American Security Project

Yesterday evening, December 9, the FY-15 Omnibus was posted by the Rules Committee.

Listen to ASP’s Andrew Holland explain the details and the importance of fusion to America’s long-term energy security.

It is expected to be voted on and approved by both the House and Senate before Friday, December 12.  Division D covers Energy and Water spending, including the Fusion Energy Sciences. Domestic fusion programs are given $317.5 million, $51 million over the FY-15 request, with breakouts for the three large tokamak experiments: NSTX-U, DIII-D, and Alcator C-Mod.

$150 million is proposed for ITER, the same amount of money as the FY-15 request.  The Senate position to withdraw the US from ITER participation has been stricken.

This, combined with strong support in the FY-14 budget is an encouraging result for the US fusion program. ASP is working on a forthcoming paper on how to organize the fusion program. Put together, this shows a renewed commitment to the US fusion program.

Find out more about fusion

Amos J Hochstein, Special Envoy and Coordinator for International Energy Affairs leading the Bureau of Energy Resources (ENR) at the U.S. Department of State spoke at the American Security Project on Monday about energy policy and the critical role it plays in global and national security. He highlighted three topics.

First, he addressed the role energy plays in both ISIL’s efforts and our efforts to degrade and ultimately destroy ISIL. To address the issue of energy finance, he looked at the full chain of energy – from the moment of field ownership and production to where ISIL gets the money. The coalition air campaigns, he said, are taking away refineries as assets and changing the dynamic of the entire energy chain. The airstrikes “send a warning shot- the wild west days are over.” However, degrading and ultimately destroying ISIL takes time.  “It’s remarkable how successful we’ve been in a relatively short period of time. The coalition aspect of this is what makes it so successful.”

Next, he spoke on the changing oil markets and the impact they have on United States and Middle East relations. He rejected the idea that the U.S. is disengaging from the Middle East due to changing oil markets. He stated that while there is a critical shift in the dynamics of the U.S., that does not mean the US is disengaging from the Middle East.

“Our relationship with every country evolves… and when critical parts of our economy change, other parts change as well… this is a partnership, and it will continue to be a partnership.”

Finally, he spoke on the positive role energy has on the Gulf region. “Energy alone will not create geopolitical change, but it can be a great catalyst for geopolitical change.” Citing the warming relationships between Israel and Cyprus, he said oil can be used for international cooperation. It can “foster more security and prosperity. And more prosperity ultimately means more security.”

BGen Stephen A. Cheney, CEO of the American Security Project moderated the third panel discussion of “Electricity Supply: What it Means for Security, Development, and Geopolitics” on Innovative Solutions to Providing Reliable Power. The panelists were Eric Toumayan, Managing Director of Government Relations at APR Energy, and Ken Ditzel, Managing Director at FTI Consulting.

Building on the theme of interrelatedness of electricity and national security, Toumayan described how APR employs new ways of thinking to satisfy underserved electricity markets. In 2001, APR opened a 20 MW plant in 60 days, and he described the changes in a town in Sri Lanka over those two months.

“The fishermen were selling fish on the beach, a few fish at a time, no way to keep them fresh. A few months after we turned the power plant on, the fisherman were selling a day’s catch at a time on a bed of ice. They’d plugged in an ice machine. And yet later on in the process when the plant was running a restaurant had opened on the beach. So these are the kinds of transformative events that happen on a day-to-day basis once you can provide power to the underserved markets.”

Citing power delivered to Sengal in 2011, he described how APR implements fast-track solutions.  In Senegal 2011, power outages lowered GDP growth by more than 1% by year. The situation could have triggered violence and rioting. 50 MW of electricity were delivered in 60 days.

The consumer provides a location, typically near a power plant, fuel, and connection to the grid. APR provides everything else, and the consumer pays for kilowatt hours.

“The fast track solutions… are based on the use of power modules,” Toumayan said. The modules used to generate electricity are jet engines in a truck. They are in shipping containers and can go wherever a truck can go. The jet engines can use both liquid and gas fuels; they are reliable, and are 20 times more powerful than a diesel generator of the same size. The turbines are sustainable, quiet, and clean.

With the mobile turbine technology, power can be delivered quickly, and it can be delivered in very large increments.

Ditzel spoke about natural gas price considerations. “Gas is going to be important for what technology you choose going forward.” He highlighted three interconnected objectives for delivering electricity: reliability, low cost, and sustainability.

Reliability is always number one. Historically, cost has been number two. It’s becoming more and more fact that sustainability and low cost are becoming equivalent in terms of second place, given EPA’s regulations.

On reliability, Ditzel brought up coal use. Because of EPA regulations, coal consumption is going down. “Coal is there as a diversity fuel source for a lot of generators, and now it’s being slowly taken away.” Solar and wind power are backup energy sources, but their intermittent nature affects prices. Nuclear power takes too long to develop, on the order of 10 years.  Going forward, natural gas will fill that role.

“No matter which way you look at it, predicting gas prices has been challenging,” Ditzel said. He showed several graphs of the AEO gas price range vs. the historical cost of gas, and showed how predictive models fluctuated. He said that international drivers, like flat global GDP growth, global shale gas boom, or the restart of nuclear reactors by Japan or Germany could lower international LNG prices.

To mitigate forecasting bias and price uncertainty,

Brian Rich, COO of APR Energy, moderated the second panel of ASP’s “Electricity Supply: What it Means for Security, Development and Geopolitics,” “The Challenges of Generating and Delivering Electricity.” Panelists Dante Disparte, CEO and Founder of The Risk Cooperative, John Morton, Chief of Staff to the President of OPIC, and Faith Corneille, Acting Director of the Office of Electricity and Energy Efficiency at US State Department, discussed the risks posed by supplying power to communities surrounded by instability, and how to mitigate these concerns successfully.

Poor governance structures and political and social instability certainly represent major barriers to generating and supplying electricity. While these factors do discourage some firms from entering into the market, the panelists focused instead on the risks a lack of access to power generates.

Bad things happen in the dark.

“Bad things happen in the dark,” Disparte stated in his opening remarks, summarizing not only the opening panels’ directive of establishing the linkage between power supply and security but also the vacuum created by the absence of power.

Morton went further on the link between poverty, risk, and power tying US national interests into this nexus.

Poor countries have a regime changes on average every 7 years. Many of those regime changes are not very kind to us, our interests, and much less to the people in the countries with the regime change. We have interests to support more stable democracies… which means we need to decrease poverty and power is a key aspect.

The Energy Resources (EnR) Bureau looks to use energy as means to protect those interests. Corneille offered insight into the office’s role touching on two important barriers to a stable power supply. “The EnR Bureau came to fruition in terms of the recognition of the links between energy and national security, geopolitical influence in conflict that emerges from energy. We can only look at Russia and Ukraine as one example, to the affordability and import dependency issues associated with the Caribbean as another example.”

As panel one discussed, the importance of micro-grid systems to distribute power to rural communities cannot be overemphasized. Before turning it over to the audience for questions, APR Energy’s Brian Rich asked the panelists to speak to some of the work being done to address the challenges companies looking to participate in this space face.

Morton responded, “[The] first point about ‘empty middle’ I totally agree – with a couple of exceptions there have been a handful of companies looking to service that space [where micro-grid systems are necessary]…There is a movement afoot for more companies that are looking at that space. They realize it is the sweet spot in many emerging markets. The successes that [APR] and OPIC clients have had show that you can operate in that niche.”

Morton went on to discuss how OPIC supports clients looking to bundle micro-grid projects across rural areas through risk insurance and financing options.

Disparte, a SME risk expert, also spoke to the opportunities micro-grid systems and equally non-traditional models present for organizations like APR Energy and others. “I think the risk proposition for…antiquated approaches is starting to shift in favor of alternatives…where in some cases they carry a much smaller footprint, not unlike APR’s approach, and they have the opportunity to connected distributed economies. Rural electrification is an attractive proposition. I think in some cases the risk in those approaches is lower than the traditional model. The traditional model is being upended.”

Several audience questions touched on the role of renewable en...

The first panel of ASP’s conference “Electricity Supply: What it Means for Security, Development & Geopolitics,” entitled “Electricity: The Catalyst for Change,” brought together an array of development and security experts to highlight the importance of energy and electricity generation around the globe. Each panelist stressed the importance of reliable, sustainable electricity as means to bring about peace, security, and stability.

Moderator Joanne Trotter, a Sen’s Bureau for Economic Growth, Education and Energy, continued by saying, “Within USAID one of our key focus areas is being able to help our host country partners really advance and make this transition to an advanced economy. And our view is that access to reliable and affordable energy particularly in the form of electricity is one of the key barriers that needs to be overcome to make [economic development] happen.”

“Electricity, both large and small-scale projects, is helping to build peace even across still very contentious borders,” explained Holly Dranginis, a policy analyst for the Enough Project. Dranginis illustrated the potential role of electricity in the Democratic Republic of the Congo and the Great Lakes Peace Process.

Electricity and economic development at large has become core to the peace building agenda… by first and foremost bring[ing] otherwise adversarial actors and parties to the table… development and profit is motivating in a way that brokering a ceasefire or negotiating with rebels can not.

Using hydropower projects in Central Africa as an example, Dranginis noted, “The difference between cooperation and destabilization is whether the projects actually benefit the local populations…If [electricity] projects are not touching the rights of youth and women,” they will not facilitate peace-building efforts.

Emphasizing the importance of electricity in the advent of climate change and to spur economic development, Sasanka Thilakasiri of Oxfam stated,

If we don’t address climate change, we don’t address poverty. 1.2 billion people don’t have electricity. There is no chance that we can fight poverty or hunger without access to electricity.

The majority of electricity-deficient people are the rural poor. Due to deficiencies in grids, it is hard to expand energy access to rural areas. Thilakasiri noted, “Large-scale energy won’t reach out to the rural population. You need more micro to affect more people…65% of the energy needs to come from the off-grid and micro-grid sources. So it makes sense to look at the more decentralized projects.”

Electricity bolsters security and stability efforts. Stability Operations specialist Mark Kustra USMC (Ret.) discussed the role of electricity in Iraq and Afghanistan: “If you don’t have security, you don’t have electricity. If you don’t have electricity, you don’t have security.” Iraq, Kustra said, had a developed, centralized electricity system. In the wake of Saddam Hussein’s fall in 2003, the Iraqi people expected power when mass looting and violence resulted in intermittent power at bests, increasing tensions in an already conflict laden environment.

However, maintaining electricity infrastructure and ensuring a sustainable supply of electricity in unstable regio...

In the wake of Russian aggression, ISIL, climate change, Ebola, trade negotiations, elections in the European Union and the United States, and new leadership in the European Commission, U.S.-EU cooperation comes at a time when partnership is more important than ever.

ASP’s panel on The U.S.-EU Strategic Partnership featured a comprehensive and compelling discussion on the state of trade, energy and security between both entities. The speakers conversed regarding a variety of issues including the Transatlantic Trade and Investment Partnership (TTIP), relations between the U.S. and EU, and provided insight on how this key global partnership can be strengthened.

The discussion was spearheaded by the Deputy Assistant Secretary in the Bureau of Europe and Eurasian Affairs Julieta Valls Noyes, who began by emphasizing the importance of the U.S.-EU partnership. “Today we are carrying out words and policies rather than war. The U.S. and EU partnership is a peace project…the path to prosperity entails that we work together.” Owing to recent events, this new partnership is being tested. There is new leadership, a new parliament, and a newly-elected US Congress.

Paul Hamill, ASP’s Director of Strategy and Communications, and the panel’s moderator, asked the speakers how the U.S. and EU should face Russia during such an intense diplomatic situation. In the face of Russian aggression. Valls Noyes said that the U.S. and EU are working together to support Ukraine. They have jointly imposed successive rounds of sanctions on Russia. Paul Adamson, editor-in-chief and founding publisher of E! Sharp, like Valls Noyes, endorsed the sanctions, commenting that the U.S. and EU have done a “good job on sanctions” and have “forced everyone to work together.”

Both the U.S. and the EU recognize that “security is undergirded by prosperity,” highlighting the need to focus on energy security and trade. The TTIP, Ms. Valls Noyes said, “links the world’s two largest and most prosperous economies.” That the U.S. and EU are open for a resilient trade partnership like TTIP, underscores the depth of both entities’ commitment.

Adamson stated that TTIP is a modern, updated version of previous trade agreements between the U.S. and EU. There are broad economic and geopolitics, and market and trade aspects of the TTIP. It is a “docking station to which any country can attach itself…if it abides by TTIP parameters.” Europe wants a robust energy chapter in TTIP, as the agreement presents the opportunity for them to address their need for gas and energy supplies, which have been complicated due to Russian aggression.

However, the U.S., Adamson said, is not taking the EU seriously, but what’s worse, is that the Europe is not taking the European Union seriously. For this, Adamson proposed that the international order needs to be strengthened and modernized – a major potential for U.S.-EU cooperation. First, they need to “identify powerful areas of cooperation,” for which the TTIP is extremely important. Simon Rosenberg, President of NDN, noted that even though the party in power has been pushed out of Congress, anticipating collaboration on foreign policy issues is far easier, and increases the chances of getting TTIP approved in the U.S.

In mentioning President Obama’s speech at the UN, Rosenberg said that the President made it clear and explicit that strengthening the liberal international order is the cornerstone of his foreign policy, further inviting greater cooperation between the U.S. and EU. Adamson and Rosenberg concluded by stressing that TTIP should not be considered as just a ‘trade agreement,’ because it is much more than that.

Adamson further opined that the U.S. and EU need to modernize “our own economies… by successfully and wholly making a transition” towards the modern era. Europe is further behind in understanding the imminent changes to the world economy. As Valls Noyes stressed,

Anderson University

The final stop on the tour was at Anderson University is a private Christian university in central Indiana. It was established in 1917 by the Church of God (Anderson, Ind.). Anderson is a part of ASP’s University Partnership Program.

At this event, ASP spoke to a group of about 50 undergraduate students as well as members of the local community about how climate change was impacting national security, and why that matters to small towns like Anderson. The audience was interested and engaged in the topic – they were particularly excited to hear about how climate change threatens agriculture. General Castellaw explained: “One of the areas that we are actually very concerned with is in food security. By 2050, we’ll have two billion more people in the world, and we need to maintain the amount of food that we now produce.”

The Andersonian, Anderson’s student paper, included an article about the event, “Climate Change Discussed.” The full video and audio of the event is also available.

ASP in Indiana: Climate Change and Security in the Heartland

Butler University

The first stop of the tour was a public event at the Butler University’s Robertson Hall. Hosted by Butler’s MBA students association, the event drew over 40 students, faculty, and community members to the discussion. Holland laid out the facts about climate change in a presentation, and then Generals Castellaw and Jameson discussed how climate change is going to change the operating environment for the military, and discussed some of the threats that poses. Castellaw discussed threats in the Middle East and Africa, drawing on his many years of experience in the region. Jameson discussed the threats to security in the Pacific, and how uncertainty in planning makes the future difficult. After their presentations, Dr. Peter Grossman, an economics professor from Butler discussed how the problems that the government has in developing and following through on any energy policy makes the challenges of climate change even more difficult.

As the majority of the audience were business students, questions from the audience focused on how climate change will impact their future careers – including how to price risk in insurance markets, and how climate change presents a real business opportunity for those companies that can provide services that either adapt or mitigate climate change. One of the most interesting questions was about how to motivate the American public – with the understanding that Americans do not want to do little things – they focus on big, important issues.

The program at Butler was facilitated by Barry Dunham, MBA student at Butler and ASP Adjunct Fellow, and Tim Bennett, the Director of Graduate Programs at the Butler University College of Business. ASP is grateful for their support. The entire event is available as a podcast, so take a listen.

 

ASP in Indiana: Climate Change and Security in the Heartland

One of the bright spots in the global economy of recent years has been the growth and development of African economies. By a number of different economic indicators African states, especially in Sub-Saharan Africa, have outperformed many of the world’s top economies. On a continent-wide level the World Bank projects the region’s GDP growth to continue at 5% through 2017. Increased stronger public investment in education and infrastructure as well as a growing consumer population many see this as the ideal time to invest in Africa.

Opportunities for investment in Africa was the subject of the second panel as part of American Security Project’s conference: Africa – Promoting Investment and Extending America’s Security. The panel was chaired by ASP Adjunct Fellow Peter Choharis and the panelists included Patrice Backer, COO of AFIG Funds, Jake Cusack, Managing Partner of Crossboundary, Carolyn Campbell, Managing Partner of ECP, and Fadi Elsalameen, Adjunct Senior Fellow of ASP and Prinipal of YCF Group.

Peter Choharis opened the discussion by highlighting the growth trends for Africa and comparing American and Chinese investment models, as well as challenges and practicalities of engaging in business in Africa. Far from targeting profits as the only goal of investing in Africa, all of the panelists agreed that in order to maintain the growth that the region has experienced in recent years, African economies will have to continue to create jobs for their young populations which should be driven by the private sector. As Fadi Elsalameen succinctly stated:

For us, when the country does well, the business does well. We are part of the communities so we want the communities to succeed.

The panelists’ deep experience in business development and investment in emerging economies lead to a highly informative Q&A session for all those in attendance. Kicking off the question period was the issue of finding investment opportunities below the state level and particularly ones which provide a social impact. Carolyn Campbell pointed out that all of the companies that her equity firm, ECP, works with provide a social impact in some way but it also depends on the sector. Areas she highlighted were in ethical mining funds, education, microfinance, as well as getting basic pharmaceuticals into Africa. Patrice Backer followed up:

The private sector has been maligned in Africa but anything that can be done to strengthen the African private sector will have a social impact.

In the interest of making a real impact from the investment side, Jake Cusack noted that often it is the larger investments that make an impact but entering the markets early is also what matters. “The pioneer payoff,” or being the first mover in some of these “frontier markets” which are growing by as much as three times the rate of developed markets can lead to huge dividends. He also conveyed the importance of the U.S. government and other institutions in laying the groundwork for investment opportunities in riskier environments by providing grants, subsidies and concessionary finance through such programs as Power Africa.

When asked about what kind of consumer products and companies investors look for Campbell said that her firm doesn’t discriminate when it comes to products but a company should “hit a few prongs.”

These included: “(1) domestic facing businesses, (2) businesses that can potentially expand into two or three countries, and (3) something with a barrier to entry, license or a business model that is difficult to replicate [such as a fertili...

Amid dreadful headlines about Boko Haram, al Shabab and Ebola, the same issues that have always afflicted the continent, a positive atmosphere is emerging within Africa. The core of the August 2014 U.S.-Africa Leaders Summit focused on trade and investment, and culminated in $7 billion dollars of new exports.

In the first panel of ASP’s timely conversation, “Extending America’s National Security through Private Sector Investments,” Nelson Cunningham, ASP’s recently elected president opened the discussion by asking how America can promote Africa’s development and security while simultaneously advancing U.S. national security.

Leocadia Zak, the Director of USAID’s U.S. Trade and Development Agency (USTDA), emphasized the need to build partnerships and focus on trade, not aid. “Economic growth is important to security,” she said, “and it is important to bring people together – that’s exactly what USTDA does.” Over one year USTDA’s Africa portfolio has doubled, reflecting the immense opportunity for investment. “For every dollar [USTDA] programs, [the U.S.] gets seventy-three dollars in export benefit.”

To foster partnership, USTDA aims to listen to what both businesses communities want. It brings “big delegations” of both large and small businesses to Washington DC, Houston, and Chicago, “to liaise with businesses.” In doing so, African business delegations have the opportunity to meet and develop partnerships with U.S. businessmen. As the U.S. increases its interest and investment in Africa’s economic growth, countries in Africa are increasingly turning to the United States for help with security issues. This was highlighted by USTDA’s recent investment in the construction of Ghana’s airport. Ghana approached USTDA and asked whether it could “fund a study for [airport] security” due to the probability of transiting terrorists through the region.

Ambassador Robert Jackson, the current Principal Deputy Assistant Secretary for the Bureau of African Affairs, linked trade and investment to American security. According to Jackson, “promoting both security and economic growth in Africa is in the U.S.’s national security interests.” Fast-growing economies, improved democratic processes, stability, and strengthened global interconnectedness are all results of U.S. investment in Africa.

Jackson also underscored the importance of “investing in the next generation.” Economic growth will prevent conflict, further stability, and enable the next generation to continue to tackle key local and regional issues. In sum, “sustainable growth will prevent insecurity and future challenges.” It will enable African countries to take on climate change, extremism, trafficking, and more.

Scott Eisner, the Vice President of African Affairs and International Operations at the U.S. Chamber of Commerce, continuously emphasized the importance of leveling the playing field. Eisner echoed Zak’s comments on human capital and stressed the “need to build skills” in order to address “the dearth of skills and education amongst countries businesses wanted to invest in.”

Highlighting the Chamber of Commerce’s focus on skill development, Eisner stated that the U.S. needs to simultaneously drive American policy forward while driving towards skill development and job creation in both Africa and the U.S. In other words, the U.S.