Special Briefing
Richard Morningstar
Special Envoy for Eurasian Energy
Via Teleconference
Washington, DC
November 4, 2009

OPERATOR: Welcome, and thank you for standing by. We’d like to inform all participants your lines are in a listen-only mode. During today’s question and answer session, you may press *1 on your touchtone phone. Also, today’s conference is being recorded. If you have any objections, you may disconnect at this time.

I now turn today’s call over to Ambassador Richard Morningstar. Thank you. You may begin.

AMBASSADOR MORNINGSTAR: Hello. I’m going to now first turn you over to Ian Kelly, who will, I guess, have a few introductory comments, and then we’ll go from there.

MR. KELLY: Yeah, this is Ian. I just want to, first of all, establish the ground rules. This is on the record. Welcome to this conference call. And as you know, the participant is Special Envoy for Eurasian Energy Ambassador Richard Morningstar. Ambassador Morningstar has a few remarks to make at the beginning and then we’ll turn it over to your questions.

So, Ambassador Morningstar.

AMBASSADOR MORNINGSTAR: Thank you, Ian. And thank you for joining in the call, all of you who are in listen-only mode for the moment. I’ll say just a few words to open up.

Today, we launched what we’re calling the U.S.-EU Energy Council. On the European side, I suppose they’ll call it the EU-U.S. Energy Council. But this is, we think, a very important dialogue that – and very – I might add, very high-level dialogue that will allow the U.S. – the United States and the European Union to have a very open and deep dialogue on strategic energy issues, on energy policy issues, on questions relating to research and technology, and will allow us to take a holistic approach towards energy in which we look at a combination of strategic issues, technology issues and policy issues, all of which ultimately relate to each other.

This is being done at a high level. The co-chairs on the U.S. side are Secretary Chu, who is there this morning, as well as Secretary Clinton, who as I’m sure you know, is in Cairo and could not be back. But Deputy Secretary Steinberg very ably filled in for her. On the European side also represented were three of the commissioners: the commissioner for – EU Commissioner for Research Potocnik; the Commissioner for Transport and Energy Piebalgs; and the Commissioner for External Relations Ferrero-Waldner; as well as High Representative Solana and Swedish Deputy Prime Minister and Minister for Energy – Economics and Energy, I guess is the title – Minister Oloffson and Foreign Minister Carl Bildt. They, of course, were here for – also for the U.S.-EU Summit yesterday and participated in today’s meetings. I’m sure you all know this is the Swedish presidency period for the EU.

In addition, we – I can tell you that this Energy Council will be broken down into three working groups, all of which were represented at today’s meeting. And we actually had an informal working group lunch afterwards to further talk about our agenda. And the three working groups will work in the area of energy security and markets, energy policies and regulation, as well as energy technologies and research cooperation.

And on the U.S. side, the Department of Energy will be responsible for the work on technology and research. The Department of State and myself, I’ll be responsible for the – on the U.S. side for the group on security and markets. And on the energy policy side, that’s going be shared on the U.S. side by the Department of Energy and the Department of Commerce, co-chaired.

I can get into who’s involved from the European side, I guess, just very briefly. On the energy security and market side, it’ll be the directorate on external relations. Now, that’s all going to change with the passage or the finalization of the Lisbon Treaty, so that will have a state of transition. I guess the high representatives will, in effect, take that over, whoever that will be under after January.

The energy policies questions will be their directorate on research and energy, and then research – the directorate on research will do research and technology. I can get into some of the specific areas that each of these groups will work on, but I think that it probably is better to – with that brief introduction to open it up for your questions.

OPERATOR: Thank you. At this time for questions on the phone, please press *1. Please unmute your line and record your name to be introduced. Again, for questions, press *1. If you’d like to withdraw the request, you may press *2.

Thank you, and one moment for your first question.

AMBASSADOR MORNINGSTAR: Don’t all jump up at once. (Laughter.)

OPERATOR: Okay. Currently, we’re showing no questions. As a reminder, press *1.

AMBASSADOR MORNINGSTAR: I’ll get into (inaudible). Is there anybody – how can we find out if anybody is there?

OPERATOR: Okay. And for the phones, we’re currently showing no questions.

AMBASSADOR MORNINGSTAR: Well, if it makes any sense, I can give you a little more information on what the types of issues will be worked on. But I assume that there are people there. (Laughter.) Maybe – can our operator tell us that there are, in fact, are people who are dialed in?

OPERATOR: Okay. We actually do have some questions that came in queue.


OPERATOR: We have Lachlan Carmichael. Your line is open.

QUESTION: Yes. Hi. This is from AFP News Agency. Yeah, if you can connect these meetings to the overall goals at Copenhagen? And also, how do you plan to reach out to the private sector, and are there anybody – is there anybody involved right now from the private sector?

AMBASSADOR MORNINGSTAR: I can give you the information on that. First of all, the Energy Council will have absolutely nothing to do with Copenhagen climate change negotiations – the negotiations. However, as I’m sure you would recognize, there is a clear relationship between energy technology issues and climate change. And as we work on energy technology issues, which ultimately will reduce dependence on fossil fuel resources, as we look at efficiency issues, by definition, that’s going to have a positive effect with respect to climate change.

The private sector is going to have a – is going to have to have a very significant role with respect to this work; that, one, we need private sector advice when looking at policy issues, as well as some of the regulatory issues that might come up, and that might involve areas like carbon capture and sequestration. It could involve areas like smart grids and other issues. And at the same time, on the more research and technology related issues in which maybe groundbreaking work will take place, obviously, that can’t be deployed ultimately without the private sector.

We will work – certainly work with the Transatlantic Business Dialogue, although not exclusively, although they’re clearly an organization that I think can provide some good, sound advice, and that each – and that the working groups that are working –that are dealing with the issues that I referred to, they will, as necessary, bring in the private sector. And so, they’re definitely – they’re going to have to be a part of it, and should be a part of it.

OPERATOR: Okay. Thank you. Next question we have is Oleg Zelenis. Your line is open.

QUESTION: Yeah, hi. I’d like to ask you a question. How do you see the role of Russia in the new U.S.-EU energy dialogue? Thank you.

AMBASSADOR MORNINGSTAR: That’s a good question. What – and just what is your name again and your affiliation?

QUESTION: It’s Oleg Zelenis from ITAR-TASS.

AMBASSADOR MORNINGSTAR: Well, certainly, nothing that we’re going to be doing with respect to the U.S. energy – U.S.-EU Energy Council will have any kind of – will have no negative effect whatsoever in what we’re trying to do with Russia. And in fact, hopefully, it’ll have a very positive effect, because where the United States is working with Russia with respect to an energy dialogue – and that’s part of the new presidential Binational Commission that has been set up by President Obama and President Medvedev – there is an energy working group that will be part of that. In fact, the Secretary of State talked about that when she was in Russia two weeks ago – or three weeks ago, whenever it was.

The European Union has its own discussions with Russia. Obviously, Russia is a major energy partner with Europe. There are opportunities. We have not discussed them yet, but there clearly will be opportunities for the U.S. and Europe and the European Union perhaps to work together with Russia on certain issues.

I want to emphasize that we are seeking engagement with Russia on energy issues, that we want to work together on issues where we can agree, such as the environment, such as efficiency issues. We’re looking at investment issues on both sides of the ocean and market access issues. When we don’t agree on things, we want to talk about them openly and candidly so that we don’t distort each other’s views, and look for rational solutions so that we are – we want very much to have a very constructive dialogue with Russia.

I’ve had two very good meetings with Energy Minister Shmatko over the last several months, and we look forward to that dialogue, and I think the U.S.-European Union dialogue should actually – will ultimately help with respect to the dialogue with Russia.

OPERATOR: Thank you. Next question, Herman Wang. Your line is open.

QUESTION: Hello, gentlemen. My name is Herman Wang. I’m with Platts Inside Energy, and I just had a question about the current climate change or the carbon cap talks that are going on in Congress right now, and I know they’re pretty deadlocked right now. How much will the U.S.’s work with this new U.S.-EU council be hampered if the Senate and Congress, as a whole, fails to come to some sort of incentives and pass a bill on carbon caps?

AMBASSADOR MORNINGSTAR: Well, I am not the person to be answering that question because I am not involved at all in the legislation, and we are certainly – this – the issue is certainly going to be on the agenda with Europe, but I can’t say what the effect will be on – with respect to the legislation and whether it passes, doesn’t pass, or whatever. I don’t know, Ian, if you want to make any comment on it.

MR. KELLY: We don’t have a view on that right now.


OPERATOR: Okay, thank you. Next question, David Ivanovich, your line is open.

QUESTION: Ambassador, thanks for taking my call. Can you give us a little more specifics about what aspects of the markets the council might be looking at and what aspects of regulation you’re talking about?

AMBASSADOR MORNINGSTAR: Yeah, and you’re with?

QUESTION: I’m sorry, Argus Media.

AMBASSADOR MORNINGSTAR: Yeah. Well, the working group – there are two working groups that will be – well, actually, all three working groups to some extent are – will be working with markets, but probably – I guess I would say it may be different stages of the development of markets. And the research and technology area will be looking at earlier stages; what are the kinds of things that they can be looking at.

Secretary Chu, for example, at the meeting this morning, talked about how important it is to get the most important minds on both sides of the ocean to look at really cutting-edge issues. An example – and I’m a little bit reluctant to give specific examples because nothing has been set in stone as to what might actually be looked at. But as an example, the – finding the best people to work on liquid metal batteries was something that came up this morning. Again, whether that’ll ultimately become a priority item, I don’t know, but it was just brainstorming as the kind of thing that can be talked about.

Then when you get into things like energy policy, and we really – I mean, that would get more into issues of how do we – what – how do we work with new areas and how do we set up a regulatory framework with respect to new areas, and how can we learn from each other and set up, upfront, best practices and regulatory frameworks that may be compatible. The carbon capture issue was one that was talked about as an example. Electric vehicles was another topic that came up as – again, as a possible example. Again, don’t hold us to that those are going to be the two top areas that are going to be worked on, but there again, just two examples of the kinds of things that were discussed this morning.

The third group which will be looking at issues relating to energy markets and security – energy security and markets will be looking at questions that – as to – that you’re all well – many of you are well aware of – diversification of roots, diversification of supplies, but also looking at how we can develop more transparent, stable, nondiscriminatory markets, how we can best promote transparency, competition, open markets in third countries, for example. And so we’ll be working a lot in that area – in those areas as well.

I talked earlier about some of the other issues that we may get into like smart grids. We could go on and on with examples. The working groups will determine over the next weeks – each working group will have a specific work plan, and then we’ll take action and then report back to the council at the ministerial level.

QUESTION: May I follow up?


QUESTION: Yeah, can --

AMBASSADOR MORNINGSTAR: I’m not sure I’ll be able to answer, but I’ll take your follow-up.

QUESTION: (Laughter.) Well, how will we find out – how will we know what the working groups ultimately decide to do? Will we be informed of that, or is there a way we can keep track of this?

AMBASSADOR MORNINGSTAR: Well, we don’t have a specific methodology to keep track of it, but there’s nothing that will be nontransparent about what’s happening. Certainly, the reports that will be – that will go back to the full council will be open. But you raise a good question as to how, on an ongoing basis, can we keep people informed. And that’s – we haven’t – we really haven’t thought that through, but again, there’s nothing nontransparent. And we will definitely think of some way that we can keep people informed. And we’re always open to your calls and questions.

QUESTION: Good. Thanks very much.

OPERATOR: Thank you. Next question, Corine Lesnes, your line is open.

QUESTION: Hi. I have a question about nuclear energy. This is Corine from LeMonde newspaper. How do you deal with nuclear energy with knowing that European countries have very different policies on that?

AMBASSADOR MORNINGSTAR: Well, you answered the question. (Laughter.) European countries have different policies. Nuclear power in general is going to be – I’m sure will end up being, to some extent, part of the energy answer over the next – over the coming 10 to 20 years, and – but each member state within Europe is going to have to make their own determinations as to making use of nuclear energy. And just as we have our issues here, some countries have their issues there. So, I mean, nuclear power will be part of the equation, and it’s going to depend on the country.

OPERATOR: All right, thank you. Once again, for questions, press *1, please.

AMBASSADOR MORNINGSTAR: Before the next question, let me just – my colleague, Jonathan Kessler here, who has been working hard on these issues, pointed out that for more information, more specific information, you can refer to the summit declaration, which is on the White House website and the Swedish presidency website, as well as the annex to that declaration. There is an annex specifically on the energy council, and you can find out some additional details by looking at that.

And so if there are any other questions?

OPERATOR: Thank you. At this time, we’re showing no questions. As a reminder, press *1, please. (No response.) Thank you. We’re showing no questions at this time.

AMBASSADOR MORNINGSTAR: Okay. Well, thank you very much. Ian, do you have any --

MR. KELLY: No, just thank you all for participating, and just to remind you, this was on the record with Ambassador Richard Morningstar.


MR. KELLY: Thank you.

OPERATOR: Thank you for joining today’s conference. You may disconnect. Have a great day.

PRN: 2009/1099

[This is a mobile copy of Briefing on U.S.-EU Energy Council]