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Nicosia, Cyprus and Chania, Crete

Over the past decade, major offshore natural gas finds in Egyptian, Israeli, and Cypriot waters have fueled an ongoing debate over how to get that gas to market. Fixed midstream assets and pipes will be key to getting the gas out of the region, and various export routes present their own challenges. Recent political developments in Cyprus and subsequent Turkish military deployments in the region following the collapse of the country’s unification talks are narrowing options.

Competing export routes to move offshore natural gas north via Cyprus to Turkey, south to Egypt, and inland to Israel, have been considered. More expensive options such as capital-intensive floating liquefied natural gas (FLNG) facilities and longer subsea pipelines offer their own prospects. In April 2017, European and Israeli ministers expressed their support for the Eastern Mediterranean (EastMed) Gas Pipeline via Crete to bring gas directly to the European continent while bypassing Turkey and avoiding liquefaction. The arguments for each of these options are to some extent political, and the reach of those politics extends to Russia, the Levant, North Africa, and beyond.

Business cases are rooted firmly in project economics, and lofty political ambition is certainly insufficient to start breaking ground. Even in the boardroom though, economic risk evaluations over the project life cycle impact the final analysis, and political uncertainty can sour the case for otherwise viable projects.    
A consensus is emerging among Washington experts that the current draft legislation in the US Congress to expand sanctions against Russia should—and could—be refined to avoid a number of potential unintended consequences.

In a panel discussion at the Atlantic Council on July 19, Daniel Fried, who as the State Department’s coordinator for sanctions policy in the Obama administration led the US sanctions effort against Russia, argued: “I think the legislation is more or less a good thing. If I could, I would make modifications based in part on some of the observations I’ve heard from Americans and observations from the European Union. And I think there is more than enough room in this bill to do what the drafters and what the sponsors intended without weakening it, but also taking care of what I consider some legitimate, if rhetorically exaggerated, European concerns.”

The sanctions as written would have negative implications for US companies operating overseas, and for energy sector jobs at home, according to the panel’s participants, including Richard L. Morningstar, a former US ambassador to the European Union (EU) and special envoy for Eurasian energy, and Daniel Yergin, an energy expert and vice chairman of IHS Markit.
The Shanghai Cooperation Organization (SCO) summit and Expo 2017 hosted in the Kazakh capital Astana in June served to highlight important regional trends to which US policy makers should play close attention.
News coming out of the G20 Summit in Hamburg, Germany, on July 7 and 8 focused on the predictable and predetermined US refusal to join the consensus on the Paris Agreement. Beyond the headlines, the more important takeaways may be that the US position actually strengthened international climate consensus, the international position on the role of natural gas in energy transition is maturing, and the contours of a US policy on energy and climate have begun to emerge. 

These three reflections are worth considering.
Rising sea levels, extreme weather patterns, and other examples of our warming climate pose life-altering threats to communities around the world. Ninety-seven percent of scientists have concluded that the climate is indeed warming—and that humans are playing a role.

John Macomber, a former president of the Export-Import Bank, puts it more bluntly, calling climate change “so evident that only a few diehards dispute that something major is staring us in the face.” The question is not whether the climate is changing, but how to address it.

To curb the effects of climate change, reducing carbon dioxide (CO2) emissions is key. As the world’s second-largest emitter (just behind China), the United States must significantly reduce its emissions if it is to contribute to and even lead the way in the global fight against climate change. The Obama administration sought to tackle this challenge on the international and domestic fronts with the Paris Agreement and the Clean Power Plan (CPP). However, US President Donald J. Trump has announced that the United States will withdraw from the Paris Agreement, while the CPP faces significant challenges from the courts and the Trump administration.

Former US officials criticize Trump’s decision to quit Paris climate deal

While US President Donald J. Trump predicated his withdrawal from the Paris Climate Accord on the protection and restoration of US coal jobs, clean energy technology is not only the most effective, but an essential path toward improving the economy and fighting climate change, according to former US energy and environment officials.

“We’re not going back from a low-carbon future,” Ernest Moniz, who served as US secretary of energy under former US President Barack Obama, said at the Atlantic Council’s Tipping Points conference on June 21-22, hosted by the Millennium Leadership Program. “The clean energy global economy is going to be a multi-trillion-dollar economy,” he added.

“We have shown that you can have a clean and green environment, make environmental progress, and have our economy grow,” said Christine Todd Whitman, who served as Environmental Protection Agency administrator in the administration of former US President George W. Bush.
Even as US President Donald J. Trump touts the creation of coal jobs, 2016 energy trends indicate a sharp decline in the demand for coal worldwide, according to Spencer Dale, group chief economist at BP.

Overall, according to Dale, these energy trends also indicate a plateau in carbon emissions. In fact, he added, despite Trump’s decision to withdraw the United States from the Paris Climate Accord—a pact aimed at reducing global greenhouse gas emissions—carbon emissions will steadily decrease thanks to strides made in the developing world toward renewable energy technologies.

The United States’ role in Paris was primarily one of leadership, “galvanizing the international community and bringing them to the table,” said Dale. While Washington’s decision to back away from that role will not have a major impact on the fight against climate change in terms of percentages of global greenhouse gas emissions, it could hinder the momentum of other signatories to the agreement, he said. 
US President Donald J. Trump’s decision to withdraw from the Paris climate agreement is in line with his past denials of the reality of climate change, which he has called an “expensive hoax.” His decision, however, will have grave consequences for the United States.

Supported by Environmental Protection Agency (EPA) Administrator Scott Pruitt, Trump has made clear his intention to scrap former US President Barack Obama’s greenhouse-gas-emissions-reduction targets and to dismantle the Clean Power Plan. Moreover, Trump and Pruitt have also declared that the United States will renege on its $3-billion pledge to the Green Climate Fund. 

The Trump administration appears to have few qualms about the potential for increased CO2 and methane emissions from coal and natural gas production. It believes these sectors create jobs and are important to its political base. Rather than try to marry political priorities with climate commitments, the Trump administration has rejected any emissions-reduction targets and put its faith in private sector technology innovation to continue to produce the substantial emissions reductions we have seen as a result of the substitution of shale gas for coal.
“America First” went from slogan to reality this week. On June 1, US President Donald J. Trump moved to fulfill a campaign promise to extricate the United States from the Paris climate agreement, a landmark accord designed to mitigate the harmful effects of climate change.

The decision came just days after European allies, members of the G7, and even the Pope urged Trump to stay in the agreement. They were not alone in their efforts—US companies from GE to Exxon Mobil to Microsoft to Google called on the president to stay in the Paris deal, to no avail.

This is not the first time that the United States has walked away from a previously-made climate commitment. However, in the years since former President George W. Bush rejected the 2001 Kyoto treaty on global warming, the global momentum for climate action has grown, as has US climate leadership. Washington was instrumental in forging the Paris Agreement, and, with the leadership of former President Barack Obama, convinced many allies of the sincerity of its global engagement and (re-)commitment to multilateralism.

Against this backdrop, Trump’s announcement of the US departure from the agreement is all the more jarring—and all the more difficult to swallow. The nature and manner of the decision, coming on the heels of social media hype, teaser tweets, and a fraught conclusion to the G7 where the United States acted as a stumbling block to reaching shared language on climate, point to the potential for more serious diplomatic repercussions.  
US President Donald J. Trump’s decision to take the United States out of a global agreement that seeks to limit the damage caused by climate change is “shortsighted and reckless,” a “huge mistake,” and cedes US energy leadership to China and Europe, according to Atlantic Council analysts.

“The president’s decision to withdraw from Paris is a huge mistake. There is no upside,” said Richard Morningstar, founding director and chairman of the Atlantic Council’s Global Energy Center. 

“This decision will make it more difficult to work with our friends and allies on a whole host of critical foreign policy and national security issues. It will make it more difficult for our companies to work in many countries,” he added.

Trump announced his decision at the White House on June 1.


    

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