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JOHN HERBST: Good afternoon. It’s on. Thank you for coming today to the Atlantic Council. The United States and Europe share a fundamental interest in the free movement of energy to world markets. By and large, the West has pursued this interest in Eurasia since the fall of the Soviet Union 25 years ago, but not always. The promotion of multiple pipelines, the EU’s energy charter were clear examples of this pursuit. But the occasional reluctance of the EU to actually enforce the energy charter, and the consideration and implementation of such projects as Nord Stream and South Stream are indications of something else.

The Black Sea is a critical theater in the playing out of Western energy policy. The situation in the Black Sea is fluid. Since Moscow’s seizure of Crimea and militarization of the Peninsula, tensions have risen in the area. Moscow’s intervention in Syria, frequent violations of Turkish airspace, and the Turkish shoot down of the Russian war plane last year have likewise heightened regional tensions. And of course, in the same period and before, we’ve witnessed the spectacular collapse in oil prices over the past 18 months. All of these developments call for reassessments of the West’s energy strategy in the Black Sea basin.

Today, the Atlantic Council is delighted to provide that very reassessment. Dr. Ariel Cohen will present a paper that he has recently concluded on developing a new Western energy strategy for the region. Dr. Cohen is, of course, an eminent thinker on Eurasia and energy matters. To complement him, we have assembled a strong panel. Mr. Steve Nicandros, the CEO of Frontera Resources knows more about hydrocarbons in the Caucasus, Ukraine and Moldova than perhaps any person on the face of the planet. Dr. Agnia Grigas is another distinguished scholar on Russia, the Baltic States, and energy. And I am pleased to wave at you her new book, “Beyond Crimea” which will be forthcoming literally in days.

We have on hand also the ambassador from Azerbaijan, Elin Suleymanov, who I can tell you from several conversations with is one of the savviest diplomats in town. And we also have the Turkish DCM, Tugay Tuncer, with whom I just had a very interesting conversation, who also concedes nothing in the area of savvy.

This event is taking place under the banner of the Eurasian Energy Futures Program, which is led by my very able colleague, David Koranyi. David will moderate this discussion after Ariel presents his findings. You have the bios on all the speakers so I will not waste your time rehashing them. Thank you very much.

DAVID KORANYI: So, good afternoon to everyone. My name is David Koranyi. Welcome to this event. As John mentioned, this is part of the Eurasian Energy Futures Initiative, which is a joint initiative between the Global Energy Center of the Atlantic Council and the Dinu Patriciu Eurasia Center. And we do programming throughout the course of the year on critical European and Eurasian energy security challenges, all leading up to our big flagship event in the region itself, in Istanbul, every November called the Energy and Economic Summit in Istanbul.

And indeed, this report we’re about to present here today was actually launched there first, in November. Ariel’s paper was extensively discussed at the summit this past November, the 2015 November. And it’s also part of a larger body of work we do here at the Atlantic Council on the Black Sea region, which we consider to be one of the critical regions where security and political and energy issues are so deeply intertwined. Indeed, our Brent Scowcroft Center also runs a Black Sea – greater Black Sea security program as well. So we do all the programming in conjunction with them as well.

So this I expect to be a very timely conversation. We have many issues on the table. John already alluded to the very heated conversations on Nord Stream and European national gas diversification strategy in Brussels and in the capitals these days. We are about to have the European Commission publish its so-called Winter Package in the context of the European Energy Union discussions, and we will see what that will look like. We express some progress in the Gazprom investigation in 2016. And finally, being here in Washington, D.C., we are about to witness the first major gas quantities, LNG quantities, from the U.S. coming out later this year.

The format will be, as we usually do these things, Ariel will present his paper in about seven, eight minutes, and then I will turn to each and every of the panelists to talk a bit about the Black Sea wider region European, Eurasian implications. I will then follow up with a couple of questions on my side, and I will throw the floor open afterwards. For those of you who tweet, we have two hashtags for you. One is #ACGlobalEnergy and the other one is #ACEnergy. And without further ado, let me now turn to you, Ariel.

ARIEL COHEN: Thank you, David. Thank you all very much for coming. And it is a great pleasure to be here at the Atlantic Council and to address one of my favorite topics – actually, several of my favorite topics, one of them being the Black Sea. This is where I’m originally from. Secondly, this being energy. And the challenge of talking about the Black Sea and energy is the multidisciplinary, the multidimensional nature of the challenge. To me, when I started studying it and addressing it, is a layer of security, a layer of hard security, including military.

After the war in Ukraine, the massive Russian deployment of military force in the Crimea, for someone like myself who grew up in the Crimea and learned Russian history all his life, this is a flashing red light because every time the Russian military power concentrates on the Crimea, they start projecting it into the Mediterranean – well, first in the Black Sea, so our Turkish friends need to start worrying about that – and then into the Mediterranean, and then into the blue water oceans – be it the Indian Ocean via the Suez Canal or through Gibraltar into the Atlantic. They’ve been doing it for only 250 years, give or take.

Secondly, the challenge of Europe’s dependence on Russian gas, and Russia using gas as an instrument of foreign policy, to put it mildly – or to put it roughly, maybe somebody will not agree with me on that, weaponizing gas. There’s across the Russian studies now a body of knowledge about weaponizing information, weaponizing corruption, weaponizing foreign policy and weaponizing natural gas.

Why I am saying that? One of the findings in this paper is looking at different countries that are very dependent on imports of Russian gas, and in the diminishing order: Armenia, Belarus, Bulgaria, Estonia, Finland, Latvia, Lithuania is still there as 100 percent. Of course, now with the independence terminal it is less. This was an earlier graph. And then dependent but not 100 percent dependent – they’re still very dependent – Czech Republic, Bosnia-Herzegovina, Ukraine, Slovakia, Turkey, Slovenia, Greece, et cetera.

What are we looking at? We’re looking at countries that are very dependent and follow the Russian foreign policy diktat, like Armenia and Belarus, members of the Eurasian Economic Union; and countries that are very dependent but do not follow the Russian policy diktat, like Bulgaria, Latvia, Lithuanian, et cetera. And guess what? Their price is considerably higher than the price of Armenia and Belarus. So if you want cheap gas, you accommodate Moscow. If you don’t want cheap gas and want to be independent, well, you pay that premium. The solution is to have multiple sources of geographic supply, one – multiple sources of geographic supply.

Two, improved distribution. There’s plenty of gas sloshing around, but if you don’t have a pipeline bringing that gas to you, you are in trouble. And southeastern and southern Europe is at a particular disadvantage. Increasingly, northern and even central northern Europe has access either to LNG terminals or to interconnectors that improve the situation. A country like Czech Republic gets gas from Russia, but also can get gas from the West. Poland got the Swinoujscie LNG terminal, Lithuanian I mentioned already, Slovakia gets an interconnect that it can even push some gas into Ukraine. Ideally, countries like Bulgaria, Romania, the Balkan countries, Greece, will get gas from multiple sources – ditto Turkey.

And let’s now look around, probably going clockwise, and see where this gas can come from. And it’s in the report. You have the report. The report is also available on the Atlantic Council website. The alternative sources of gas are, first and foremost, are coming from the Caspian. And that is Azerbaijan with a shot at the knees development, and a pipeline called TANAP, trans-Anatolian pipeline, that is starting from the Georgian border into Turkey, and then its extension into Albania – or, Greece, Albania and Italy, called TAP, T-A-P, Trans-Adriatic Pipeline. The overall capacity at the initial stage is only 16 billion cubic meters. Comparing with the Russian overall exports of 160, it’s only 10 percent. It’s not such a big deal.

But Russia is taking measures to stop TANAP. They’re not saying they’re trying to stop TANAP, but the initial South Stream project was aimed at providing a massive amount of gas, 63 billion cubic meters, initially from Russia along the Black Sea, making landfall in Bulgaria, and then taking it to Romania and into Europe. Because of the efforts by the European Union, in December 14 Mr. Putin cancelled it. And the Russians had this brilliant idea of taking this pipeline instead of west-south to Turkey, and that was called the Turkish Stream. Then, soon enough, they said, well, it’s not going to be the full 63 bcm. It’s going to be half of that.

And then, as all hell broke loose in Syria, and as the Russians violated the Syrian airspace repeatedly and then lost a Sukhoi plane there, it escalated really, in my view, out of my control. And the Russians said they’re not going to do Turkish Stream. They’re still providing a lot of gas to Turkey through a trans-Black Sea pipeline called Blue Stream. So at this point, the only pipeline project that is actually being built – bricks, mortars, pipes, whatever – is TAP-TANAP – TANAP-TAP. It has a capacity to be expanded up to 30, 30-plus bcm, if you put additional compressor stations there. But it is still not all the gas that can reach Turkey and Europe from alternative sources.

You have gas in Northern Iraq, in Kurdish areas. You have a lot of gas offshore in eastern Med. That is the really big energy discovery of 2015 called Zohr, Z-O-H-R. It is Israel Leviathan smaller Tamar – and another Tamar-size recent discovery. Altogether, in my estimate, something like 400 maybe to 500 trillion cubic meters. Then you have, of course, LNG. You have Algeria. You have Egypt pipelines and LNG facilities that can liquefy eastern Med. You have Algeria that can push a lot of gas in Europe. And then, of course, Europe is subject to imports of a lot of LNG.

And the big player in the horizon of 10 years is Iran. What is going to happen to the second-largest reserves of gas? We don’t know, because gas is very cheap. As David mentioned, U.S. starts to export gas. Qataris, a huge exporter, do not want to lose their market share. Omanis and others, Nigeria, Angola and their supply offshore, Eastern Africa, Mozambique, et cetera. There’s a lot of gas. The question is, how you compete, how you diversify, and how you improve the supply. And probably the last point, and there’s other issues I discuss in the report including coal and alternatives. We don’t have time for that.

But for the supply of southern Europe and southeastern Europe, you need several things. You need an east-west corridor, starting in Slovakia, going all the way down through Hungary, Romania, into Bulgaria and the Balkans. That’s one. So that the western European gas and gas that is pushed into Europe from the Baltic Sea can reach all the way down just in case. The Krk Island – K-R-K, no vowels – the floating terminal proposed offshore Croatia, is a small but significant player in that equation to push gas into the Balkans. And the Greece-Bulgaria interconnector, also very important to diversify supply of Bulgaria.

Once you address all that, and once the Azari gas, possibly eastern Mediterranean gas, possibly 2 bcm, maybe three, four, from northern Iraq start reaching Turkey and going further, and sooner or later certain amounts from Iran, then you create a whole new level playing field in Europe, including for Gazprom. And then Gazprom becomes what it should be, a corporation not a branch of the Russian government. And that, ladies and gentlemen, will be the 21st century version of the 1990s slogan of happiness is multiple pipelines. Thank you.

MR. KORANYI: Thank you. Thank you, Ariel, for this very succinct and sharp summary of your paper. You mentioned Azerbaijan, which is obviously not a Black Sea country, but which has a major role to play in regional and, indeed, European energy security. So let me now turn to Ambassador Suleymanov to ask you about, first of all, the state of play of the southern gas corridor. Ariel mentioned that we are talking about 16 bcm of gas from Shah Deniz but he also alluded to additional quantities coming from the Caspian further down the line. So if you could talk about not only the initial 10 plus 6 bcm going to Turkey and Europe, but also additional fields in Azerbaijan, Caspian offshore, that would be very, very interesting.

AMBASSADOR ELIN SULEYMANOV: Well, thank you, David. First of all, I want to congratulate Dr. Cohen on his very interesting report, and thank the Atlantic Council for the kind invitation. And of course, I would like to thank and congratulate Frontera Resources on the good news. I think you’ll be speaking about that in more detail. But some very interesting news that you shared earlier.

First, let me say about the report that I fully agree with the two major points in the report, that diversity of supply is definitely security of supply. That’s what we are looking for. And of course, that the southern corridor is the underpinning and a main project at this moment, which is voting and being built, and that the needs for interconnectors in the Balkan region and the Black Sea region, which are very important to build to expand the infrastructure.

I will take a little bit of an issue with something else. I would say that, first of all, the issue of European markets, it’s not – it’s not the amount of supply. It’s not the volume of gas which is available. I mean, yes, you said U.S. begins exporting LNG and others. It matters not now much gas you get, it matters the security and the uninterruptable supply of gas. I mean, that’s the most important issue. Security of supply is perhaps more important than the volume set. So that’s important to understand, because otherwise the picture looks too oversimplified.

The other thing is that Azerbaijani approach – the Azerbaijani approach has never been anti-Gazprom or in an effort to replace the Russian gas. Azerbaijani approach to European energy security and diversity is not anti-somebody, it is actually pro-European – pro-European energy security. And we know we’re not going to replace the Russian gas, but to understand that the more supply – the more secure supply, the more diverse of the European supplies would basically mean good things for all us, including Gazprom, who is also competing on the market, of course.

Now, you mentioned the southern gas corridor. The southern gas corridor is a unique project. You understand that it’s about a $45 billion project, spans over six and possibly seven countries, if we include Bulgaria. We talk about 11 companies involved, six or seven very, very independently minded governments. So keep in mind, it’s not easy. So success of that project has been extremely telling on how much political will is there. So it’s not just energy supply. It’s not just hydrocarbons. It’s not just the pipes. It’s also the political commitment, which is a fundamental reason for this ongoing success.

In September of 2014, 20 years after the deal of the century was signed on the oil supplies from Azerbaijan, Azerbaijani – Baku hosted the groundbreaking ceremony for the southern gas corridor. The groundbreaking for TANAP happened later on in Selim, in Turkey. And we’re expecting a very important political group, which is the south corridor – gas corridor ministerial group to meet in Azerbaijan later – what, is it February today – later this month, actually, at the end of this month. I’m still thinking in January terms.

So the progress is ongoing. The Shah Deniz 2 project has already moved forward, about 50 percent completed today. The minister of energy declared that. The construction of the pipelines, both in Georgia, which is an expansion of the South Caucasus Pipeline. The southern gas corridor is three pipelines, actually – the South Caucasus Pipeline, TANAP Trans-Anatolian, and TAP, which is Trans-Adriatic. On all of them, the construction’s ahead of schedule, in fact with some budgetary savings, due to the changing supply situation. So I think the situation looks very good.

And then I want to say something else. It builds on the reliability and established progress we achieved before. And DCM Tuncer would remember that, when we both worked here at the embassy. And I remember both Mehmuka (ph) and Dato (ph) were here as well. We talked about this when we first worked on that Baku-Tbilisi-Ceyhan pipeline. And it looked such a remote project, people said, how can it happen? It exceeded all our expectations. And the reason was because of the commitment of both the government and, I have to say, our partners in energy – in energy commitment. I mean, today we talked with you, Mr. Nicandros, about Frontera Resources. I want to emphasize that we have established a very long-standing, very positive relationship with BP, who has been a very reliable partner with us in the region in building all those pipelines.

So I, however, do not want to focus alone, as you said, on the 16 bcm because, for instance, just recently both Azerbaijan and BP have entered an agreement on developing Shah Deniz 3, stage 3, which basically would expand that. There are also – when we talk about 16 bcm, we forget that there was also Shah Deniz 1 project, which keeps producing. It’s about 6 bcm. And those, of course – they, of course, would meet – (inaudible) – and others, not to mentioned additional supplies. And Mr. Nicandros will mention them as well. So we are talking about a sufficient supply of gas in time of years, and in that idea I want to touch on something else.

When we talk about Black Sea, Eastern European region, one of the biggest challenges we have – we have two challenges. One, in order to produce and sell gas, you have to make sure that people buy gas. Second, as Dr. Cohen mentioned, you have to make sure that there’s infrastructure. Interconnectors are of utmost importance. With building incrementally interconnectors within eastern and Black – Eastern European and Black Sea region, we should be able to build the infrastructure which makes it possible.

Now, this also brings to another question. In so doing, you build markets. I mean, markets for gas are now self-limited. And when people say, you know, would they buy more gas would they not buy more gas, the question is that they have a limited supply because of the technical infrastructure. So if there is not enough infrastructure of interconnectors, how can they buy more gas? So what this project does – southern gas corridor also continues to build in gas markets in Eastern Europe, expanding European markets to make them more gas – and it’s important because even Dr. Cohen mentioned, for instance, the use of coal, which is an extremely polluting product. So if you think about it, at this moment using natural gas is perhaps the best option in terms of the environment.

So this is where we are today. We’re very hopeful and looking very positive. Azerbaijan will continue building on success. What is also important is that the projects we’ve built, be it Baku-Tbilisi-Ceyhan and now developing the southern gas corridor are not limited to energy. We are talking about what we call New Silk Road, which will connect to transportation, air traffic, of course of the auto traffic – automobile traffic.

But most importantly now the railway between Azerbaijan and European railway system, going through Baku basically cuts through Turkey and connects with the Turkish system. And now that the Turks have the Marmaray, the tunnel the Bosphorus, it opens. In fact, the new – just yesterday, I think, two days ago, first train – test train from Ukraine to China went through Azerbaijan into Kazakhstan. And we hope that it will reach China soon. So that shows the new opportunities in the region.

MR. KORANYI: Thank you, Ambassador. Let me just ask one follow-up question. You mentioned many of the challenges, difficulties, complexities surrounding the southern gas corridor. Given the oil price environment and given the financial difficulties all major producers, including Azerbaijan, face in this current environment, does that have an impact on how the southern gas corridor or its timeline will develop, or it’s not connected?

AMB. SULEYMANOV: That’s a very good question. As we talked about, the lesson of the southern gas corridor is that you have to have political commitment, financial commitment, from both governments and the companies. Thankfully, the gas from the southern gas corridor, the 16 bcm we talked about, has already been sold to nine companies for 20 years ahead. I mean, that’s – very often when we’re talking about we have a gas line here, we have a gas line there, we have to understand that we’re talking – it’s sort of simple, you have to build infrastructure. But you also have to have a commitment for years and years ahead. So for 20, 25 years from now, most of the gas and all of the gas for the southern gas corridor has been built. In fact, that’s how we finance the project itself.

So I can assure you that now regardless of the oil prices, which go up and down, as has happened before, Azerbaijani side and its other partners we believe are fully committed to completing the southern gas corridor under any price of oil. And speaking about this, going back, again, I want to remind you that when we began building the – talking about major investments in the Caspian in 1994, and then building the Baku-Tbilisi-Ceyhan, I think the price of oil was around $25 dollars. So this is not a new development. You have to have a long view.

MR. KORANYI: Thank you, Ambassador. Let me turn to Tugay now to continue discussing the southern gas corridor from a Turkish perspective. And obviously Turkey is a critical country, as the major transit hub, but also as a major consumer of that gas. And TANAP, as the ambassador and Ariel both mentioned, will go through Turkish territory. So if you could give us an update on your end how you see the southern gas corridor progressing. But also, if you could talk a bit about the Turkish energy security and diversification strategy, in light of recent developments, especially in light of the tensions between Russia and Turkey, that Russia – that is still supplying more than 50 percent of Turkish gas supplies.

TUGAY TUNCER: Thank you, David. I’m actually – we also heard recently the findings, actually, of Frontera in Georgia. And it’s – this is also good news. And it will definitely bring new opportunities to the region and beyond. I think Turkish must be doing something wrong, because everybody around Turkey finds something really sizable, findings of oil and gas, except Turkey. (Laughter.) So we are digging all around Turkey, but nothing commercial has been discovered yet for the last 15, 20 years.

Turkey, as David mentioned, we are both a transit county and we are becoming an increasing transit country, as well as a market – a market of energy. Our market is growing, unlike the European markets. Currently Turkey meets only around 30 percent of its energy needs from its own resources. The rest of its energy demand is met through imports. Currently, Russia accounts for more than half, around 55 percent of the gas that Turkey imports, which is around 30 bcm annually.

Azerbaijan supplies 6.6 bcm annually from the Shah Deniz phase one. And this will go up to 12.6 bcm once production starts in Shah Deniz phase two. In addition, Turkey purchases 10 bcm a year annually from Iran, and some LNG from Algeria and Nigeria. That’s the general picture regarding Turkey, what Turkey buys. It is not as dependent as Bulgaria or some Eastern European countries, but it has, thanks to its geographical location, more opportunities for diversification.

The question regarding whether – I mean, Turkey’s policies, whether they’ve changed or not, I mean, they did not change after the Russian crisis or after the shooting down of the plane. I mean, the Turkey stream was offered to Turkey very suddenly, very unexpectedly. It was very convenient, actually, for Turkey, because Turkey’s getting gas from the western line, from Ukraine, Romania, Bulgaria, and one line across the Black Sea which we call the Blue Stream. And it was very convenient to replace the western line with directly from Russia, because the western line was not reliable in crisis situations, or heavy winter conditions. The supply there was not consistent.

But the talks never started. I mean, the project was not really a project. It never came into maturity. Even the price – I mean, the talks on the prices didn’t start. We needed to discuss and negotiate an intergovernmental agreement, first of all, to start construction of the project. I mean, none of them happened, actually. So to cancel the project, first you need a project. You need to work on it. But right now, it stands at this stage. The project is still on the table. It’s not cancelled. But it’s still not moving on as well, I mean, given the political climate between Moscow into Ankara.

When you talk about energy security of the Black Sea, we also need to talk about the straits – the Turkey straits, because a lot of energy is passing through the straits. I mean, I very much agree with Ariel on his report, but on the straits we have a very long-standing position and policy. We do not permit any LNG or CNG tankers passing through that – through the strait. This is not related to our relations with Moscow or Ukraine or anybody else. This is our own security. I mean, I was – in 2004, I attended a security briefing by Turkish law enforcement agencies and security agencies in Istanbul.

And the scenario of an LNG tanker exploding in the Bosphorus is disastrous, it’s catastrophic, for the city, for human loss, economy, environment itself. An LNG tanker, which would explode just next to the first bridge, would probably lead to 1 million deaths in Istanbul because of the fire, because of the earthquake effect that would trigger on the banks of the Bosphorus, as well as immediately after the explosion it would – probably the first bridge, if it’s very close to the bridge, the bridge would collapse.

And so things like that. And a breach, a collapse in the bridge, I mean, a collapsed bridge which would block the Bosphorus, which would block the passages from the Dardanelles and from the Bosphorus, would actually have very dire consequences on the economies of the Black Sea – Bulgaria, Romania and Georgia very much, since their economies depend on the navigation – free navigation from the Bosphorus. So that is our concern of the limitation. I mean, oil tankers can pass, although it’s very congested, we don’t have any limitation. But an LNG or CNG is not permitted. And this is strictly related to our nation’s security concerns.

We also see, with all the dropping energy prices – gas, oil, et cetera – we don’t see any mega-projects feasible, actually, in the coming years. I mean, probably the south corridor – south energy corridor will be one of the last. But mega projects like Baku-Tbilisi-Ceyhan or probably very much the Nord Stream are not feasible enough. I mean, there is not enough profits, actually, coming to the market. There is not much interest. Also, given the increase of – I mean, there is also no increase in the European energy needs. So probably with all the – with all the energy efficiency projects that the EU and the European countries will implement, there will be less demand of energy. The demand might even drop actually for the Russian gas.

So we really have to see, is there enough demand for another big pipeline coming – I mean, whatever, it is Nord Stream or the Turkey stream. But what is happening, as Ambassador Suleymanov mentioned, TANAP is real. It’s happening. It’s in the final stage. We can increase – we can increase the capacity. Ariel mentioned about some – around 30, 35 bcm that we can push up to capacity. I mean, our technical data is even further, actually. We can even exceed 50 bcm with some additional technical work. I mean, this is happening. TANAP and TAP is happening. The interconnector between Greece and Bulgaria is happening.

And I think we should concentrate really on those projects. And so would very much like to help Ukraine, but the LNG terminal in Odessa, I mean, for us, I mean, they can get maybe gas from Bulgaria – sorry – from Georgia or somewhere else, but definitely not through the Turkey straits. And another issue related to the Russian gas – I mean, the Russian – the Russians are still supplying the 30 bcm to Turkey. And they need to supply it. I mean, we are the only growing market for them. We are the second-biggest consumers of the Russian gas in the world. So it is a mutual thing. I mean, we – if they cut off the gas, it would – it would be very difficult for Turkey probably to compensate it, but it’s not impossible.

So there are other sources. We have LNG resources. We are not landlocked. We are also not in a situation like Ukraine, with some floating LNG terminals or increasing the capacity of the current LNG terminals as well. We can diversify. But on the other hand, it would have consequences for Russia, as it needs the cash, as well as weaponizing gas, or the energy is, I guess, not a smart thing in the long term. I mean, other countries, other buyers would get the message.

And what else? Just want to briefly mention the eastern Mediterranean. That is an option. We’re looking to the option. There are talks ongoing. I mean, you have big discoveries in Egypt, Israel, and some smaller sites in Cyprus. But we also see this as a part that would give more incentive to the peace talks in Cyprus. We don’t see it as a – as an energy thing. I mean, we need to cooperate all together to bring the sides in Cyprus together and to find a peace deal, to reach a peace in the peace deal for unification in Cyprus. This is going on, actually. And there are very good prospects for a peace deal in Cyprus. Probably if it happens, it will happen in the next couple of months. You will all see that. That would give incentive for the projects in the eastern Mediterranean.

The project reaching from eastern Mediterranean into Crete and further to Greece, that’s – I mean, it’s very expensive. The terrain is difficult. But if they can do it, why not? I mean, they can do it. But I think it will be one of the most difficult projects in the world. I want to sum up here – let me check if I – I don’t want to overlap. There are many things you – I mean, that had already been mentioned, Ariel mentioned. And, yeah, that’s more or less I wanted. Yeah, thank you.

MR. KORANYI: Thank you, Tugay.

Let me now turn it to Steve. You have been congratulated already on the finds. And I will ask you to talk a bit about what’s going on in Georgia, what Frontera Resources is doing, and to what extent that can be a game changer, or can be a major source of additional supply to the region, and maybe beyond to Ukraine. And maybe you’ll be able to present a more optimistic view on the Odessa LNG terminal as well, and then onwards to Europe as well.

STEVE NICANDROS: Sure. Thank you, David. It’s a pleasure to be here today with distinguished colleagues.

It’s really an exciting time for the oil and gas business around the Black Sea. And I think what the ambassador has spoken about already, that began a little more than 20 years ago, we’re seeing the continuum of the relevance of this region to providing energy security to the countries that surround the Black Sea, and then also into Eastern and Western Europe. And I have to say, I agree with you that we all have to remember that when the dream of Baku-Tbilisi-Ceyhan was had, oil prices – I remember at the time, I would pray every day for $20 a barrel. And here we are today, wringing our hands over $30 a barrel.

And my point is, is that I think what we’ve seen over the last 20 years in the region is a series of discoveries that have opened up the possibility of diversification of supply to Europe. And my company, Frontera Resources, has been working in the region for 20 years, in countries surrounding the Black Sea. And we focus primarily in the onshore basins of this area. And that’s relevant, because I think when we talk about sustainability of supply, low-cost is key to be able to endure the cycles that we’re seeing in the energy sector. And as more and more competition comes to bear, the sustainability of supply will be underwritten by the lowest cost hydrocarbons.

So when you look around the greater Black Sea region, a huge basin that extends from eastern Georgia into the south Caspian, contains centuries of energy supply for the west, for the markets that lie to the west. If we look into Eastern Europe, Ukraine, and its onshore provinces and basins, similarly holds tremendous natural resources, both in oil and in gas, sitting on the doorstep of the European consumption markets. Go further south into onshore Romania, Bulgaria, and a tremendous amount of potential that exists there that has been worked on since the beginning of the last century.

And what’s key, though, I think to the energy security of the region, is a willingness – a political willingness on the part of governments to allow the development of these natural resources, and to clear the way for the investment that’s necessary. And our business is a very capital-intensive one. And so using Azerbaijan as the example, a great incentive was laid out 20 years ago to come and take risks, and develop a huge natural resource that today now has sustained the construction of infrastructure.

And the construction of that infrastructure will continue to pay dividends in the ways that we’ve seen throughout history in the oil and gas business. The early days of the North Sea, discoveries that were made fostered construction on infrastructure, and then that allowed companies like my own, independents, to come in and risk hundreds of millions of dollars because infrastructure was already there. And that unlocked more and more resources. And you can go around the world into every major basin around the world and it’s the same story. And we’re in the early days of the greater Black Sea region. And that’s the exciting – that’s the exciting part of what we see today.

Specifically, to our work in Georgia, I think what has been interesting is that for the better part of the last 20 years, we have invested a significant amount of technical resources and financial resources into our exploration work. And in recent years, we’ve seen the discovery of a giant resource that sits about 4(00) or 500 kilometers to the west of Shah Deniz, and all the work that’s being done offshore Azerbaijan. And if you focus on the Earth science, no surprise. The Kura Basin, as we all it, is a geologic province that has been known to contain hydrocarbons for a long time, but has never really had the investment, in particular after the collapse of the Soviet Union, to really uncover that potential.

So today, much like what we’ve seen here in the United States, we’re seeing a renaissance of investment in the lower Kura valley, in Azerbaijan, and in the upper Kura valley in eastern Georgia. And our work today has seen the discovery of what we estimate to be almost 5 trillion cubic meters of gas in place in eastern Georgia, which is roughly about 180 TCF of gas. And when you think about that volume that will be coming to the market over the next decade, it is a game changer for supply. It provides additional diversification, it provides confidence in the construction of infrastructure through the region, to supply not only Turkish markets but Eastern European markets.

And I think, much like we’ve seen here in the United States, provides a market environment that will deliver for many decades to come low cost energy to European consumption markets. And low cost energy is the fuel that drives manufacturing, transportation, agriculture – just go down the list. And there’s no better stimulus to free markets and to consumers of free markets than delivering low cost energy. And I think this is what is most exciting about what’s happening as a result of our work in Georgia, and the work that’s happening around the Black Sea, in particular in the environments that we’ve been talking about.

The challenge and the risk is whether or not governments, the EU collectively, will manage a penchant for regulation and allow that cheap energy to translate to the consumer. And if that can happen, we’re seeing here in the United States today the result of that. You know, a decade ago some people probably sat on this stage talking about peak oil and now we’re going to run out of energy here in the United States, how we’re going to have to import energy to the United States. And we were building LNG import terminals. And you know, those of us inside the oil patch never really saw it that way.

But here we are today. And I filled up – I’m from Houston, Texas, surprise, surprise – and I filled up my gas-guzzling SUV for $1.49 a gallon just last week. And I say that a bit tongue in cheek because, you know, that $1.49 a gallon allows me to take that extra $1.49 that I had to pay a few years ago and stimulate the marketplace – go to dinner, buy things for my kids. It translates all the way down. And I think the same potential exists now in Europe. And the challenge, if Europe can pick it up in terms of security, is to really encourage this diversification of supply, encourage the construction of infrastructure into the region. And that is the best – that is the best security.

And as Dr. Cohen pointed out in his report, I think there are some questions about how do you protect that infrastructure, how do you provide the assurances that once these massive investments are built, what SOCAR and BP built billions of dollars of infrastructure investment in Turkey. And how do you protect that in the face of aggression, as we saw in 2008 when Russia invaded Georgia. We had bombs dropped near the facilities that we’re working on in eastern Georgia. And it makes you think, you know, as a foreign investor. We’ve invested several hundred million dollars in Georgia, nothing said about the investment that BP and SOCAR have collectively made.

So I think there – you know, there are geopolitical issues here to assure and give confidence for the huge financial risks that have to be taken by our industry. And at the same time, there are really solid industry risks that are being taken by companies like us to uncover the natural resources that are there. And so I think, you know, for the coming – the balance of this century, if you will, I think it’s a good news story coming from around the greater Black Sea region. Georgia’s going to become a net exporter of gas over the next three to five years.

And I think the interconnection projects that we’ve talked about, others have referred to, in Europe will do probably more to increase demand in Europe than decrease it. And it’ll be interesting to come back here and sit five years from now and look back, as I’ve done, on the peak oil story, and look at really how this is going to fuel a growing Europe, and hopefully provide a catalyst for, you know, greater GDP, country by country, with cheap resources.

MR. KORANYI: Thank you, Steve. And we could have a great discussion on gasoline taxation in this country and in Europe, but this is not the place to do so.

MR. NICANDROS: Yes.

MR. KORANYI: Let me turn to Agnia, last but not least, and ask her about the elephant in the room, Russia. What will be the reaction of Russia? What are some of the shifting strategies from a political and business perspective? How is Russia responding to a very different, changing European marketplace, and all these diversification efforts, actual and potential?

AGNIA GRIGAS: Absolutely. And my fellow panelists here covered a lot of ground, and I will focus my remarks on Russia’s gas exports, specifically its plans, priorities and constraints. And these, in fact, have been outlined rather clearly in the latest energy strategy – Russia’s energy strategy to 2035. But from here, I’ll take four points, so our discussion is not too long, but four points I think are particularly important as we envision how Russia will go forward, and what are some of its considerations today.

So the first aspect in the strategy is that from the very start it acknowledges the difficulties and the competition that Russia and Russian gas is facing in the global energy markets. Second aspect is it acknowledges Europe’s diversification efforts and very clearly states that it will try to hold on to these markets best it can. Three, the focus, though, is – for the future – that Russia will seek Asia-Pacific as the primary market for its gas exports. And fourth, that in fact Russia will now start looking towards LNG exports, versus historically it’s always been an exporter of piped gas.

So going a little bit through each of these – each of these points, now, from our discussion already we heard clearly the energy and gas markets have significantly shifted. Today we’re really in a buyer’s market, rather than a seller’s market. Of course, that may change somewhat in the future. But today, as we stand, you know, oil prices are dipping below $30. There’s a much greater supply, both in oil and gas, particularly from the shale boom. And I would argue that the – particularly the gas markets are experiencing a fundamental shift. They’re increasingly becoming interconnected. More and more people talk about the emergence of a global gas market. There’s greater supplies, both from shale. There’s LNG trade. And there’s greater interconnection already on the European continent.

Now, all of this means more liquidity, more competition, and more pressure on prices, and particularly on traditional pricing contracts – gas pricing contracts. And generally, this all spells rather bad news for Russian gas and Gazprom. Now, this is, again, most evident in the European markets. This is my second point, where really Gazprom is experiencing tougher times. There’s a very clear decision on the part of the European Union to diversify its energy imports, but there’s also at the same time a regulatory push – a regulatory push to increase competition and to reduce the power of energy monopolists in Europe. And we’ve seen that already from Europe’s third energy package, from initiatives like unbundling. We see it in the antitrust case against Gazprom.

And all of this together, both from the kind of regulatory and political push from a lot of European countries, is coupled with the push from large European gas importers that are putting more pressure and renegotiating contracts, pushing against traditionally oil-linked gas prices towards how hub or spot prices. Still, for the near to medium term, it’s evident that Gazprom and Russian gas still has a very strong foothold in the European markets. They have long-term contracts in place until 2030 for significant amounts of gas – I mean, about 110 bcm for the OECD countries. So while it’s tough times ahead, there’s no immediate change.

Now, looking at the Asian markets, where Russia has said this will be its focus and priority going forward, we see that those gas deals won’t be struck that easily. I mean, the most important country that Russia has been focusing on is China. And there was a gas deal struck in 2014 to build two pipelines to bring Russian gas from – well, from Russia to China. And now we’re in 2016, and there’s been little progress, there’s been some postponements, there’s actually talk if and when this will ever happen. Will those two pipelines be ever built? Well, we’ll see, but you know, they’re not laying the bricks right his minute.

At the same time, China has its own very strong and very clear gas strategy. It’s determined to have very diversified imports. And diversified both in the sense from different countries – so it’s already piping gas from Central Asia, Myanmar, it’s considering Russia, and also from LNG. Its traditional suppliers like Australia and Qatar, now there’s potential for maybe even American LNG exports. At the same time, while China’s considering diversified imports, it’s also very focused on its own domestic production, and even its own shale potential, which though today maybe hasn’t demonstrated the huge success that Beijing hopes for, it has tremendous potential in the long term.

So we see that China’s going to drive a hard bargain with Russia in the long term. And it has options. And it’s in a buyer’s market again. The same goes for some plans with South Korea and Japan. You know, those pipeline discussions have been in talks for decades. I mean, they’re even more problematic for some political reasons than the case of the China pipelines. So to date, it seems that Russia will have the most opportunity in Asia in terms of LNG exports, which brings us to our fourth point of Russia’s focus and priorities.

Now, in the LNG sector, we have to admit Russia has really been – well, has really lagged behind, and is now trying to catch up – to play catch up. Considering that it’s been one of the largest gas exporters, one of the largest gas powers, it only built its first LNG export terminal, the Sakhalin-2 in 2009. I mean, that’s quite in contrast with, let’s say, Malaysia, which opened theirs in the ’80s, Qatar in the late ’90s. So even today Sakhalin-2 has very modest liquefaction capacity, just 13 bcm. Now, there are plans for Yamal. And that may come online in 2017. But some other LNG terminals, like Vladivostok or the Baltic LNG terminals, you know, those are looking much, much more uncertain at this point.

Now, looking at this as one of the greatest – Russia’s greatest ambitions in terms of LNG exports, we can see that they are – today, as it stands, they’re quite seriously constrained by Western sanctions, by the low energy price environment, the difficulty in raising capital for these projects, and even shortage of technical – you know, technical equipment and expertise. So to sum up, you know, Russia’s gas strategy I think is increasingly admitting that it will face more competition in the markets, that it will have a tougher time, and it will need to work harder to hold on its European markets. And its plans for Asian and LNG markets, that we see that they’re – well, they may be ambitious, but at least in the short to medium term there are many constraints to fulfilling those goals. Thank you.

MR. KORANYI: Thank you, Agnia. In the interests of time, we have about 20 minutes left, I resist the temptation to ask the many questions that come to mind, and throw the floor open for the audience to those questions. If I can ask you to identify yourself and keep your question sort of short as possible, that’d be great.

Charlie, please.

Q: Charles Ebinger from Brookings.

What if we’re wrong and the next decade we’re looking at oil prices $20 to $30 a barrel, no higher? How does that affect the – at least the near to mid-term prospects for some of these big projects?

MR. KORANYI: Who wants to take on this one? Steve?

MR. NICANDROS: I think it’s a good question that, as you know, probably whenever the industry, at least, and sovereign energy companies look at planning, it’s over a long period of time. And I think, you know, what that scenario planning has traditionally shown us and what it will show us looking forward is that under that scenario the lower-cost projects are going to rule the day. You know, back to my comments about the low cost of production, on-shore production that is analogous to what has taken place here in this country, in the United States.

And so I think deep water projects will fall of the – will fall off the shelf. High cost projects like that will fall of the shelf. But I think hopefully we’ll see that the infrastructure projects – as they have been in this country through cycles of high and low prices – the infrastructure projects will continue to be very profitable, as long as they can be filled up with low-cost gas, for example, or oil.

Q: That would presumably kill Russian Arctic projects.

MR. NICANDROS: Absolutely. I think the projects that Agnia referred to, virtually all of them don’t make it that kind of an environment.

MR. KORANYI: Ariel.

MR. COHEN: Just to add to this point, first of all I think the probability of 20 to 30 (dollars) range looking, what, 10 years, 20 years out, is lower than the probability of 50 (dollars), give or take, range. Secondly, we are witnessing increasing decoupling of the gas price from the oil prices. That’s important to understand, the emergence of the global spot market, or original spot markets for gas that will be decoupled from the oil prices. And this is something it takes a very long time sink in Gazprom top management’s minds.

If I were a management consultant, which I’m not, and the Russians asked me a question about the quality of leadership in the top strata of Gazprom, the neglect of LNG and very wrong projections of oil prices would be sufficient to suggest that that generation that was appointed for political reasons, not for management reasons, back 15 years ago, when Miller replaced Viakhirev. That generation probably is no longer coping with the challenges that the Russian gas industry is facing, one, and two the monopolistic nature of that whole arrangement, when Gazprom is blocking, despite the legal obligation to open its pipelines to other producers.

That’s not working. They have to lobby all the way to the top in the Kremlin to get access to this pipeline. That is also setting back the Russian gas industry. And that’s just the beginning of the description of the problems Russia is facing in its future of gas industry.

MR. KORANYI: Agnia, you want to chime in on this issue?

MS. GRIGAS: Well, in terms of looking forward, I mean, I think we also have to consider the future of Gazprom itself. Gazprom is facing not only the challenges that I outlined externally, abroad. It’s also facing challenges domestically. It’s, you know – I mean, it has to bear the financial brunt of selling gas at a much lower – you know, below market price to the domestic audience. At the same time, there are new – well, independents and other companies that are increasingly becoming important in gas production – Rosneft, Novatek.

It’s also important to know these companies also have – they have strong political leverage. Their leadership is, today, considered closer to the Kremlin, in fact, than potentially even Gazprom, you know, in term so personal relationships. So there’s also some discussions whether maybe Gazprom will lose its monopoly on exporter markets, that maybe even a company like Rosneft potentially could start exporting as to Asia, because it already exports oil to Asia, and Gazprom hasn’t really been that successful in getting that to happen. So I think that’s another interesting area to watch, what is the actual future of Gazprom.

MR. KORANYI: And going back to the original question of Charlie, as far as I understand, the Shah Deniz two gas quantities are mixed pricing, so it’s part oil index, it’s part connected to the spot prices.

AMB. SULEYMANOV: I do not subscribe to that. It doesn’t matter, in terms of the oil prices.

MR. KORANYI: Additional questions? Sir, in the back, please.

Q: Michael Datsenko, U.S.-Ukraine Business Council.

On the demand side, does the panel think that the recent discussions on the climate change and the obligations that the EU countries, as well as other countries, took upon themselves would affect the demand for any kind of gas and oil? In Ukraine there is, for example, the drop in demand because people for political reasons are switching to solar power, powering their individual houses or their, you know, three, four apartment buildings, just not by the Russian gas.

And I would like to know if there’s kind of a growing demand for alternative energy in Turkey, which of course is much better positioned for solar power. And there’s also a lowering of demand for oil, especially when it comes to the production of fuel from oil. One of our members, a large Ukrainian gas station company, as a matter of policy, installed chargers for electric cars on all of their gas stations. And I think that’s kind of driving that.

MR. KORANYI: Thank you. As I think Ariel mentioned in his introduction, his report touches upon the renewable potential of the wider Black Sea region. It’s mainly a gas-focused report because of the obvious political insecurity connections. But nevertheless, he mentions the strategic significance and the great potential that the region has in renewables. So, Ariel, if you care to elaborate on that point?

MR. COHEN: Well, just as in the United States, but even behind the United States, Europe and especially Eastern Europe are in the very, very beginning of the renewables revolution. So they’re behind Germany. They’re behind the U.S. Ukraine does not have the same solar density as Turkey has, or Greece, or Israel. But that’s not to say there’s not a lot of solar potential. There were some solar and wind projects, by the way, in the Crimea that the Russians took over. And now the open question is how Ukraine will get compensation for that, just as there were offshore oil and gas projects offshore Crimea that it’s probably in many, many billions of dollars’ worth of assets.

And if and when that comes to either international litigation or arbitration, one, the amounts will be tremendous. And as the Yukos claim demonstrated, it is no longer impossible to get an award of $50 billion. So as someone who acted as a consultant to arbitrations and litigation in that part of the world, please come and see me when this comes up. Seriously speaking, as we’re witnessing the decline of the kilowatt cost in solar and pretty low-range but still considerably more expensive than gas, the renewables are competitive only with heavy government subsidization.

For political reasons, for environmental reasons, this subsidization there is here to stay. So there is a small but important part of the energy mix in Ukraine, Bulgaria, Romania, Turkey, et cetera, that is and will be renewable. And as the solar photovoltaic production cost drops, it will be more important.

MR. KORANYI: Please. And then here.

Q: Bob Ayecourt (ph), recently retired from the State Department, so I can be more provocative. (Laughs.)

The issues related that have clearly come out that the broader market framework is very important, as Charlie has mentioned on the oil side, but also in terms of the gas side and the supply situation that we’re seeing now, and what we’re seeing likely in the future. The IEA projects that all future energy demand to 2040 is in the non-OECD countries, that Europe declines and maybe, I don’t know, the U.S. given our industrial growth is still going to be very flat. So the question is, in the early days, when we looked at Shah Deniz oil, it was, in a sense, get it to Ceyhan and you got a global market.

So my question is really, are we looking at the wrong market with regards to looking at exports to Europe for gas? Don’t all really of the market drivers suggest that the future gas developments are going to have to compete in a broader market that’s aimed mainly at the non-OECD countries? And there, you got problems because you got Mexico, you got Mozambique, you got Myanmar, you’ve got a lot of big gas fields around the world. And hopefully yours will be big as well. So I think that that, to me, is going to be a key factor in terms of, one, how this competition for the development of these gas resources is going to play out. And don’t forget Canada in terms of Asia, as well as the U.S.

And the other aspect is, how does it relate to coal? Because if Asia’s going to account for 60 percent of global energy consumption, and coal is the dominant source for power in most of these countries, what’s going to happen to gas demand? And can it substitute for coal so that we have both climate and economic benefits? And nobody’s mentioned India, which is projected to be the largest source of growth, even outstripping China. So I think – so that’s the question, really, is in a sense, aren’t you looking at the wrong market, by looking at Europe?

MR. KORANYI: Thank you, Bob. Steve, you want to?

MR. NICANDROS: Well, I think your point’s well-taken. The subject matter of the paper was focused on Europe. (Laughs.) So that’s the first excuse. Secondly, though, I think your point’s well-taken, but I think it goes back to something I always wonder about, and that is how do – how do the governments of all the countries we’re talking about, that represent people of demand, how do they choose to react to climate change legislation, for example? And that, I think, goes to answer your question. Coal, for example, in the United States, you know, is centuries of energy for not only this country, but for the world. But as we see, regulation has, you know, worked to lock out the development of coal in favor of other things.

So I think you’re right that we’re going to see markets around the world, governments around the world, rather, influence the development of these resources significantly. And that’s the challenge, for example, on the investment side that we face. You know, if you look at it just in Europe today, and I’ll come back to Europe as an example, there’s a tremendous amount of indigenous resource available. And a lot of it on the continent, especially in Western Europe, and now parts of Eastern Europe, is being locked out because of regulations – you know, environmentally directed regulations that tend to push the development of other kinds of energy.

So I think this is where this is going to get slugged out, in the parliaments and congresses of the world. And for those of us that are producers, you know, again, the bets hedge is to work on projects that are low-cost by nature. That tends to sustain that kind of competitive market. But your point’s well-taken.

MS. GRIGAS: Well, I can expand on it a little bit more. You know, certainly the Asian markets is where the – you know, people are expecting the greatest gas demand. That’s why Russia’s looking at the Asian markets. That’s why American LNG exporters are also eyeing the Asian markets. With China in particular, as I said, their story’s complicated. They want to be well-diversified. They’ve already been successful with building pipelines to Central Asia, to Myanmar. You know, they’re in talks with Russia. We’ll see what happens. India has been less successful in that fact, I mean, in part because of the geography. I mean, some of the pipelines would have to go through politically difficult areas like Afghanistan or, you know, Bangladesh in order to reach India. So that makes it more problematic.

Also, in terms of coal, China in particular has made a, you know, clear point that it’s going to reduce its coal usage and replace it with gas. Part of this is driven also by just simply the public sentiment. I mean, the pollution has gotten so bad in China that it’s now becoming a domestic political issue with a lot of movement around that and protests. So certainly that’s going to be an area for China growth. But China will also develop its own domestic resources.

MR. KORANYI: Thank you. Please.

Q: Hi. It’s Emily Meredith from Energy Intelligence.

And my question is just, given the U.S.’s own liberalization of its oil and gas export policies in the last year or so, I was wondering if you all see any role for the U.S. in meeting Eurasian security, or if, you know, sort of logistics and supplies are going to crowd that?

MR. COHEN: A key issue for LNG – for U.S. LNG exports to Europe is price. With the prices as low as they are, we can export at Henry Hub plus three, give or take, three and a half. So as long as Henry Hub is, let’s say, three and a half plus three, six and a half, we can put it in Europe and sell it. If it goes up domestically, it will be more expensive in Europe also, in terms of competition. But I have deep faith in competitiveness of our oil and gas industry. And while there are sunk costs in place, like Qatar, for example, and they will compete on price, I still think we will be able to move some amounts of gas from the U.S. to Europe.

If the prices, for whatever reason, start to go up, it will be more challenging and probably more difficult. I was involved a couple of years ago advising a client. And at that time, it was challenging to put American gas in Europe and compete with pipe gas from Gazprom. The other thing is, let’s not forget, Gazprom may be not very agile and big and bureaucratic, but they’re not idiots. So they will compete on price. Again, their infrastructure costs are sunk already. And they will try to stave off America grabbing some European market share as hard as they can.

MR. KORANYI: Thank you, Ariel. Yeah, sure, Steve.

MR. NICANDROS: Just one thought, to build on what Ariel said. What’s really, I think, unique about our energy sector here in the States is that it’s a very dynamic, technology-drive industry. And so what we’ve seen over time is the cost of liquefaction coming down, and that technological have developed to allow for small-scale LNG to take place, for example. And you see that along the Gulf Coast of the United States today. We’re working on a project to send some of our gas from Georgia to Ukraine, utilizing small-scale LNG technology, which wasn’t around not that long ago.

And I highlight that because I think the competiveness that technology brings to driving the cost of, in this case, production of LNG makes the U.S. really well-poised to go east or west, provided terminals can be built, you know, within the current regulatory environment, to make it an impactful strategy for this country, to have that kind of an energy policy.

MR. KORANYI: Thank you, Steve. This is the perfect segue to conclude today’s event. And invite you all to an event next week, next Monday if I recall correctly, that is going to be a presentation of Bud Coote’s paper. Bud’s sitting in the back. He wrote an excellent paper on the global energy markets and the U.S. energy export scenarios and prices and whatnot. So we are presented that paper next Monday at what time? At noon. So you’re all welcome to join. And the paper is exactly about these very issues that we have started to just discuss.

So thank you all. Thank you to the audience for coming and the excellent questions. Let’s give a big around of applause. (Applause.)

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