Energy Update: Notes from Energy Committee Q2 2019 Call

Energy Update | April 19, 2019
Authors: Riley Smith and David Mineo
 
NOTES FROM ENERGY COMMITTEE Q2 2019 CALL
 
 

On April 16, the Energy Committee held its Quarterly Call for Q2 of 2019. During the call, the Energy Committee reviewed the 2019 Work Plan. The Committee also discussed how best to leverage new initiatives, such as the Energy Trends Roundtable Series, to deepen engagement with the U.S. Government (USG), especially on the implementation of the Asia EDGE initiative, the energy-focused pillar of the USG's Indo-Pacific Strategy. A PDF version of the call notes can be found here. 

If you have any questions about the call or the activities that were discussed, please contact Riley Smith at rsmith@usasean.org.

Notes from the Energy Committee Q2 2019 Call:

Welcome Remarks – Amb. Michael Michalak, US-ASEAN Business Council (US-ABC)

  • Energy Committee’s two main programs in 2018 were:
    • Roundtable for Indonesian Minister for Energy and Mineral Resources, Ignasius Jonan
      • He was in Washington, DC, for the 27th World Gas Conference
    • Annual business mission to the ASEAN Ministers on Energy Meeting, which was in Singapore
  • Both were successful engagements, especially the mission to AMEM
    • We had one of the largest delegations in recent years
    • We were able to meet with more and higher-level country delegations
    • Also met with the ASEAN Council on Petroleum (ASCOPE), the grouping of all 10 ASEAN country’s National Oil Companies
      • We believe this will be an important organization to keep in touch with as a number of ASEAN countries look to expand their utilization of LNG
  • For the 2019 Work Plan there is a particular focus on
    • Increasing the number of engagements over the course of the year
    • Ensuring that these engagements are substantive and lead to results for member companies

Opening Remarks by Co-Chair

  • Energy Committee already off to robust start in 2019
    • Two weeks held first roundtable in Energy Trends Roundtable Series
      • Guest speaker was Dr. Amy Searight, Senior Adviser and Director of the Southeast Asia Program at CSIS
    • Roundtables in this series are private, off-the-record meetings with members of the policy community in Washington, DC
      • Focus on energy-related issues in Southeast Asia
      • Will invite officials from U.S. State Department, U.S. Department of Commerce, members of U.S. Congress, and ASEAN Ambassadors and their staffs
    • Next roundtable in Energy Trends Series will take place on May 9, from 9:00-10:00 am, at the offices of Cheniere.
      • Featured speaker with be Deputy Assistant Secretary for the Bureau of Energy Resources’ Energy Transformation Office at the State Department, Ms. Melissa Simpson
      • DAS Simpson will provide an update the roll-out of Asia EDGE
  • The Committee Co-Chair and the Director for Energy at US-ABC recently met with Patrick Wilson, Director of the Office of Business Liaison at the Commerce Department, and Man Cho, Deputy Director of the Office of Energy and Environmental Industries at the International Trade Administration
    • Purpose of meeting was to discuss Commerce’s role in Asia EDGE
      • Mr. Cho is in charge of Asia EDGE at Commerce
    • Both agreed to be speakers at third Energy Trends Roundtable
      • Will likely take place in June
  • Asia EDGE will be a priority for the Energy Committee this year
    • Hope to get Energy Committee members in front of key stakeholders in U.S. Government and the policy space in DC

Review of 2019 Energy Committee Work Plan – Riley Smith, US-ABC

  • Wanted to reinvigorate the Energy Committee this year
    • Have new leadership at the helm—ConocoPhillips and ExxonMobil are Co-Chairs
  • Issues that energy companies face are on much larger scale in terms of capital required and time horizon than issues companies in other sectors face
    • Need to rethink Committee’s advocacy approach so that it addresses these larger issues
      • Energy Committee leadership convened a call in March to discuss how the Committee could be more useful to member companies in terms of advocacy
      • The 2019 Work Plan is the product of that discussion
      • Major topic of discussion was how the Energy Committee can play a bigger role in the conversation about large energy-related initiatives that U.S. Government (USG) is undertaking as part of Indo-Pacific Strategy
        • Asia EDGE is the most prominent
        • There is also a big energy component to infrastructure-focused corollary to Asia EDGE, ITAN
  • A copy of the revised 2019 Energy Committee Work Plan can be found here

Discussion of 2019 Energy Committee Work Plan

  • Question: Can the Work Plan be more explicit in saying that the Energy Committee will advocate for the role that LNG can play in ensuring sustainable energy solutions for ASEAN countries?
  • Riley Smith: We will add that to the Work Plan.
  • Comment: Member companies bring a wealth of knowledge on Southeast Asia and oil and gas sectors
    • Have heard complaints about lack of interagency coordination on Asia EDGE
    • Committee should mention to DAS Simpson at May 9 roundtable that Energy Committee willing to serve as steering committee/advisory board for implementation of Asia EDGE in Southeast Asia
      • Ask DAS Simpson how Energy Committee/private sector can help interagency dialogue take place to move initiative forward
  • Comment: Agree that there needs to be more interagency unity
    • There are so many programs, such as Asia EDGE, Asia Connect, Build Act
    • There is confusion on what resources are available through the programs
      • It would be helpful to identify financing options available through those programs to assist U.S. companies pursuing energy contracts in ASEAN
  • Riley Smith: Also important to see what types of financing options are available through partnerships with countries such as Japan and Australia
    • Will include both in the Work Plan
  • Comment: Japan pledged US$10 billion as part of Japan-United States Strategic Energy Partnership at February 2019 meeting
    • Japan’s Ministry of Economy, Trade and Industry (METI) is point on engaging USG on Asia EDGE
      • METI has a representative based in New York who travels regularly to DC
      • Energy Committee should add representative to list for roundtable speakers
      • NB: In subsequent meeting with Bureau of Energy Resources (ENR) at Department of State, found out that almost all of the US$10 billion that Japan pledged to Asia EDGE had already been allocated prior to the announcement.
        • Funds have been pledged in 2017, before Indo-Pacific Strategy was announced
        • Were repackaged and announced as a pledge to Asia EDGE
        • But out of US$10 billion announced, US$9 billion was already allocated
    • USG wants industry input on Asia EDGE, but does not know how to engage industry
      • Might want to consider holding quarterly or semi-annual business-to-government (B2G) meeting with senior-level USG officials to engage them on this issue
      • Energy Committee could play role as convener and act as industry advisory board/steering committee for Asia EDGE implementation
      • Engagement in this manner could lead to more senior-level engagement and prevent Asia EDGE implementation from being buried in bureaucracy
      • Engaging at agency or department level will leave us mired in bureaucracy
    • Possible high-level USG officials to consider for B2G engagement
      • New Undersecretary for Energy about to be appointed
      • National Security Council (NSC)
      • Office of Vice President (OVP)
        • NSC and OVP drive interagency process
  • Comment:
    • Roundtables are about initiating mechanism for greater engagement with USG
      • Roundtables are the start of the process
      • Aim is to build up regular interactions with USG, bring issues to forefront of its agenda, and help USG through interagency process
    • Committee will raise issue of formal engagement with DAS Simpson during May 9 roundtable
      • Anticipate we will get positive feedback
  • Comment:
    • Interagency communication is broader issue, not just Asia EDGE-related
      • We might not be able to fix the problem
    • Might want to think how we can touch base with every department and agency involved in Asia EDGE individually
  • Riley Smith:
    • When met with DAS Simpson, she gave us list of all departments and agencies involved in Asia EDGE
      • Will use that list as a cheat sheet for what departments/agencies to engage
  • Comment:
    • In terms of advocacy strategy, should make sure we align with ASEAN Embassies on messaging
      • They have a lot of the same concerns about Indo-Pacific Strategy as U.S. private sector
      • Want to make sure we are reinforcing messaging where relevant
  • Riley Smith:
    • Recommend that Energy Committee members let me know what countries they want to us to prioritize for this type of engagement
  • Comment: In talks with USG, want to be sure we talk about how Asia EDGE will benefit U.S. companies and economies
    • How can this impact U.S. economy in positive way? Does it lead to more U.S. jobs?
    • In conversations with USG, always comes back to this
  • Riley Smith:
    • Do any members have metrics they can send me, so we can craft something to convey how doing business in Southeast Asia will help U.S. economy?
    • Would be great to kick off roundtable discussions with USG
  •  Comment:
    • Asia EDGE is ambivalent on energy solutions it’s promoting
    • They are trying to sort out what tools to use to promote U.S. business efforts
      • Want to push for focus on LNG advocacy as Committee objective as well as at forefront for Asia EDGE
  • Riley Smith:
    • Anything related to energy infrastructure that we want to bring up?
  • Comment:
    • We are more interested in hearing what financing options and opportunities are available
      • What type of coordination with Japan is possible to tap into those programs
    • Would like to have for a one-stop shop resource on what types of financing options are available
  • Riley Smith:
    • In general, want to make sure that we have clear, consistent messaging for these roundtables
    • Feel free to give me a call or send me an email if you have topics you would like to discuss

Update on Report on Digitalization in ASEAN’s Energy Sector – Riley Smith

  • ASEAN Centre for Energy (ACE) approached Energy Committee at the end of 2017 with an idea to do a report on the effects of Industry 4.0, especially digitalization, on ASEAN’s energy sector
  • Council’s role was to collect case studies and best practices from our member companies to provide so practical, real-world examples
  • ACE and the Council are partnering with the ASEAN-USAID IGNITE program on the report
    • This means that member companies are no longer required to sponsor the report to have your case study included
  • We have already received several case studies from member companies in both the energy and ICT sector
    • But we are open to receiving more if you have an interesting case in how Industry 4.0 has affected the energy sector
    • The case study need not be about a Southeast Asian country
      • It can be about a developing country, as long as it is comparable to the situation in Southeast Asia

Country Priorities – Riley Smith

  • Appendix A of Work Plan lists country priorities for all 10 ASEAN countries
    • Most priorities taken from national energy plans or meeting notes from past AMEM missions
    • Request you review the Work Plan and make sure we are addressing issues critical to your company
  • Appendix B has information on national energy policies for Indonesia, Vietnam, Thailand
    • Can expand document to include other countries

Closing Remarks – Amb. Michael Michalak

  • Important to remember to engage USG and ASEAN governments on EDGE out in the region too
    • ASEAN interested in EDGE, but does not know what it is or how it will involve them
  • Like idea of focusing on gas
    • All ASEAN countries are looking to engage USG and U.S. companies on this topic