MODERATOR:  Okay.  Who has questions?

QUESTION:  Can I ask two Indo-Pacific-related questions?  You just mentioned the MOU with Australia.  So how is the U.S. and Australia going to work together on rare earth minerals?  And also, how are the two countries going to work to maybe sort of counter other countries’ reliance on, say, China?

And then the second – if I can ask a second question.

SENIOR STATE DEPARTMENT OFFICIAL:  Yeah.

QUESTION:  The second question is regarding Japan.  Does the U.S. have any sort of joint projects with Japan that you’re implementing now as part of the U.S. Free and Open Indo-Pacific Strategy?

SENIOR STATE DEPARTMENT OFFICIAL:  Yeah.  So with Australia we have a rare earths bilateral relationship that – the contours of which and the details the governments are in discussion to fine tune that.  But it is to ensure a robust, resilient, and reliable supply chain of rare earths.  And it’s not just the digging stuff up, but also goes into the entire chain so the process ends well.

There’s – you would expect to see some public-private kind of dialogue as well as companies in both respective countries have an interest in this, as well as the countries themselves as being significant demand centers and having some real technical competency to support it.

The MOU I mentioned was Australia’s signing of the Energy Resource Governance Initiative, which is the multi-country idea, which is the countries that have demonstrated best practice of extraction, of minerals extraction over the longer term.  Very diverse countries, very different histories, different regulatory environments.  We’re very proud of the U.S. model, but we also recognize it’s not the only one.  And Australia, Canada, Botswana, Peru, these countries have very different histories, regulatory structures, but they all have demonstrated best practices.

So we believe that through collaboration together we’ll be able to tease out what would really be a government-to-government regulatory global best practice standard, which then we could go to other countries – like I mentioned Namibia – to help them identify not a U.S. system necessarily, but what is truly a global best practice that they can incorporate, and provide them a toolkit and capacity to execute that as they would.

With respect to the U.S.-Japan, we recently announced some additional commitments with the Japanese in the – under the Asia EDGE frame.  There’s the U.S. – Japanese-U.S. Strategic Energy Partnership, or JUSEP.  There’s also a new one, another acronym, JUMP, which is focused on the Mekong.  These are two areas where the U.S. and Japan will partner to have investments in third countries, the idea being to support transparent, open, efficient energy markets in the system.  Of course, Japan is a big energy consumer, but it’s in all of our interests that we have a free, fair, and transparent market in the region.

QUESTION:  Have any projects actually begun, or are you just discussing what you want to do?

SENIOR STATE DEPARTMENT OFFICIAL:  I don’t – we can get back to you on specifics on projects.

QUESTION:  Okay.  And sorry, back to – with Australia.

SENIOR STATE DEPARTMENT OFFICIAL:  Yeah.

QUESTION:  Is the U.S. and Australia doing anything to sort of counter China dominance in rare earth minerals or anything?  Or are you not looking at that?

SENIOR STATE DEPARTMENT OFFICIAL:  I mean, I think what we’re focused on isn’t necessarily to counter anyone, it’s to improve and ensure that there is a robust, resilient, and reliable supply chain.

MODERATOR:  Who are you with?

QUESTION:  Hi, I’m Emily Meredith.  I’m with Energy Intelligence.

MODERATOR:  Oh, great.  Thanks for coming.

QUESTION:  Thanks.  No, thank you for doing this.  So you were in Abu Dhabi as well.

SENIOR STATE DEPARTMENT OFFICIAL:  Yeah.

QUESTION:  And you talked before about the need to crack down on Iran oil products trade.  There’s been some reporting about products trade through the UAE, namely Fujairah.  So can you talk a little bit about maybe a message that you delivered, what you’re looking for the UAE to do, whether you think what’s happening now is kind of where things are going to go or where they’re going to be, or if you think there’ll be movement in another direction?

SENIOR STATE DEPARTMENT OFFICIAL:  Well, what I spoke about while I was there was that there was – our maximum pressure – well, first I was acknowledging the relative success of our maximum pressure campaign, which was targeting on the revenue that the Iranian regime generates from oil sales.  That’s the target, is going after the revenue, the means by which is oil sales.  So taking two million or whatever barrels off the market is pretty – I think we can give ourselves a little golf clap for that, without any dislocation in terms of the market.

What I also said was that there – we’re not stopping there.  Again, we’re trying to make sure that we’re identifying the areas for further – to further tighten to ensure this is going after the right targets, which is those that are generating the revenue.  I wasn’t specific as to whatever you were specifically – whatever reporting you were referencing.  I don’t have that before me, but that’s the – that was the context of my discussions there.

MODERATOR:  Yeah, hi.  Who are you with?

QUESTION:  Hi.  Tim Gardner at Reuters.

SENIOR STATE DEPARTMENT OFFICIAL:  Hey, Tim.

MODERATOR:  Oh, great.  Hey, Tim.

QUESTION:  Also on Abu Dhabi, you were asked about Iran sanctions and sort of the more recent ones in terms of oil or the ones on Cosco, on the 25th —

SENIOR STATE DEPARTMENT OFFICIAL:  Yeah.

QUESTION:  — and then the general license that was issued in October.  What’s your view on how effective they’ve been?  Some data has come out for October and it looked just like September, maybe a little bit less.  But considering that the ships can turn off their transponders, what do you think of the effectiveness?  Thanks.

SENIOR STATE DEPARTMENT OFFICIAL:  Well, I think I also referenced the Iranian regime is a criminal enterprise, and criminals are always looking for ways to evade the standards of law and the international community.  And so I think that we certainly anticipate that the Iranians will continue to – until they stop their malign behavior, it’s reasonable to anticipate that a criminal will continue to behave like a criminal.

We continue to move toward enforcement, and this is not just a State effort; it’s an interagency, whole-of-government effort, as well as working in coordination with other partners in the region.

MODERATOR:  Go ahead.

QUESTION:  Hi.  I’m Brian Scheid with S&P Global Platts.

SENIOR STATE DEPARTMENT OFFICIAL:  Hi, Brian.

QUESTION:  So while you were in Abu Dhabi, the IEA came out with this big report on the oil market and said by 2030, the Permian alone will produce more oil than all of Africa.  I’m wondering —

SENIOR STATE DEPARTMENT OFFICIAL:  Wow.

QUESTION:  — on the supply side, while you were in Africa, while you were in Abu Dhabi —

SENIOR STATE DEPARTMENT OFFICIAL:  Yeah.

QUESTION:  — did you get any concern about the impact that sanctions were having on supply?  And what was your message about what U.S. producers may be doing for that potential supply situation?

SENIOR STATE DEPARTMENT OFFICIAL:  No, no one was really asked about, expressed concern.  You mean supply that would be oversupplied or supply that would be —

QUESTION:  With both – I mean both oversupply and the impact on crude characteristics, light oil versus heavy oil, and the fact that the U.S. is taking all this heavy oil off the market.

SENIOR STATE DEPARTMENT OFFICIAL:  Yeah.  No, that really wasn’t – didn’t come up at all.  There was questions more broadly about Permian and investor discussions and financing, but I think that’s – the market will play that out.  The rocks are the same.  The resource base is the same and it will be developed based on market conditions.  I think the virtue of our system is that we, the U.S. Government, do not determine production levels or anything else.  It’s the allowing for the private sector to do – to get after it, to innovate, and be – and respond to the market, and they’ll be the one to determine sort of how and when that gets produced.

MODERATOR:  Jessica?

QUESTION:  I was wondering if you were following the case of Vedanta in Zambia, where the burden of Chinese debt has caused the government to try to expropriate the resources owned by the Indian company, and whether you think this is a pattern that could be repeated across Africa as the weight of Chinese debt kicks in more.

SENIOR STATE DEPARTMENT OFFICIAL:  I’m afraid I don’t have the details on it so I don’t want to comment on that specifically, but I did recognize that the – what we’re offering is a differentiated model, and we are not – we, the U.S. investor, the invest – the way U.S. companies make investments is free from any kind of government interference.  There is not an alternative motive.  There – the objective is to create that win-win where the U.S. firm is able to develop a fair return on behalf of their shareholders.  They in so doing oftentimes build the capacity of local communities, they invest for the long haul, and they adopt the best safety environmental protections in the world.  I, in my Africa Oil keynote address, I cautioned against any kind of investment that doesn’t adopt similar conditions, whether it’s a U.S. investor or not.  I think my remarks, my comments were pretty well received there and – but I don’t have the specifics on that situation, but that sounds really, really tragic.

QUESTION:  But generally, as a trend – I mean, for a lot of countries it’s too late, right, to go back one some of the Chinese investments that have been made and now they have this swelling debt problem.  Do you see this as something that could come up for U.S. companies as well, as local governments grapple with how to deal with the repayments?  Or do you think that the Zambia situation is just a one-off?

SENIOR STATE DEPARTMENT OFFICIAL:  Well, the – I think the – your point that you’re raising is a good one, and I think the rest of the world is starting to catch up, and African countries in particular are catching up to the Chinese debt diplomacy model.  What we would hope that they’d do is to encourage whoever’s investing in their countries to not fall into the debt trap.  My comments before how we work in partnership with countries is help them to build the capacity to develop their own resource industries – and their own industries more broadly, but in my patch, their own resources – and do it in a way that’ll attract the appropriate kind of investment that won’t be the preconditions of a debt trap.

We’ll have to look into the Zambia question and we can get more – something more specific on that.

MODERATOR:  I think – yeah, go ahead.  Shaun, Nick, whoever.  Sorry.

QUESTION:  Yeah.  Sure.

MODERATOR:  We probably have time for like – you have a hard stop at what time?

SENIOR STATE DEPARTMENT OFFICIAL:  I don’t know.

STAFF:  Two-thirty.

SENIOR STATE DEPARTMENT OFFICIAL:  Okay.

MODERATOR:  We have time to – a couple more.  Can we do two more?

QUESTION:  Yes.

MODERATOR:  Okay.  Go ahead.

QUESTION:  Could I just ask you if you have an update on Power Africa, since you were in Africa recently?  That was – of course, was a project that was initiated by the previous administration, but as I understand it, right, it’s still continuing.

SENIOR STATE DEPARTMENT OFFICIAL:  It is.

QUESTION:  Could you give an update on where that is?  And also, the previous administration had a bit of a push for renewable energy as a strong component.  Is that something that’s continuing with this administration?  How do you balance renewables with other energy forms?

SENIOR STATE DEPARTMENT OFFICIAL:  Yeah, thanks.  So Power Africa is still going.  I acknowledged Power Africa in my Africa Oil Week keynote as well as Prosper Africa, which is a new, bigger, broader than just power and it talks about facilitating Africa trade.  I mean, Africa is – it’s the youngest continent on the planet.  It’s just – it has the dynamism and the growth that’s happening there, there’s some of the fastest-growing countries in the world, and so that brings a level of energy and opportunity.

What I’m really keen to do is move – we’ve been talking about Africa, the potential, for a very long time and Power Africa was one of those tools.  I think we are now at a stage where we can move from potential to reality, and based on that partnership-based model.  Power Africa continues.  It’s an important program.  While we approach things based on all of the above approach, and that is not particular to any type of energy source.  A lot of these – a lot of countries in Southern Africa in particular have significant solar potential opportunity, but they also have coal and they also may have gas.  What I increasingly see is an integration of energy systems; not one type.  It’s not a fossil versus renewable kind of paradigm.  In fact, globally, when you see scaled renewables deployed, oftentimes natural gas is the foundation to then scale up other forms of energy.

I was recently in New Delhi.  We had an existing program called the Clean Energy Task Force with – in India, and in that situation the government, one, had very ambitious federal targets for renewable deployment.  They’d been doing pretty good – pretty well on capacity, but they’ve had some challenges on utilization.  So I was out there to launch a new program.  The chairman of FERC went out with me, looking at – called the Flexible Resources to integrate gas into renewables as well as energy efficiencies, to help them to achieve their ambition not just on clean energy, but also air quality and all the rest of it, to have an integrated holistic solution.  So it’s not a this type of energy versus that, but bringing them together and creating an integrated system, because only then will you really see scaled kind of energy being deployed.

QUESTION:  Can you —

SENIOR STATE DEPARTMENT OFFICIAL:  Yeah.

QUESTION:  Can I please ask about GERD?  G-E-R-D.  Do you have any discussion with your African counterparts on the – on the negotiations about the Grand Ethiopia Renaissance Dam, the Nile dam?  What kind of discussion do you have with your African counterparts?  And in your vision, what does the ideal solution look like?  Do you feel like State Department is being sidelined, because Treasury seems to take the lead?  Thank you.

SENIOR STATE DEPARTMENT OFFICIAL:  I don’t have enough information.  I’ll have to dig into that and get back to you on that.

QUESTION:  Can you give two words on Ukraine, whether or not your office is at all involved in reforms for Naftogaz, the Ukrainian gas company?

SENIOR STATE DEPARTMENT OFFICIAL:  The department’s been involved in that and, broader, in collaboration with Europe, the commission.  In Europe the commission has been calling for unbundling and we’ve been supportive of that effort, which has been longstanding.

QUESTION:  But how about the board of Naftogaz, because there’s – the energy secretary had been —

SENIOR STATE DEPARTMENT OFFICIAL:  That’s not something we’ve been involved in.

MODERATOR:  Okay.  Thanks, everybody.  See you tomorrow.

QUESTION:  Thank you.

SENIOR STATE DEPARTMENT OFFICIAL:  Thank you.

 

U.S. Department of State

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