if the e.u., u.s. and imf put money where our mouth is.
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otherwise as the chinese say, big noise upstairs, nobody coming down. and that is very much a possibility given the nature of western behavior, which is then lots of frederick. some sanctions, which are very specific targeted area. not much in a few of the larger strategy in tatters where the energy becomes very important. i am reminded that the prime minister of the uk's said recently, we have to realize that energy is not a fifth level consideration. it is the first level consideration and i'm glad our european friends are coming to that conclusion. some of us here in this town have been feeling this for quite a long while, but there's some statement to that effect over
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there. so what about the role? i say it is crucial, but in the past it was crucially negative and in the future it has to be crucially positive. in the past, corrupt middlemen siphon up gas revenues, ukraine's gas came at exorbitant prices and russia pressed ahead with alternative pipeline to completely circumvent ukraine. the question in the future is whether ukraine and we can reverse these trends. this implies a concerted effort to replace overpriced russian gas, to overhaul ukraine's domestic gas said and to push back against russia's anti-ukraine pay plan policies. a pretty tall order for sure. statesmanship possible year? erratically yes. energy could reinforce ukraine as the bridge rather than a wedge. i think at least two elements will be needed.
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first, energy as part of an imf loan in reform package and relatedly because they can't go just on their own, replacing the zero-sum type a name with c++ alternative. for example ,-com,-com ma ukraine, russia and the e.u. could each invested one third of the pipeline with a golden share held by the company boosted after gas. these are big challenges and i'm not pretending this is some do you do by tomorrow or the day after tomorrow. in the past, the small leaders, which i think basically especially in kiev, were not at today's challenges. one is always hope when i am an optimist and i think it really is possible certainly we can't do worse in kiev. princes have it way of forcing readers to make waiver
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decisions. russia's economic downturn will acquire, i believe, greater cooperation with the west over time. ukraine can and should be part of this possible, perhaps inevitable agenda. so just clued, i would say that energy is a key strategy for ukraine and russia in vice versa. after david speaks to the other half of this framework, i look forward to hearing from john and bill and julia to help us figure out hopefully was such a strategy might look like and i would like to see again how pleased we are to be hosted by kevin, which is such a major part of the wilson's vendors history and it is a delight to start with this in a timely point given the issues we are facing. >> davis former special envoy for energy and is co-editor of energy and security. >> thanks, matt. thanks to the wilson's honor for hosting this event and all of
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you for coming. in this book that jan and i put together, titleist greater energy strategies for a country in transition. the technological advances in the u.s. from the shale oil and gas revolution has she position of the u.s. in the energy space, that's relative abundance, being a leader to knowledge he had been less of a demand from the world terms of energy come which gives us more status to talk to others about change. we really make two primary points. remake a few because an 800 page book. the primary was today or we have the opportunity to make the energy world are resilient by promulgating the technology overseas, but can u.s. oil in s. abundant to the international market, making oil and gas markets more of themselves by using the financial institutions to make other countries more attractive to energy investments they can be more self-sufficient
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and we can leverage the fact many producers are also big consumers. saudi arabia for one of a lot of consumers and price stability. we have my diplomatic capital that we did. .2 is all we have the ability to make this tidbit in our policy achieves energy not as a weapon, but a force multiplier or total are at least as part of our kit to make change and help other countries be marcel yet, it is unclear whether we can manage promoting development of energy overseas in support for climate change. it is uncertain whether we can under the roots natural gas and a policy statement coming out of the white house and we want to develop them rather than make the world more resilient because were resilient because reusing lesson may have more. it is unclear. the question as it affects russia and ukraine desire we doing all he can with all we have to maximize this advantage.
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no not yet. what are agenda should be for your. europe is not as fully integrated gas market. are we doing enough to move europe in that direction? is your doing enough for itself? development of shale gas. it comes from gas. some of it comes from energy giant unnamed in western europe who do not want to give a relation ships they have with russia. are we doing enough to call them out and to advocate for the promotion and deal with the environment or do we have to say we are too embarrassed to talk about it. and ukraine are say poland and the others and the other scum are we doing enough to promote internal economic change in those countries again icing the answer is probably more we can do for not doing enough yet.
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a third category we have to look at is whether he do enough on her own to connect to market. exporting lng or crude oil, all very hot topics. when we compete with others, we make markets more competitive. we are the only country the oecd that exports the risk of energy and we spent the last 35 years telling everybody else to put restrictions on the exports of energy and develop all they can. maybe this is not sustainable. when we do with these crises can we address these crises come we have to ask ourselves are we doing enough on the agenda to promote this? what about the caspian as well? ambassador courtney will talk about this in his talk. we spent decades trying to build up the caspian and promote exports and are probably wondering where the policy is right now. i think we have done important things. we are helping ukraine the shale shale gas and internal reform. we are helping them on debt.
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if the strategic option is to make energy less profitable for russia, an investment in russia less attractive than provide diversity of supply for europe and diversity of supply for other countries, there's a lot more energy than we could do but are not doing it will talk about what those steps might be. >> thank you very much, david and keeping tourister time limits. ambassador john beyrle was former u.s. ambassador to the russian federation into bulgaria. john. >> thank you. it's great to be back here at the wilson center again and to see so many familiar faces and committed experts. it's always a little daunting to talk to a crowd like this. i think what i would try to do is talk a lot about energy today. i like to maybe pull back a minute and look at the general context of the relationship, the troubled relationship between
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russia and the west or russia and the united states, russia and europe and then hone in on a few last pics that i think make this crisis feel it it different and bring it back to the energy site. there is a temptation for those of us who have been doing u.s. soviet, u.s.-russia relations for most of our careers to see any dispute between russia and the west as just the latest in a series of cyclical downturn, which are almost inevitably followed by upturn. i think more importantly there's always been a 10 d. or an inclination over the last 20 years, since the collapse of the soviet union, to see the strategic parts of russia and the united states, russia and europe and russia and the west is more conversion at the end of the day than convergence. for many, many decades, those of
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us who are in the business of writing talking points, and though, david and jan but many times the talking point do we want a relationship between the united states and russia where we can contain our inevitable disagreement and prevent them from doing damage to the area said the relation ship where we have common interests, where we have shared use, where we have good cooperation. this was never an overwhelming consent this on either side for the last 20 years, but at the end of the day he was usually the argument that one out. so i think one of the central questions that we need to be asking now, whether we are looking at the energy question or regional conflicts in which we would like russia to work with us is can we still agree that these two countries are on convergent eraser to receive these conversion project to reassess achievable.
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or some people would say even desirable anymore. for me, this current downturn, this current crisis over crimea, over ukraine feels quite a bit different than previous ones that i've experienced in my time working in the soviet union and with russia. i point to three quick factors that make you feel different. the first is the scale of economic ties between russia and the united states, russia and the european and more importantly, the willing is of the americans and europeans to use or threat use of sanctions as a policy tool. this is much more salient now than it was even five years ago when we had a down turn actually a crisis and relationship over georgia. the u.s.-russia trade relations ship had a high water mark in 2012 of about $40 billion. but that is only 110 of what the
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russian trade on an annual basis with the europeans. so the stakes are very, very high at this point. i used to talk when i was ambassador about how the trade and investment relationship between the united states and russia is served by some bit of a shock absorbers. it could modulate the inevitable ups and downs of the political relationship that we live through over the years. we have to look at that in a different way now because the size of the economic relationship makes economic relationship in a way or the potential hostage political ups and downs that maybe we thought before. the economic relationship, the scale search light makes this still different than previous ones. a second factor is the very complex political contacts that both the europeans and the american are working as we
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formulate and implement their policies. here in washington, it's been like they used to access the foreign policy stops at the water's edge, that we need to together on, especially on special import countries like russia has been gone for so long it is hard for some of us to even remember it existed for some of the other people in the audience to imagine that it existed. policy towards the ussr and russia used to be in a protected category. i don't think that's true of washington anymore. the appetite of the u.s. congress have it in frustration to use then legislate punitive sanction has never been higher than it is now. an entire generation of congressmen, senators to the russia are not on the ground, people like richard lugar, sam nunn, carl levin, tom lantos, they are all gone or on their way out. i've never known a level of
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misunderstanding of the complex realities and russia to be as low -- as bad as it is in congress right now. i would say the situation is worse in russia with the federation account of an interview sunday night is safe. we've got a problem there. meanwhile in brussels as we all know, the ability of the european symphonic and 58 the european union and the commission released two lowest common denominator solution. none of this engenders respect of russia said that his problem. the third one and i will end on this that makes this crisis feels to me less like a cyclical downturn and more like a signal of a fundamental divergence is the growing strength of russia at this persuasive national idea. you can use the word if you want that questions the utility of partnership with the west and
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rejects western values and institutions as any kind of a model for russia. we see this happen is russia turned away from the west and never approaches at some point. .. there are two trajectories inside of russia right now and it is discouraging for me to see how much of that new national idea is founded on a mythology that the west and the united states want to weaken russia. a weak russia, in my opinion, and the opinion of everyone i know who does policy on russia, europe and the united states, a weak russia is our worst nightmare but working with russia to make it stronger and to find especially through energy cooperation a way to have russia prosper and become more
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integrated into the world economy is really the name of the game and i hope we'll be able to dig a little deeper into that in the next hour or so. >> thank you very much, john. bi courtneyas thank you very much, john. bill courtney was the u.s. ambassador to kazakhstan. >> let me comment on the strategic context and what i will call the giants to the south of russia, azerbaijan, turkmenistan and kazakhstan. the first word of changes china. in 2011 its gdp was 4.7 times larger than russia. the imf estimates that in 2018, only seven years later the gdp will be six times higher than russia leveraging this economic dynamism china is investing in
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energy and kazakhstan and turkmenistan. china has broken the pipelines from central asia. asia. oil and gas flow eastern over long distances to china. last year the chinese leader visited central asia &-and-sign the tens of billions of dollars in commercial deals. china is also challenging the russian security role. last may proposing creation about defense consultant for mechanisms for a central asia focused regional organization. central asia and russia offers r sources of energy not affordable to interdiction by western navies. in this way, the u.s. military rebalanced asia pacific as benefiting kazakhstan and turkmenistan. the second force of change is russia adding a relative power combined with tactics that alienate. russia has long abused its
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control over energy export pipelines from squeezing landlords, turkmenistan and kazakhstan. the russian saboteurs blew up a pipeline to which turkmenistan exports gas. the kremlin opposed the construction to the oil pipeline, which takes away all from azerbaijan to turkey bypassing russia. they are pressuring neighbors to join the relatively protectionist eurasian economic union. kazakhstan is on board but already grumbling about the higher cost of imports from europe and elsewhere. in bold and by the seizure of crimea they might interfere in northern kazakhstan where several million ethnic russians live. they might even see urgency in this and acting before china's growing influence and kazakhstan makes russian antenna dish and less feasible. another risk to the baby giants
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is the build up in the caspian sea. in april, russia is caspian sea called a snap to nature though. at the same time the russian forces were massing on the border. in both cases, russia sought to intimidate. the drawdown of the nato forces in afghanistan will reduce the security of the energy baby giants. they will be more vulnerable to the flow of narcotics and battle hardened extremists. the drawdown will also reduce pollution logistics support from central asia and they're so -- therefore associated revenues. in early 2012, during the blockage of shipments through pakistan, 85% of coalition supplies in the former soviet union was on the way to afghanistan. now percentages are far lower. the fate of iran could become a fourth source of strategic shift.
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iran has arrangements with the three baby giants, but they would like to shift more energy through into iran. if iran were to reach a nuclear accord that led to renewed international sanctions, export options for the baby giants would improve. new extraction technologies may create a fifth of strategic shift by diminishing the relative contribution to world energy supplies of azerbaijan, kazakhstan and turkmenistan. the liberal government and massive corruption have characterized the three baby giants since the emergence as independent states 22 years ago. the countries may remain politically stable, but the gap between realities and expectations might be rising, especially among the younger and better informed. if a social or political explosion were to emerge, this could affect the strategic context for energy development.
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what might be six potential strategic shifts mean for the region and for the west lack? as pointed out in the book there is a need for stable balance among the neighboring powers, "-end-double-quote. azerbaijan and kazakhstan and perhaps turkmenistan on th the t to remain in the aged in the region. this would help them and ensure a stable balance among the two a. during great powers. the west could also help them fill the security vacuum that would emerge as coalition troops withdraw from afghanistan. energy alone would guarantee the degree of western support for the independence and prosperity of the three baby giants. this, however, may not be enough. as europe and america retrench from some of their far-flung commitments, they will concentrate their foreign-policy energies increasingly on countries that are making progress towards democracy and respect for human rights.
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we see this already in the western support for ukraine and georgia. the main challenges for the three baby giants is to find better ways to couple energy wealth with more freedoms. this will help them build sustainable prosperity and a loyal citizenry that will resist internal and external threats and help their baby giants live at peace with their neighbors as much or powerful. these countries should also try to offset adversities by improving the climate. and these of doing business kazakhstan is near the top one fourth of the countries in the world and azerbaijan is in the top one third. finally, the west should realize that the strength of its support for ukraine against the russian aggression and its support for the reforms and ukraine will send a positive and important signal to central asia and the
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south caucasus and feels itself more exposed to external. the robust western foster and ukraine including economic sanctions on russia will help to detour moscow from coercing other neighbors. demonizing russia is not the right policy but to be touring it is. in the program, julia? >> thank you all for coming. i think that's what i would like to do is spend this in the direction of what this means for russia in terms of russian energy and in the chapter that we authored we did focus quite a bit on russia. to look at how russia must be proceeding some of the developments not only between itself and ukraine but also in the broader region when you look
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at iran and this whole problem of suddenly the countries that have sizable oil and gas resources. for russia i think if you think about the u.s. on conventional energy boom it's putting us on a path to overtaking russia to becoming the world's largest oil-producing nation. we are not there yet. russia produces 10.5 million barrels a day. it's believed a legal producer )-right-paren but moscow has seeking ways to maintain its competitive edge in both oil and gas production and exports and really it's a relationship in this area with the u.s. that is important. important. oil and gas to determine the economic and national security. i think that's important to keep the ninth. you've probably heard the numbers that the legal and gas sector contributes about 70% of the total export revenues.
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50% of its federal budget revenues, 40% of tax revenues, or you'll end gas contribute about one third of russian gdp and high oil prices contribute significantly to the gdp growth. so, in order to underpin its ability to keep the wheel and gas can actually oil production at competitive levels with the u.s., there is a phrase for exploration in the arctic's. to basically develop the next generation of oil and gas projects in russia russia will need the help of the international whaling industry. and as a result it's already lining up each of which bring important technological inputs that are essential for russia today.
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they have dismissed the need right now on the shell gas technology and its development in russia. one of the areas that is important in that discussion today is that neighboring ukraine has unconventional gas resources. and these resources are being targeted by again the international oil industry. shell signed an agreement in eastern ukraine which is on hold right now. chevron has an agreement of production sharing in western ukraine for unconventional gas. and in a sense i suppose if ukraine were to stabilize coming you could see these projects moving forward. the state oil company has been very supportive about the development of unconventional oil resources and it has teamed up with exxon mobil and other
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pilot project in exxon mobil and west siberia but the u.s. energy information administration has estimated that they are technically recoverable in the 75 billion barrels of oil the largest in the world. there is an energy competition between the u.s. and russia that for russia energy is also a lifeline for its economy. that brings us back to one of the subjects today given its proximity, the eu has developed direct oil and gas pipeline links to its eastern neighbor. the level of russian dependence varies by countries in the eu but if you see which countries are most dependent on russian gas it would be germany number one as the largest importer. there's austria and the countries of eastern central europe are very dependent on
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russian gas. so when you think about this new pipeline that's talked about for russia, which again. they are promoting the need for the south stream austria the latest on the site in the country. they are very dependent on russian gas and are also their economies are hurt if gas supplies are cut. if we look at the new, i think for russia the european union and eu 28 croatia is the latest member and turkey, they comprise its largest trading partner.
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it's going to try to hold onto this in terms of revenue and profit. and some gas of course in russia is a very big market. it's the domestic market. the countries in the soviet union started shipping from the lng to asia but we cannot forget that europe is the heart of the gas problems market for the gas. ththe ukrainian russian relationship develops is that in any case, one of the things that russia will get whatever happens is that it is determined to maintain the relationships they have in europe as we have seen
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and it wants to build a new pipeline into europe and will continue to try to not only hold onto its current budget to build the share because in europe it has determined in the future will probably need more russian gas. thank you. thank you for your questions. who has questions? please identify yourself in the name and institution. this discussion is about energy
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and ukraine supposedly. and i heard a lot about russia that as far abut as far as ukras concerned there was work in the modernization. it's more efficient than russia, so isn't there a lot of space. any comments on this? >> who wants to talk about energy. getting the price is right and ukraine is step number one 87 or eight other countries in that category. the demand is higher than it needs to be otherwise getting
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the government to change the system so that you only subsidize the poor and not everybody is politically difficult to do. that his work for the bank and the imf and its also diplomatic work for the u.s. trying to leverage the kind of help to create the kind of reforms. we have the companies like shell and chevron that wants to develop gas in ukraine and i hope they can export to countries that will pay him market price for it and it's only when you start to get that kind of internal reform that the domestic market will be more attractive. bubut there is a lot of work toe done but absolutely you could do more on energy efficiency and pricing but no one will invest in energy efficiency unless you can save money on your electricity bill by spending for high efficiency technology whether that is better windows or thermostat until you are paying for the electricity that you are consuming.
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when you talk about the shale gas development in the ukraine and i hope that they will be plenty available because to the extent that there is the development of resources on the offshore site perhaps. in order to get to that point this isn't something that you do overnight at something that requires years of development of exploration and development production. so, the question is how do you build that bridge from where ukraine is presently which is highly dependent on external sources to one that is less dependent and here is where i
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think it really has to step up because there is the possibility of using the pipes that have been taking the gas and more for european consumption and making that available to ukraine. where does the u.s. come in if we have a more liberal export policy as david is pointing out including an exporting lng and obviously that wouldn't go to ukraine directly but it would be going to europe and requires the facilities in europe that is an investment. but in turn, you will be able to back in more immediately available gas to the european area which in turn won't make it possible to be more responsive in this bridge. how do you justify this?
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i believe it is very important to focus on the investment required to have a safer and more secure neighborhood in which ukraine plays a key role and i don't mind the advocacy on the national security grounds for taking steps to ramp up the regasification system to ramp up the reverse pipeline transportation to meet the requirements pending such time that more might be available within ukraine's states and certainly won't cover more of the requirements. very important thing to focus on, and i was reminded of that because in the last time that a predecessor was about to sign the deal, do you remember that
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there is a 20 billion-dollar actor and putin immediately stepped up and said we will give you $20 billion of credit and reduce the gas prices overnight. when you think and compare that to at least 2 trillion it looks like 4 trillion altogether that we have spent on iraq and afghanistan, you have to wonder about the sense of proportion in the national security strategy. in the $20 billion of investment in the security of europe, to my mind it is a lot more important than the number of expenditures that we have had to make because of an ill-conceived iraq policy. and we have to get into this debate about making the right investments for the right things and not throwing money at the wrong things.
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in ukraine it's been up to 40% of the purchase price and it's one of the most if not the most. as well as limiting the exchange rate a key internal political issue for ukraine is that some of the energy intensive industries in eastern ukraine had realistic market prices for energy will be negative for value-added producing companies. you have seen the prime minister referred to his interim government.
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the price of realism. >> with me ask you a question about the region more broadly which is it seems to me that here in the united states, north america but one way is that despite the dangers of the middle east we haven't had to think of energy production and largely the geopolitical or strategic in the mindset about energy and yet the reason that we are talking about it is overwhelmingly clear title it doesn't seem to be connected tissue between the kinds of points of consumption decisions that we were talking about. how efficient of windows to put in the apartment etc. and that
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is on the efficiency side. you could scale all the way up to the oligarch level production for the ukraine anthrough the un there are other economies, too, where the hand is strengthened by the neighboring countries and so on. what is the smart way to have a region wide conversation that actually does connect dot for not just ordinary people, but people ask the point of the attack and the investment decisions operationally about energy with the geopolitics? so these things don't continue to exist. somehow in the relationship to each other but they forced. >> a quick comment. read the chapter in the book. a nice way of advertising. which talks about the politics of energy and how difficult it is, very challenging it is, and
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there's no easy answer to the question that puts that if you think about the assistance to ukraine and i think people are in the mood to talk about that in the atmosphere certainly in the european context and i would hope also in the u.s. context i think it is well worth making an investment inducements for example for the energy efficiency. the power companies with the encouragement of the states are inducing us to cut back on energy consumption for a very good reason. they don't have to build more power plants which are expensive. similarly, if we can build income and i know that david had a lot to do with the thinking when he was in the state department, build into our assistance program as well as our energy strategy the idea
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that an investment multilateral european u.s. cut off the subsidies, and reducing the pain of that kind of cut outs of it's not just the premium burden. that is a far better investment i think that many of the other things i started to suggest earlier that we throw our money around at because it has intrinsically so much to do with the course of the country in ukraine and has ukraine becomes more sort of market-oriented in terms of its relationship with the countries around it. >> i would have to agree with jan. it's probably a mistake to overgeneralize and call it a region and to have a solution.
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certainly the caspian countries know that production and alternatives or important for their survival. but wester western europe has dt economic interests in the south european states and they are not going to change. like the chapter here it's hard enough in our country that you have the strategic interest of the country and the economic interest. the other challenge you have is you need a bridge if you go to the ambassador in bulgaria you need to say we have indigenous gas and we'll bring you alternatives and their answer is yes. and for the next nine years what are we going to do when the gas is cut off? you have to have an interim solution country by country so i think for the usb have to look more bilaterally but for that you the question is are they going to look at the broad interest that you've identified or will it be the lowest common denominator as we have seen? it's hard to think on that changing but it's only if we see the european union take on that
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strategic and rest and make our political choices like being able to move gas from spain all the way to ukraine to break some of these interests. that is a germany problem and uk problem and brussels. that is a big lift. so i think that would be the answer to the question. they would have to read those changes and drive the country to it before the u.s. we cannot expect that is going to happen and we have to work in smaller bites. >> there will still be countries i would imagine mike bulgaria v. pr battlegrounds in the politicaand politicalbattlegrour parts of this region that have disparate interests will invest in lobbying the opposite way. it's doing that to some extent now. energy policy is a hard sell. domestically it's hard to get people interested in one level and at another level you are
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talking in the unite united staf a simple equation most people can understand. we want our country to be less dependent on foreign sources of energy and the europeans can kind of convinced that all in two we want to be more diversified and less dependent on gas and in particular coming from the east. it would seem to me that with some enlightened leadership in brussels and washington we could put those two imperatives together in a way that could help the united states and the europeans to take your point that we do need to differentiate a bit between the bulgarians and the germans. but if we were to convene a summit in which we set a goal of helping the europeans reduce their gas dependence on russia by 25% in the next two to three years i think that would get their attention and answer our
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own interests. a lot of people in russia would apply that as well many of the russian economists and especially energy economists say only that kind of competition is going to force the russian economy and the russian energy sector to diversify itself and modernize in a way that makes it a more efficient producer in the end. they have a majority of the pipeline gas that is dominated by russian gas. and those types will be difficult to break. it has about 600 that it could produce. it's producing under 500 right now. there is this enormous quantity of gas in russia that really should be oriented to the european market. so i guess the question really for the future is to some degree
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in europe because yes lng will be an option of some magnitude how can you get a cooperative relationship that works better because 20 years from now i think what you may find is that the other pipeline forces are going to be diminishing at the one that's left is really the pipeline gas and that's not going to go away. so, i don't know how you get from here to there but there has to be a solution because that is where the resources are. i am actually ukrainian who was born in germany and who has relatives all over the united states and russia and ukraine and many other european countries.
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they have a different meaning for me because my family is so multinational and right now we all talk about the long-term strategy for the energy sector and we talk about the shale gas which we'd like. we will do even more energy in the european union. however, when i speak to my relatives in ukraine they are worried about the winter coming. and how valuable is the situation because if he cannot hold onto the prices for the utility bills and people go into winter and winter and ukraine to
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my belief become it's very, very cold. without the clear policy of what happens to the general population, ukraine will not survive this winter. so what is your opinion and how do you think the situation can be solved in th the meanwhile ck >> very short term are we going to see another? >> if ukraine doesn't make the energy efficiency changes that the imf is demanding it will lose western support. simple as that. it has no option to continue subsidizing the price of energy and gas in ukraine up to 40% or 25% or whatever. it's going to be short-term adjustments. it's good to be tough in ukraine. there is no getting around that for the most important thing is to start becoming more efficient in the use of energy, consumer lesson that will improve its market power relative to russia and will reduce the potential
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that that has to russia and then get energy out and efficient. and the nuke ring can take advantage of other economic reforms because the market prices for energy. what kind of investments and industry and agriculture makes sense and what kinds do not. so it's going to be shoved meat -- is going to be tough in the short-term. >> do we still need to put a finer point on tough in the short-term because if i short term because if i understood the question right to leverage a change dramatically. >> that's right. ukraine could survive a shutoff of russian nasty for september. you could probably d do it enouh and reduce the flow to be able to cover that it's not for the winters of diplomatically you need to avoid the shutoff of the flows come in second you need to make sure that the storage is full and you maximize what you can bring in.
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but there is no short-term alternative. you couldn't bring in enough coal or oil to keep ukraine. >> can i add to that of the short-term alternative is it fair for russia. russia needs ukraine. the gas last year moved across ukraine of 161 that was consumed by the 28 members in turkey. there will be some sort of agreement on the price. the pricing issue is up for debate right now and russia has cut supplies to ukraine there has to be an agreement for russia as well. short term i think for ukraine the issue is that there is a need on both sides to find a solution and that there has to be gas this winter. i agree. and if there isn't gas flowing
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across ukraineinto europe, then that's an issue with the european union i think russia wants to avoid having any sort of gas cut off in the winter. >> even though i'm not a great sanctions and i'm very much struck by the impact of targeted sanctions. and at the time that the russian economy has gdp growth is going down to one or less percentage come before it was in the 7% range, the economic consequences are being totally antagonistic. and i think that's having an impact on putin and his circle in terms of how they view this. i try to make the point in my opening of a longer-term view in
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which you take another look at shared ownership of the pipeline in ukraine. it was tried before under very different circumstances, but if the possibility is there for the eu and ukraine to have a relationship in the decision-making voice being ukraine, that could be the incentive for the shorter term approach in terms of the pricing. after all, pricing of gas for ukraine has always been politically driven in russia and they were doing everything they could to force ukraine into the eurasian n.. that failed. ukraine now is moving in another direction. the question is how can you keep up as much of a relationship with ukraine in these different circumstances. well, the way to do that perhaps is to talk to you is the
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prospecuse the prospectof longea way that induces russia to perhaps even forget some of the debt that they owe russia for the past gas consumed as part of the deal involving the shared equity approaches to the pipeline. it requires a different political environmen environment doing this, but i think that each side is beginning to recognize the limit of a zero-sum strategy. and what we need to do i think as a policy matter is to come up with ideas like this that show that there are plus plus solutions that are far better than continuing this mindless violence in the east of ukraine and antagonizing the west to the extent of sanctions will be invoked. so i think that all of this can be made into a strategy.
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how you get the support and congressional understanding -- that's beyond my -- i don't know. but i do know that much more progress can be made strategically if we approach this in the right way. >> you weren't kidding when you said you were an optimist. optimist. a gentle ma man in the blue colr over there. >> realistic optimist. >> i will give you that. >> ron davis the former state department. over the past 15 years, the gas problem has invested in the eu companies and gas systems has a lot of subsidiaries and countries. could you comment on how that factors into this whole matter of reducing dependence on russian gas? >> well, let me -- a couple
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things. the antitrust policy which would end the ability to be both a supplier and an odor of the infrastructure needs to be enforced because you're right. as long as the gas problems are directly or indirectly controlled in europe, then it's going to make it harder for the european countries depending on those flows to reduce them and it's going to give them more leverage. you should be able to solve the russian gas wherever you want for the facthe fact that russias addressed in the pipe line into the european model pipeline and other pipelines means that you can't really move that unless they say so. so that impedes the ability to reduce the flow of natural gas from anywhere else from the port-of-spain or anyplace else you can get it in europe where you want to go so that is the model may need to reverse some of the ownership that they are better than they have to make sure that it doesn't go forward
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because you're right. the sho quoted it just isn't very visible. >> we all have this view of the gigantic state which can do all kinds of things to other people. in the spirit of realistic optimism, let me just point out that in russia itself, there is increased competition over gas and they are moving into the gas territory in another attack is they all have very close associations with putin. if anything i think putin is a little bit fed up with the dysfunctionality of the gas problems. so point number one. number two, the gas says if you don't want hours we will give it to the asian side and walk off from europe. what happened? well if you take a look at the asian theater committees have only subscribed by australia and
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potentially the western coast of canada and if the u.s. gets its act together itself. if they shift their gas over to the east. they have all the price issues resolved and you notice the one thing that was kept secret was pricing. and i think that it must be pretty obvious, that is why the chinese are not going to pay the russians the kind of prices that the ukrainians or anybod were ae have paid. that's ridiculous. the room for the maneuver i think has always been overstated in the debate and the degree of competition over gas control in russia is increasing. those are strategic opportunities and we ought to get our act together here a little bit and think about how we can help ukraine, how we can influence russia to my how the eu can be running into the act
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and the way that really is a nice benefit then think about again, i apologize to those who think it's idealistic it won't satisfy everybody but that's what we have. >> i am a faculty member at the university of the district of columbia and my question is the kinwekind of talked about congressional support and about the lack of congress understanding what's happening. so we kind of talked about around it. what would that look like. what woul would congressional st look like in ukraine and russia and what could we do and talk to our preservatives on how to have that conversation click
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in these economic problems we have described it would send a signal to brussels and moscow but especially to the people of ukraine but we are putting our money where our mouth is and with regard to russia. if there is any contact between the russian duma and the congress. ten to 15 per year have dwindled to almost zero. we need to work much harder on our time to reestablish the links between the leaders in the parliaments of both and the staff especially the stuff to help dispel the mythologies that really do nothing to foster
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better understanding or better policymaking towards each other in the absence of that you get the law in russia banning the adoption of the russian orphans or you get the law in the united states which however well-intentioned it might have been i think that it was a negative in terms of u.s. russia relations. the head of the bureau of the natural resources and the state department and the former u.s. ambassador to ukraine. they are well represented for the state department. carlos gave you an overview and talk to the impact of the crisis in the ukraine and russia
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relations and the challenge that may come this winter in the bargaining positions get very tough. we talked about how different the relationship between russia and the west is now because of the depth of economic ties in ad how those are being used in the context of the political crisis and we talked about the region including in the southern belt of the small giants, little giant. i guess bill called them baby giants. azerbaijan, kazakhstan and turkmenistan. and great many other themes. i would like to give you the opportunity to talk for a few minutes on your perspective and then we can still have time for a few questions i couldn't be with you through the entire discussion and i'm glad i was able to join us.
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all our good friends and colleagues here. i think one of the starting point that we have to look at this issue is from the radical change that has happened and the european gas market because as you look at the tensions between russia and ukraine to meet you can take that out of a wider context of what's happening in europe. we have taken extraordinary steps to put in place a much competitive gas market and put in orchid rules under its third energy package so that not one single company could be collected on the gas into the transit systemand transitsystemn systems. in germany and france would have to get permission to re- exports
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that gas. the eu has made it illegal in the european market. that is critical to the whole concept of the review's flows coming back to ukraine they've also put investments that are still not complete. they are like bulgaria that are not part of the network but now basically you can physically move gas from west to east and north to south and south to north in the way that you previously could not have made massive investments in the gasification facilities. and then the other big impact that we have seen in the marketplace is actually caused by the united states. the united states now is producing itch more gas than was ever envisioned. we've increased the production by 35% over the last five years. as a result of that, we are importing just about 5 billion cubic meters of gas and lng a year which was
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previously in the position we would be importing 80. in 2011 and 2012 a lot of the supplies were redirected towards the european market. it has allowed every single utility to renegotiate the contracts with gas to lower the price it extends the financing terms principally in 2011 and 2012 when that took place. the critical objective for ukraine is to be brought into that community of the european n energy so they are part of the strength of the community of the 400 million consumers and left alone.
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that's been the foundation we are trying to move. one of the things we have to note about energy in ukraine in the economics of the country since independence, right bill? who controlled the gas system and controlled money in one election and that has been a reality of the pas past someonef thingso one ofthings for this go change that and put a link to the past and bring greater transparency energy system. the unit of gdp is more than any other country in europe. so what are we trying to do and i think first just to give that a little bit of perspective let me just run over the numbers. 28 comes from russia and produce about 20 so-called reverse flows
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and if that is using the european market that takes advantage of the pipeline capacity that currently exists to move gas in the sense backward through the system from poland and hungary. how do we work with ukraine in order to change at a creation in order to create greater energy security. so in the short term one of the things we have been working on is expanding those 2 million cubic meters of gas to something that could be much larger. poland is at a maximum level of about the rate of 1.5 billion cubic meters a year. hungary could be 6.1 billion. they are currently just at about three and they've recently increased it a little bit. we are working with both ukrainians and the gas suppliers to try to understand how they might be able to take that further. slovakia hasn't had an
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interconnection, but they have recently reached an agreement with ukraine to complete the building physical interconnection that would allow 3 billion cubic meters a year to flow starting in september and that could be expanded with compression to between eight to 10 billion cubic meters a year. so, in effect, if you take those possibilities, what it means is that by the end of 2014, more or less, ukraine could potentially have 5 billion cubic meters of gas when you take into account the amount of time that's available for it to flow and by the end of the next heating system which would be april 1 of next year that they woul would e an additional 10 billion or total of 10 billion of gas that would become available to them through these mechanisms. >> the other critical thing to look at is storage. right now ukraine has about 14 million cubic meters of gas in storage.
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they have to keep about five in the system and not used to maintain the structural integrity of the wells. there's a potential for them to older that up a little bit more because right now in the summer they are producing more than they are consuming and they are bringing something from the readers to close. so if you take that into account, ukraine potentially have sufficient gas between reverse flows, production and storage to keep them in reasonable shape until about december. and that becomes the timeline in which they have to reach this agreement with russia in order to be able to restart the gas flows and the sooner they do it the better. one of the reasons that's important for ukraine to be able to do that is there is a limitation on the size of the pipelines that can actually move gas from russia to the west. so at a certain point when russia is consuming and europe and ukraine is consuming, if there aren't already preposition
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supplies you woul you with in-ds shortages so you have to have a certain amount of already there. let's look at what this could be like in a year if there are some measures that are taken on energy efficiency. ukraine continues to produce 20 billion cubic meters. they have 10 billion in reverse flows so add 30 million cubic meters they reduce consumption by about five. then they are in a position where the amounts that they would have to import from russia would be decreased as a 15 billion cubic meters as opposed to the 28th but they are doing right now. that'that becomes a doable sceno and there are a lot of things that have to happen to make it possible. which really interesting is if you look out a decade and they are what we see his first ukraine has done production sharing contracts with shell and chevron and it has extensive gas capabilities.
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they can produce more conventional gas from the fields to stop producing. ukraine could actually double its production of gas to 40 to 45 billion cubic meters in the course of a decade. it could expand its reverse flow capabilities without trying really hard it could potentially bring that up to 15. production in the flows ukraine could be in the position of producing or having access to 50 to 60 billion cubic meters of gas. remember it is total consumption right now. if it puts in place energy efficiency measures depending on how efficient the balance is off with future economic growth, ukraine realistically could be in a position where within a
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decade it can make the choice of whether it imports gas from russia and if it is commercially advantageous for you to do so if can come and if it's not, it won't and so part of what we are doing is not only trying to help ukraine work through these short-term scenarios have to be able to put in place the mechanisms that are going to allow it to work with private investors to be able to boost its production over time. so that's something that the united states is engaged and working with the european union. the world bank has been on other important player and so all of us are engaged in the process. the final thing i just want to say is on the negotiation process between russia and ukraine. and here the eu has been absolutely critical and i think that they've done an outstanding job. they have been led by the commissioner.
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andy sensually to position that the eu has taken is that we have tried to create a competitive test market in europe. we are extending the gas market and the rules of gas markets to ukraine which is part of the european energy community. as a part of that gas market, there are a few basic things you have to do. one i is applied by the market prices and so the eu put on the table a proposal that gave a number of options and of what prevailing archetype is what we. the second piece of that is that if you buy the gas you can trade it so that there is a freedom to trade and have reverse flows, something that they have contested that the eu has supported and the third. they faced a real problem because they have significant buildup. they put on the table that they
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would immediately make payments if in fact there was a package agreement around all of these efforts. russia walked away from that proposed agreement for one basic reason. i think there were issues that were related to price and issues related to debt. they supported them on this and said that they needed a mutually agreed contract that wasn't simply rare russia decides to give a discount. the earlier contracts from 2009. in a previous great discount is for the black sea fleet and when russia to crimea decided there is no longer the need to give a discount for the black sea crimea so from the political perspective is done in. for ukraine.
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except the foundation for the future of gas relationship which is mutually agreed and not dependent on the unilateral discount from the other side. so that is the starting point where things need to move from here is ideally to get the team that decides back to the negotiating table and the eu has indicated its willingness to do that. ukraine has indicated its willingneswillingness that it wn back to the negotiations. they are still not responding positively. but i hope that in the end it will also see that europe is its largest market for gas and it needs to be seen as a reliant gas supplier and this new competitive world of gas that we see internationally and that all sides would actually benefit from an agreement and relationship that they would work out together. with 30 seconds to prepare your put on the spot and i think we are in pretty good shape. thank you.
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that was extremely helpful in a fantastic complement to what we have heard. .. chance to very briefly close, and then we hope we won't run too far over. there was -- right there. >> teresa, national war college. i wanted to ask a question about the storage. ambassador pascual, you noted that there's 14 billion cubic meters in ukraine right now. as far as i know, their storage capacity is 30 billion. i want to understand the ownership of that storage. does -- is there a transparency problem? is there a part russian ownership problem? in what sense is the storage in nse it usable, and in wha usable and in what sense does it continue to be suspended? >> right there.
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>> thank you. what are the policy goals in ukraine and what are the instruments to achieve those goals? my question is for ambassador pascual. talking about anything can manage ukrainian affairs, managing european affairs, but what about u.s. interests quite so that's my focus. and secondly, with the representation i still do not understand. do you support the ukrainians? everybody agrees that they do not have any other short-term options before this coming winter other than starting the flow of the gas as it is interrupted. >> last question right here.
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>> david goldwyn spoke about unconventional natural gas. >> i name is mariah blake, i might mother jones. in ukraine and other eastern european countries i am wondering what has been done on this front so far, whether the united states is stepping up to the assessors and lightest the efforts in crimea. there is not enough being done, what more would he like to see be done on this? be mac why don't we just go from here down to carlos. does that work for you? to for one ambassador for another. >> on storage come you are correct. ukraine has about 3 billion cubic meters. five of them have to maintain it and cannot use.
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that is gas which is in ukraine's ownership. whether there are specific entities within ukraine who own portions of baghdad is not completely clear. that is one of the things that needs to be confirmed. one of the things that has been a great step forward as the european union maintained faces a for real-time reporting of gas stores, gas movements in gas supplies. ukraine is now participating in that, posting on a weekly basis. they are doing it daily but that has been a great step forward in promoting what they have available. in terms of a ukraine has to work with, with a good feel for it. in terms of what u.s. policy goals are in ukraine, vocals are almost universal, which is to be able to see within ukraine and
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within your environment for the development of natural resources and consumption of these which have been in a context of competition and diversification of supplies if it's good for consumers to have the competitive environment. all of the seats of multiple suppliers to satisfy energy needs. we want to be able to have an environment that allows us to develop urban energy research is to create the right kind of environment that attracts private and the net because that is absolutely key as fundamental. those basic rings have been at the heart of u.s. policy and are not that different from the way we would explain the way we would deal with other countries throughout the world. in terms of ukraine paying its debt, more important than what the united states thinks is ukraine should set its death in the negotiations have with russia, one part of the proposed agreement was the day after the package was agreed to ukraine would make a payment of
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$1 million the critical issue here is ukraine is put on the table in the e.u. has been supportive of this. so you should have a package arrangement that deals with a whole set of issues. what's the price of gas in the future? have you handled that? have you handle pay richmond and what are the rights and arbitration and everyone should have that transparent said the following week you don't just get into another view over another issue and you had a foundation to be able to move forward. i will say one thing about the natural gas region. the david goldman when he started a program called the shell gas technical exchange program is now focused on conventional gas. david will tell you more about it, but the united states has been engaged as many countries throughout the region to exchange best practices on shale and unconventional gas resources. the final thing i want to say is important to recognize that the
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issues we deal with here in energy fundamentally involve commercial players and private players making investments on the basis of what they think is going to be commercially viable and sustainable. so we all need to try to work together to help the countries involved in these disputes to be able to create an environment that allows commercially sound decisions to be reached that are in economic interests of other countries do not have geopolitical fact there's been an eat the driving factors of those arrangements. the foundation for the arrangements relating to be what makes commercial sense and that is one of the things we are trying to get to. >> i think i will defer to david because it's really the shale gas. thanks for the question. actually i thought the u.s. was stepping up support for ukraine.
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in ukraine and all these countries, really the point about within the shale gas initiative, the technology exchange program is for our government to help other governments learn how to regulate properly. the real challenge other than what is the local benefit, the government share in the revenues in a way that will help local development is how to get regulators comfortable that they can protect groundwater, and mediate between agriculture and the locality, that they can avoid seismicity issues and that is also leveraging all the things we've learned in the last three years about the baseline testing of water, emissions, aquifers from a set backs, disclosures, all of this and you learned kind of the hard way to be the starting point for european countries. but while they need to be the
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starting point, the conversation in the european union and the conversation between the united states and the european union ought to move from whether to move from whether we do this to how we should do this and there's a discomfort sometimes it's u.s. policy, not at the state department but ambassador pascual's program, but how do we support development of gas at the same time we promoted climate change agenda? the answers you can do both, especially if you back out: there safely. i'd like to see us do more because of that year up to more. you can only get so much in these countries he'll be relying on russian gas until they get the renewable future, which for us and them is a decade off. need to rebuild it quickly. >> we are so far over time. maybe if there's any final burning comments we burning comments which make them them otherwise we will wrap up. >> i endorse very much the idea of a package giving vent to his
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to develop both short-term and longer-term approaches and one of the things to keep in mind this competition is not only a matter of the european space, but more and more competition in the russian space point that i made earlier about how they are competing themselves. the notion of encouraging a competitive approach in a market-based approach should not be dismissed out of hand. the critical challenge is to develop a political environment in which the stabilization of the crisis in ukraine makes it possible to talk sensibly again about how the economic interests is not just of the west, but frankly of the east to adopt these approaches. everybody will be better off and i think that is the opportunity. through crisis you get to an opportunity. >> but thank our panelists for
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this fantastic discussion. [applause] thank you for joining us. [inaudible conversations] [inaudible conversations] >> kenneth feinberg of general motors for their nation such programs met with reporters this week to talk about his work. here's some of what he had to say. >> can fill about with the. quick question on your interaction with nary far from general motors. how often did you talk with her in setting this up? kinney characterized nature of those conversations? >> i spoke with mary two or three times. almost all of my conversations
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involved other people at general motors. but i did meet with her two or three times. absolutely 100% cooperative. we want to do the right thing. general motors is a great company. we want to do right by those who are innocent victims in general motors has been extremely helpful. i've had a very important not to limit our input from just general motors. i'm into various plaintiffs lawyers around the country and asked them what they thought about some of the features of the protocol and of course the center for auto safety in washington. i miss a general motors said no time -- they signed onto it and you'll have to ask them what they like and don't like about it. they didn't sign off and approved to pay the freight on this. healthy debate, very open, transparent discussion and i
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give general motors a lot of credit for participating in this way. no cash on the aggregate amount of money. i have found when there is an aggregate cap, inevitably a claim that will save you were giving ms because you have to save more to pay somebody else. it is human nature. with no aggregate cap, i can tell every claimant, you don't have to worry about the somebody else is getting. there's no cap in the program and look at what you are entitled to. again, general motors new contributory nakedness, we open old settled claims that allow people to come into the program. general motors not using the bankruptcy bar to undercut what would otherwise be meritorious claims. i can't speak to the history of the problem, but i can certainly speak to the last three months and i must say every bar and her
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colleagues at general motors absolutely 100% cooperative. >> you can see all that mr. feinberg had to say the national press club this week. she'll have it later today at 6:50 p.m. eastern. >> atlanta tonight include hillary clinton on her luck, hard choices and memoir. >> the iraqi ambassador to the u.s. if this country desperately needs more american assistance. training as because of the dire situation caused by the militant group islamic state of iraq area is hard to turn down help from neighboring countries such as
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iran and russia. the ambassador spoke tuesday at the carnegie endowment for international peace. [inaudible conversations] >> good morning. i am marwan muasher. alex thank you all for joining us today for this important discussion of the future of iraq and continuing conflict that we are witnessing with his economic state of iraq with his excellency, the iraqi ambassador, lukman faily. as you know, isis has been in dancing over western iraq over the past month including muscle as well as border crossings with syria and jordan.
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two days ago isis declared occupying iraq and syria as you know sonics take and ushering in a new era of international jihad and further announced the dear leader is childishly finished a. these developments have put the iraqi prime minister nouri al-maliki under intense pressure, international sos message to form a new government as soon as possible. hopefully that would include representation from the sunnis and the kurds in order to give the government additional credibility and it might against isis. today we are honored to host iraqi ambassador to discuss the challenges that exist to form a new intrusive government as well as the continuing struggle against isis.
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ambassadors said to have served as iraqi message the united states since july 2013. archbishops or. archbishops are just ambassador to japan in 2010 through 2013. ambassador sent to also the united kingdom for 20 years, working in the information tech allergy sector so we have common background. serving in senior management positions for two major transnational companies. thank you again for joining us today. let me remind everyone that the ambassador has asked to speak recently for 10 minutes in order to allow the opportunity for you to ask as many questions as possible. he will have to leave at 11:30 so i appreciated if we all can remain seated while the ambassador leaves right after his remarks and of course the question-and-answer session.
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ambassador faily. [applause] >> good morning, everybody. first of all, thank you very much for introducing me and thank you for giving me an opportunity to talk about this prestigious space. is always a privilege for me to be here. marcella such an important time when my country is coming back as a focal point in d.c. as he mentioned intrinsics and the iraqi people are under direct assault extremists who are permitted to a tourist
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haven. that disrespected if i will applaud and targets anybody, including many brothers and sisters who does not fairly soon to the extremist views. yesterday's islamic clothes another level in which isis or isil declare themselves as the only rule in iraq, which provide a challenge for the region and to the globe. the prime minister and his government can't be sold military, but they can only be a comprehensive study than in his security, political and economic reforms as well. the prime minister has stated they are committed to building a national government that embraces and i was all segments of the iraqi society regardless of religious ethnicity and regional backgrounds. i will talk about three primary
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topics. one is reformation of the government tiered second is security issues and 30 support from the united states. the prime minister has sardi rechecked it the violation of the constitution and the election. they consider to be fair by the international community. there has been a lot for us. establishing a government outside the political process would undercut millions of iraqis and potentially destabilize the country. ironically, the election result would promote the same that isis is trying to perpetrate. this would undermine the democracy of the two shins,
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erode confidence in sending message that should be resolved with bullets and not with alice. the bottom line is process must not be the recent terrorist games. otherwise voting means not even balance means everything. the newly elected parliament met earlier today will start the formation of the government. iraqis working to build the institution of government that can serve all the people. the process is underway and must not be undermined. meanwhile the iraqi people are under an immediate and direct threat. an immediate and direct threat from the terrace and the terrors that must be defeated.
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on the security aspects, the prime minister national security team are working to counter the current threat. we desperately need the united states assistance to turn the tide. the iraqi government will send 300 troops, counterterrorist expert to support our armed forces. however, the institutions on the ground of the situation threatened iraq with regional implications. the terrace are the permanent enemy of the iraqi people. we must work to defeat that. therefore, we immediately
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include targeted airstrikes, crucial to defeat the growing threat. time is not on our side, nor is it on her neighbor's side with the united states side. further delay benefits only the terrorists. on a relationship with the united states, which is in the united states as our partner of choice. i relationship is governed by the strategic framework agreement, which we do not have with any other country. naturally we have always sought positive information with other countries as well and the relationship now facing eyes is difficult for us to decline assistance from any other country who shares their perceived danger.
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for example, the rain ants have offered this to provide attorneys said. we have always tried to resist that. however, the situation on the ground may process to acquire more support from our neighbor. another example is iraq has purchased a number of aircraft from russia. our first choices by american-made f-16s. but the process of delivering the jets do not meet the immediate threat we face. the rest assured we will never choose to replace the partnership we have with the united states of any other country. my government has purchased more than $10 billion for the necessary military equipment from the united states. and we are to provide more. our countries are forever tied together because of the lies and
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treasures we spend for the decades. finally, i cannot underscore the fact enough that the people of iraq are being intimidated and killed by terrorists only committed to naming as many innocent people as possible regardless of religion, ethnicity, identity and efforts to advance their terrorist goals. this isn't just a threat. this threat, and the entire region among other things to guys isn't resolved in reverse. if allowed to control the game further, we'll have a safe haven spinning in western iraq from which they can train and launch
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additional attacks. thank you again for the opportunity and i will look forward. [applause] >> thank you very much, ambassador. let me start the discussion. you started your talk by emphasizing it cannot be solved. but i cannot help notice that most of you each has been devoted and you have not given a clear idea of what social processes envisioned to get iraq out of this crisis. many people fear the future of iraq is the state, not just because that's the next, but also because it's occurred now declared or undeclared intention
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to basically separate. so we are talking about the situation in which the very concept of iraq as we know it might be a danger. i hope you can enlighten us more about this and what sort of process you see that would convince all five, sunnis, kurds as well as the shiite that their future remains unified. >> first of all, when i typed about the military support, and the media when we need to change the terrain on the ground fast or effectively. we are aware we need to have a political process alongside the military process development. however, the military support which we have a strategic agreement was talked about the
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integrity and protection of the democratic processes of iraq and that's why emphasize it. situation is developing rapidly. when i talk about the integrity of the state, iraq has never faced such a challenge since its foundation in the state in the early 1920s. the reason is that there are a number of layers behind not. one of social cohesion. the other is the aftermath of dictatorship and impact on the society. it's more or less restored in front mounted and most importantly it gave what it meant to be an iraqi. some in that sense, they consider themselves as
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second-class, third class. the sunnis that they were marginalized in the one. do you have that issue. over the last 10 years the political dice has tried to bring in bridge those communities, those narratives into a cohesive, effective government. and we have challenged that. the effectiveness of parliament, the fragmentation of the political process on all challenges for people to know that nobody is denying that. however, what we face now is a different level altogether, which is to do the terrorist entity, which does not believe in any social appreciation and does not believe in the other. it does not expect others to submit to it. that is a key threat. that terrorist organization is not homegrown. it's transnational, which means it will have certainly an impact on the region and this is where
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you're coming from. when the united states and others can help. iraqis have their own domestic challenges back home. the process is not news. what step forward, to step outward. we do that. and that is natural for a new democracy. it will take time. as long as the balance is resolving our agreement or disagreement, then i'm okay with that. but when you have an immediate threat such as a terrorist national organization, who if you have access to any type of wealth such as oil, control the amount of cash, you can damage the region. this is what we're talking about
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now. the kurds have their nation. the shia have thought they were second-class. the sunnis talk about marginalization. these issues could be resolved in due time providing everybody's process, which we have agreed on and the parliament is the result of that. bearing in mind that in any other society, having such a terrorist attack in the society, yet the election taking place and now it is a sign that people want freedom. people want democracy. the threat we face are getting us in the region. this is what has to be talked about today. rather than the other which will take significant time. we are saying that to be a limit. >> to make things clear because some view sets six as having happened within an

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