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Speaker
Amos Hochstein
Senior Advisor to the President for Energy and Investment
Executive Office of the President
Moderator
Frederick Kempe
President and CEO, Atlantic Council
FREDERICK KEMPE: So it is such a pleasure to have this conversation with Amos, senior advisor to the president of the United States for energy and investment. I had to read it here because you’ve had so many titles since you came—and so many titles in your career, so many titles. You’re a person who’s worn a lot of hats in your—you’re one of the most impressive, resourceful, and capable public servants I know. And we’ve known each other a long time, Amos—a personal friend and former board member of the Atlantic Council.
We’ve got a packed house. People are always interested in hearing what you have to say. So I think we’ll get started.
Like a lot of people of great capability and capacity, you keep taking on more tasks and you keep—and so let’s start by talking about your relatively new job and about the importance of global connectivity for economic growth and enabling the transition to clean energy. I talked to Amos about what we could talk about and he says, well, you can ask whatever you want to ask, but I’m going to answer whatever I want to answer. And so this will be an interesting conversation.
But he’s been involved in the situation with Israel in Gaza. He was involved in the situation in Ukraine, particularly the energy elements of this, where Vladimir Putin has done a lot of harm to the world but one of the things he did was accelerate the energy transition of Europe.
But let’s get started with, first of all, talking about your role. It seems to have evolved from a focus on the security of energy and supply management toward a more holistic approach which is inclusive of energy infrastructure and economic interconnectivity. So, first of all, has this sort of job ever existed in the White House before? A little bit of history on how it came about and what you see as your primary priorities, and then we’ll get into some of the—some of the details.
AMOS HOCHSTEIN: Yeah. First, Fred, thank you, and for taking our private conversation before and broadcasting it. But—so I’ll talk about something completely different.
Look, I think I should start by the—it’s amazing to me, Landon, you said this is the eighth. It feels to me like it’s the—it’s the, you know, fifteenth. There’s just so much going on that the Atlantic Council has done, and the partnership of doing it here in UAE, in Abu Dhabi and now in Dubai, has really transformed what this event has always been. But it’s—and I’m glad that you took a minute to recognize Ambassador Dick Morningstar’s extremely productive contribution to the concept of energy security in the context of American government and diplomacy, and bringing energy into diplomacy and national security, which is not a given. And it’s flourished since then, but in—just about fifteen years ago nobody thought there should be a conversation of energy in the national security space in Washington. The rest of the world figured it out about thirty years earlier, but—and Washington didn’t get it. So I’m really grateful that you, first of all, named something after Dick Morningstar and recognized him here. I think this is probably one of the first ones that he has not attended, so I’m really grateful for you for doing that.
Look, this role, no, it has not existed before in the White House, and it demonstrates what the president—how much the president is emphasizing the holistic approach to the focus on what is our work on climate change and responding to a climate emergency. And I’ll take a minute just to say what I think that—in my mind, what I think that means.
When we want to look at—we’re here at COP, where we originally talked about things—about COP in the context of what is it communicating and what are the NDCs, what are countries agreeing to as far as what are the—setting the longer-term goal and then setting some milestones on the way to that goal so that we don’t just talk about 2050 without saying, OK, but what’s going to happen in 2030, and then 2035, and 2040. If you just leave it at 2050, it becomes a little bit pointless.
So that really was the main aspect of what COP’s about. And what it’s transformed into is looking at COP is really how do we get to that kind of a world where, now that we see that it’s possible to reach net-zero but it also suddenly dawn on us, we caught the bus, right, as far as convincing the world that this is what we have to do. Now it’s really, how do you do it? And the energy system is a really complicated system—global system that it’s not so simple to just simply unplug from one system and just say, oh, it’ll take twenty years. We’ll just—it’ll take twenty years.
It actually is really complicated. And one of the things that makes it really difficult is how do you do it across the board regardless of income level? And it’s one thing that you can do things in the United States, in the UAE, in Germany, in Denmark, in China. It’s another to do it in countries that can’t afford to do the same thing. So how do we have a holistic approach to say that the work we have to do, one, has to be across the board, two, it doesn’t have to be just focusing on deployment of renewable energy and storage?
But, rather, what are the other pieces of infrastructure that need to be built in order to enable that kind of investment? Because if you don’t have the rail, and the transmission, and the ports, and dry ports, and how to connect the cities to the rural areas—all those things have to be connected. And, by the way, if you don’t have the connectivity, the 5G, and have the telecommunication side of it so that you can use and utilize the advancement in technology that the new energy system has, if you can’t implement that in places that don’t have the digital connectivity, then you’re not going to be able to reach that goal.
So how do you look at all these pieces? And what the president has asked me to do is to say, OK, how do we bring a holistic approach? How do we bring our G7 partners together, which is where we launched a lot of this new kind of effort, and then bring more and more partners as we go along? And I think it culminates in what the UAE announced here on Friday, which is Alterra. Which is, I think, OK, we got to put the money towards this goal of net zero, but it has to be invested in a broader—to a broader set of locations. And it has to have a cost of capital that enables the investment in countries where right now the cost of capital is what prohibits the investment itself.
So these are all the—a lot of different pieces. And if we’re going to be successful, the thought was that we would have—that I would try to see if I can bring the different parts of the US government, the different agencies that are all doing great work, and to all coordinate towards one goal, while doing the same thing with our friends and allies around the world.
FREDERICK KEMPE: And I guess two things. In this effort, what do you think success will look like? And over what period of time will we see it? And in that context, how does this COP28 fit in? You’ve seen the various media controversies about this. Some have called it a divisive COP because of the issue of fossil fuels and climate. Others have called it an inclusive COP, that you can’t get to the solutions we want to get unless you bring all of these actors together. So two things, what does—in your own role what does success look like over time? And then, secondarily, how do you think this COP28 will be remembered, if you don’t think it’s too early to talk about that?
AMOS HOCHSTEIN: Think what success looks like, is if we took—you know, this is the stocktake COP. If we have a stocktake that doesn’t have to be announced as a stock but we keep taking stock as we should, and then as we move forward we see that the percentage of invested dollars are distributed more equally around the world, one; two, that we’re actually building infrastructure that will enable investment, whether that’s hard infrastructure or it’s the deployment of actual energy infrastructure; and if we’ve been able to do those two things over the next few years, then I think that will be—for me that will be seen as success.
If we—if as a result of that we’re actually narrowing the gap between developed and developing economies on both deployment and viewpoint and a feel that everybody is in this together so I think that will—for me that will be the success.
I’ll add one aspect to that that I haven’t mentioned before, and that is Landon talks—and, Fred, you really started this at the Atlantic Council on energy security. And it used to be—a few years ago somebody said to me, well, energy security is the—is code word for fossil fuels. So there’s the climate world of energy and there’s the energy security.
To me, if we’re still doing that today that’s not a success. That’s a failure, because energy security is as true in the era of climate change and battling climate change as it was in the era of fossil fuels and security of supply and making sure that it is available, affordable, and diversified is not something that we only talk about in the context of Russia and Europe on gas. It has to be the same for EVs and lithium and panels and—solar panels and turbines.
And so the entire supply chain can’t be dominated by one country. It has to be—or—and I’m saying not China and not the United States. It has to have a diversified set of investment into the infrastructure that’s necessary from mining to processing to manufacturing and distribution. All of that has—we have to—we can’t have single points of failure and the world has to have competition in this world so that prices can continue to come down.
As far as this COP, look, I think there’s a lot we’ll have to judge. You know, you can only judge certain things in the middle. You’ll have to wait to the end to see how things turned out. But I think Dr. Sultan has done a very good job, and the team around UAE, of putting together, one, a beautiful COP and efficient and effective from a facilities and location and it’s really run very smoothly.
I think we’ve had some very important successes that before COP we talked about were going to be the failure points potentially and that is the loss and damage, whether we would be able to get something on an agreement of the fossil fuel companies on methane leakage and reducing methane.
So we’ve had already some successes of bringing people together. I think there are some things that are always difficult to achieve at COP because they require such broad consensus or, rather, consensus from such a broad and diverse viewpoint around the world and that’s what makes it so difficult and that—we’ll see how that develops.
Some of those never get agreed to early and we’ll have to see where we get to. But I think—I want to just respond to one thing that you said, which is, is this going to be an inclusion COP or is this a divisive?
The thing that bothers me the most in this debate not just here at COP is that we push worlds into their corners and we create echo chambers, and I can name the conferences that I would go to where they’re all 90/10, right. Ninety percent is fossil fuel companies and fossil fuel financiers and you get a certain view of what 2050 really will look like in reality—a certain skeptical view—and then you come to COP or you go to a different conference and it’s, you know, we can do it tomorrow and there’s a 90/10 in the other direction.
That’s not going to get us there and I think what the—what we’re trying to do here, what I think the government of the UAE is doing and the presidency here, is bringing everybody together. And I think it’s OK to have disagreements. I don’t think that we should expect that if somebody came here and didn’t agree then that’s a failure.
I think that’s a success that we’re having the conversation. We should let people views change, and the only way to change that is by having everybody there together because this is, again, the energy system. If you really want to change the energy system, you really want this to be a net zero world, you can’t do it by just wishing and willing.
You have to bring everybody together and say, here’s the reasons why we can create a market-based—working with market-based solutions, government, MDBs, philanthropies, of how do you bring everybody together to make this investable and then maybe the fossil fuel companies will say, OK, I need to start investing more into this part of it because that’s not just investing in my disruption but it’s investing in where the future is going to be.
And that’s where—that’s when we get to success, when everybody’s going—rowing in the same direction. We won’t get there right away. I think that’s OK. But I think bringing everybody together to have the hard conversation is better than separate echo chambers.
FREDERICK KEMPE: That’s just a terrific answer and I’m really proud also over the eight years of this forum that we have never been 90/10 in either direction. We’ve always had the full conversation and I’m really proud of that.
So CIA Director Bill Burns talks about climate as the problem without borders. But then he talks about what’s going on in the rest of the world which is the problem that has borders which is a war in Ukraine, a terrorist attack on Israel, Hamas—the war in Gaza that’s followed.
How did October 7 change your job? You’ve been playing a lot of—you’ve been spending a lot of time on that issue as well. And I think a lot of people in this audience know this but if you don’t, Amos was instrumental in bringing about the Israel-Lebanon maritime deal and in that context is—you know, that deal would be almost impossible to do right now, at a guess.
But how does something like that stand up? So the problems that are going on right now in Israel and the Middle East how does this affect your job and what you’re trying to do and what you’ve already achieved with Israel and Lebanon?
AMOS HOCHSTEIN: I think October 7 affected the whole world and waking up to the really horrific attack—and the more time goes by the more we learn about how horrific that day was—and now we find ourselves in a place where nobody, I think, wanted to be in. Nobody in this room and no one in the civilized world wanted to see this war in Gaza and where so many innocent people and children from every—from across both sides are suffering.
And Israel has the right to defend itself. We want to be able to see what—a stable and peaceful existence. But nobody wants to be here. This is a horrific place for all of us regardless of where you fall and how you see it. There is—this is—everything changed on October 7 and it was not in a good direction.
I think that where, as you said, we negotiated the—we helped the sides negotiate a maritime agreement that for the very first time exactly a year ago we got a real boundary between Israel and Lebanon.
Israel and Lebanon have never had an agreement on any kind of boundary ever and the idea that these two neighbors since their independence have never agreed but finally agreed, yes, it was in the maritime so there were certain things that made it easier but it was still fairly difficult, and it was fourteen years of multiple envoys from different countries trying to get there and we finally got there.
I think my success was based on the fact that I was one of those failed attempts in the past. So sometimes when you fail something you come back and you learn from that. But I think that we’re—we have to learn—what we’re trying to do is learn from what went right there and the countries—Lebanon did not—
FREDERICK KEMPE: Could you talk about that? What did go right there?
AMOS HOCHSTEIN: Well, I think there were wins for both sides. The idea was not—when you walk into these negotiations oftentimes is a zero-sum game of—the first conversation I would have with both sides was, well, but what are they going to get, and I said, forget what they’re going to get or not get. Don’t worry about that. Tell me, what do you want out of this? What’s in it for you?
It sounds simple in this room but I promise you that over several years we could not get the answer to that. Neither side can actually answer that question. It was much more important to delineate and describe what the other side should get or should not get or what was fair or what happened twenty years ago and fifty years ago.
Once we can get past that part of the conversation and say—I can—we were able to show and see that what they actually want their number-one priorities did not clash. There was no—it suddenly wasn’t a zero-sum game. Both sides can get their number one, two, and three most important piece that they needed—economic security, physical security, et cetera. So I think that and sort of making—understanding what the red lines were, both sides, was enabled.
I think that what we have wanted since October 7, since that morning, was to make sure that, as bad as the situation is in Gaza, in this war, that we can keep it contained there, that it does not—we do not want to see this war expand across other borders. Now, it has to some degree. There has been an exchange of fire on almost a daily basis, except for the pause, between Israel and Hezbollah and some of other Palestinian armed groups—terrorist groups in—housed in Lebanon. But keeping it at a certain level of violence, but—which is—again, stating the obvious, that is not an acceptable situation, but it’s a—it’s a reality. But trying to lower the flame there, trying to get to a much more peaceful existence, and to see what is it that we can do to get to a solution that provides more security for people in Israel who live in the north at the border and for people in Lebanon to live peacefully in the south and to have economic prosperity.
The thing that I learned the most from what we did in the maritime agreement and other agreements around the world that I’ve been involved in is there is a key element of economic prosperity that we—that we have to integrate. And I’m a believer not just in energy security being part of national security, but economic prosperity has to be part of national security, because the more there’s physical interconnection and integration, the more there is a codependency and the more that there is what to lose. And I think that there—it’s important as much to have what to win for, what to look forward to, and to know what you lose when you walk away from it.
And so I think that as we hopefully get to the other side of this conflict as soon as humanly possible, and while achieving what is necessary to secure the future, we have to look at something that’s viable for the Lebanese state to get stronger, to return to economic growth, and to have a security along the border or along the line—the Blue Line between Israel and Lebanon.
FREDERICK KEMPE: Thank you for that. I think this is now working, so you can hang onto that microphone. Maybe yours is as well.
So you’ve been a champion in the White House for normalization with Israel through the Abraham Accords, something that the Atlantic Council has spent a lot of time on. In fact, the week of the terrorist attack we had to bring our team out of Israel. Ministers from the normalization states were on their way to Israel for a conference that we were holding that would have been focused on economic integration. President Netanyahu would have been part of it. Ministers from the region would have been part of it. So this—there are some real human victims, but this is also a victim of this. You know, and our Middle East Program, working with the Jeffrey Talpins Foundation, led by Will Wexner, has done a lot of work on this.
You were also involved in an effort for—that seemed to be growing closer with Israeli-Saudi normalization. You said you hope you get there. What is the path back to that? Is there a path back to that? How much damage has this situation done for all of that hope?
AMOS HOCHSTEIN: Look, we have had—we’ve had examples of what is positive momentum and the kind of future that this region can have. And I think that in the previous administration, the great work that was done on the Abraham Accords and the remarkable decisions that were made by the government here in the UAE and Bahrain and Morocco to take a step towards a different kind of future, and to understand that if we want to focus on the real existential crises of the day of climate change and economic disparities around the world, that’s what we should all work on together. And the vision that President Biden has insisted on since the day he came into office is to focus on a regional integration. It has to be the path, and strengthening what was done in the Abraham Accords and expanding, and looking at what other kind of agreements we can make.
I think that the United States has always wanted to see throughout multiple generations and administrations a normalization of relations between Saudi Arabia and Israel. It’s no secret that that’s something that President Biden has wanted to see. He’s talked about it a lot. His trip to Saudi came as a—part of a two-stop trip between, first, in Israel, and then to Saudi on a direct flight from Jerusalem to Saudi Arabia. And all the work that was done since then was to see and explore what is possible.
Clearly, we’re right now in a moment of conflict that we all have to focus on getting to the other side of. But I don’t think that we lose the hope, the vision, and we’re going to continue to work towards that. I think that not every road is a straight road, and sometimes it goes in—we have to go in different directions first. But the goal is still the same. And we remain as committed to that goal of regional integration. And it’s not just about Saudi Arabia and Israel. It’s as broad as—it has to be much broader than that.
If we all can focus on those kinds of solutions that also use that momentum to then support what—how we can better the lives of Palestinians in the West Bank and Gaza, how do we use that momentum to create an atmosphere that is the opposite of where we’re going now, of increasing hate speech and increasing demonization of the other side, and get back to starting to talk about what brings us together, what unites us, and the same fears, hopes, and dreams that people on all sides of this region have, that are no different than they are in the United States, Europe, South America, or everywhere. We want to have a better life for our—for our families.
And I think that all has to be together. So I don’t think that we have—we’re changing directions. I don’t think this conflict should do that. In fact, this conflict should be a doubling down on reminding us that if we don’t go towards regional integration, peace, and security, this is this—this is the alternative. These are the two options that the world is facing, and this region faces. And I think it’s an overwhelming choice to choose the path of integration, peace, security, and prosperity.
FREDERICK KEMPE: That’s a very powerful answer, thank you, Amos.
Let’s try to get a couple of questions in, in the time that we’ve got left. Let’s pivot back to energy. President Biden talks about inflection points quite a bit. And I wonder if you can talk about the energy inflection point we’re in, and the relationship between energy interconnectivity and energy security, and the emerging energy system. And how does it shape US energy security priorities moving forward? As you said, for a while energy security—that term almost went off our screens. And they came back pretty powerfully with the war in Ukraine—Putin’s war in Ukraine. And you’ve said in an interview that the US should learn from what we went through in the oil and gas energy space as we transition to an energy market. What do you mean by that?
AMOS HOCHSTEIN: Well, I think I had this conversation with Helima here in January. I got a little bit of trouble afterwards. But there’s a—so we’ll try to do that again. Look, I think that the lessons that—we have to—you can’t just say it’s a new world. You have to learn from how we got here. And I think that the twentieth century taught us a lot of lessons about energy security and security of supply. And it started in the 1970s with OPEC, and it—and then in—and then we saw what happened in Europe and the dependency on gas that for most people started—kind of came on the national—on the international media stage in—as the invasion into Ukraine happened.
But in reality, we were—this is what—the pipeline wars of the 1990s, the direction of where hydrocarbons were going to go, in which direction, they were all about geopolitics. And so we have to learn the lesson. The lesson is not—I’ve said this in Europe a lot—the lesson from the dependency on Russia is not I shouldn’t depend on Russia for all my gas. That’s the wrong lesson. The lesson is I shouldn’t depend all my energy on a single source, or majority of it, on a single source, and I shouldn’t have a single point of failure in my supply chain. And that was true on oil. And it was true on gas. And it is now true on renewables. And it’s true on nuclear fuel for a—I’m happy to see a new enthusiasm for nuclear power with new technology. But my nuclear fuel has to be in that conversation. And in my electric vehicles and my critical minerals and my—the entire supply chain.
The lesson from the twentieth century is, build a well-diversified world and economic structure. And I think we have such an amazing opportunity because you’re building something new. So why would we slip right into the same bad habits of, it’s a little bit cheaper to do this, and I’ll buy what’s cheaper, and I won’t invest in what may be a little bit more expensive, but it will actually be something that is more secure. And I think that’s where—that is good money to spend. The question becomes, who should spend that money? And I get that, because why should a company say to its shareholders, I’m going to spend more money and I can’t really articulate what the amortization is of that extra cost? And when I go to the investment committee, they’re going to say, no, that piece is cheaper. Buy the cheaper one we’ll let the government figure out the other stuff.
So we have to come together as governments and say, no, we’re on the ground floor. It may not feel that way, but we’re on the ground floor of the energy transition. And how do we come together, the wealthier countries together with MDBs and philanthropies and sovereign wealth funds, and say: This is our moment to make these investments. Together with the business community, put our money into the capital stack so that they are—so we de-risk these investments. And that we come out of it’s on the other side with a stronger, more diversified supply chain in the clean energy space, that will actually enable both growth and equity and security. And that’s the energy security—the concept of energy security of the future is in that space.
FREDERICK KEMPE: And I don’t think that answer will get you into any trouble. That was a brilliant answer. So we’re running out of time, we’ve run out of time. But I’d like to end this with a question that is always one of my favorite questions for someone like you, who has to deal with risks and opportunities. And that is, as you—as you look out at the world you’re dealing with day-to-day, what gives you the biggest concern? What keeps you up late at night? And, conversely, what do you see as the biggest opportunity? What gives you your biggest hope?
AMOS HOCHSTEIN: There’s so much that keeps me up at night these days. I don’t think I really get to sleep with what’s the last few months.
FREDERICK KEMPE: That’s the world we’re in right now.
AMOS HOCHSTEIN: And that’s the world we’re in. So, look, I think I would break it down. On the concern side is the physical security of people’s lives and their ability to protect their families in a world where we are in two active wars in Ukraine and here in the Middle East. So that keeps me up at night. The piece—the second piece is, how do you both bring them to a close in a way that’s not about just ending the war, that’s—it’s easy to say, just end it. But how do you end it in a way that actually defeats what started it, and making sure that the next phase is actually longer-term security? And so those are the things that really, how do you—how do you do that?
The next piece is really what keeps me up at night, but it also is what I feel is the best hope and opportunity, is the ability to rebuild and reshape a world. And what we’ve—what I’m grateful that President Biden has allowed me to do is to implement that vision. And to—so while I’m here in the Middle East, you know, I’ve been to Angola and DRC and Zambia, and the president of Angola was just in the White House last week. And that’s because there’s such an opportunity to do investment in a different way, that’s development is really important but it doesn’t replace investment. And that’s what we’ve done wrong. And so the idea that we can recognize we did that wrong, let’s do this better, and we can keep our development agenda and add into the component of actual investment, so that the infrastructure we build, we don’t come back to it ten years later and there was because it was just development without investment it meant that there was no money for maintenance, there was no money for running it efficiently, and now we have these big pieces of infrastructure that are not working.
But now we’ve actually cracked the code and been able to launch projects that the president talks about all the time. Even during these two wars, President Biden talks all the time about building a railroad from Angola to Tanzania, across all of Africa, and doing it in a commercial way. And why? Because that enables critical minerals and lowering corruption; because that enables food security, investment; because if you can have a landlocked country that has good water and good soil and good weather but it doesn’t have a connection to any market, then nobody’s going to invest in it, but now you can if you do that, and you can get fiber-optic connectivity so that small businesses can be there.
All of these things, connecting those dots is—it keeps me up at night that we’re not working fast enough, but the hope and opportunity, I can’t tell you how thrilling it is to work on these projects, or the one that we did with the United Arab Emirates and Saudi Arabia and the European Union and India of getting a logistics operation—IMEC—the corridor from India to the Middle East, through the Middle East to Europe that will be energy, electricity, hydrogen, fiber-optic cables, and lowering the cost of shipping products and materials across the world. These are the kinds of things, Fred, that we can actually do by working together with other countries that literally transform the world, and that is—that is the fun part about this job.
FREDERICK KEMPE: Amos, thank you so much for that. I don’t think in my lifetime I’ve ever seen a world where the risks are so pronounced and the opportunities are so pronounced, both at the same time. It makes me feel better that you’re in a position of responsibility during this really tricky time. So join me, please, in thanking Amos.
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Image: US energy envoy Amos Hochstein speaks at the Atlantic Council Global Energy Forum in Dubai, December 7, 2023.