Symposium Reviews The Gulf Cooperation Council as it Turns 31 – Part 3 – Energy

Published: May 30, 2012

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Editor’s Note:

Today we present part three from the “Gulf Cooperation Council at 31: Implications of Trends and Indications for GCC and US Interests,” a symposium presented last week in Washington, DC, by the National Council on U.S.-Arab Relations. In her panel presentation Ms. Randa Fahmy Hudome, former Associate Deputy Secretary in the Department of Energy and currently President of Fahmy Hudome International, discussed cooperative approaches to energy policy among the GCC member states. Additional reports from the symposium are at the links below with the remainder of the presentations appearing separately over the course of this week.

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The Gulf Cooperation Council at 31: Implications of Trends and Indications for GCC and US Interests (Part 3 – Randa Fahmy Hudome)

Ronald Reagan Building and International Trade Center
Washington, DC
May 24, 2012

Part 1 – Dr. John Duke Anthony (introductions) and Ms. Molly K. Williamson
Part 2 – Dr. Odeh Aburdene

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Ms. Randa Fahmy Hudome

[Ms. Randa Fahmy Hudome] Thank you. Today I’d like to examine whether or not the GCC has a comprehensive energy policy, not just in the traditional sense of the word for traditional sources of energy.  I’d really like to focus on something that is not highlighted regularly which is a renewable energy policy, that is certainly picking up in the GCC countries.

So with respect to cooperative policy on energy sources, of course four out of the six members of the GCC — Saudi Arabia Kuwait Qatar and the UAE — are members of OPEC. Collectively as Odeh [Dr. Aburdene] mentioned, they are responsible for almost half of the world’s oil reserves. Of course we’ve heard the latest news on cooperative efforts on gas production, a “Gas PEC” if you will, of which some of the members of the GCC are extraordinarily active in.

Of course there’s even cooperation between the GCC countries, the producer countries, and the consuming countries based in Riyadh, Saudi Arabia.  The international Energy Forum highlights and encourages cooperation between producer and consumer countries. So I would say in the traditional sense of the word, there is a sort of comprehensive energy policy. But is there such a policy when looking at renewable energies?

Now individually I can go through all six countries and give you examples, and I certainly will, of the strides that are being made within the renewable energy sectors in each one of these GCC countries. In fact, I was speaking to an official from one of the state-owned oil companies the other day and he indeed confirmed that this particular country within the GCC is aggressively pursuing renewable energy not only a policy but renewable energy programs, knowing of course that there is an end to the traditional sources, but also is a matter of diversifying their economy and certainly creating jobs.

So starting with the UAE, of course I think everybody is familiar with Masdar City, a $22 billion project that’s going to rely primarily on renewable energy sources, “clean energy city” if you will. As a target, Abu Dhabi committed to $15 billion or a 7 percent target by 2020, that means 7 percent of their energy to come from renewable energy sources.

Again, the United Arab Emirates is home to the new International Renewable Energy Agency, which will be an international home for many to come and learn about new technologies. The UAE, of course, was very famous, as Molly [Williamson] mentioned, for bidding out the 14 peaceful uses of nuclear power plants and did it certainly the right way.

In Saudi Arabia, they themselves have set their target at 10 percent renewable energy by 2020. Most recently they announced that $100 billion is going to be devoted to nuclear and renewable energy at the King Abdullah City for Atomic and Renewable Energy. It’s called KA-Care. And the KA-Care program is going to begin with rounds, two rounds of bidding, on solar, photovoltaic, wind, geothermal, and waste to energy capacity.

In Oman, Oman just announced that they are going to be investing in solar power technology. To start with some of the lower outputs at 10 to 50 mega watt demonstration projects with the possibility of working their way up to 200 mega watt solar power projects.

In Bahrain, they just recently announced, and this is news by the way from the last month, in the month of May, they just announced that the first phase of their national energy plan is going to generate energy from renewable energy sources and through an interesting consortium consisting of their national oil and gas authority, the Bahrain Petroleum Company and Caspian energy holdings, they are going to create a five mega watt solar energy project using technology from a U.S. company called Petra Resources. And so there is this conglomeration of international sources coming together to create a solar energy plan in Bahrain.

In Kuwait, the Kuwait Institute for Scientific Research has a renewable energy program and they just announced again that they are going to be focusing on a solar energy project in conjunction with who? The Kuwait Petroleum Company. So isn’t that interesting? And that’s going to be one of two phases that they’re going to be focusing on.

In Qatar, Qatar hosts what’s called the alternative energy summit. I likened it to sort of a Clinton global initiative but what they do in Qatar is they bring together the investors who are interested in primarily putting their money into renewable energy projects. It’s an international conference, doesn’t just focus on the Middle East but it brings a lot of the investors in the region to focus on the financial aspects of renewable energies. And also in Qatar itself, their science and tech park has focused on the development of technologies for some 60 different projects in the solar area.

Now, when you talk about funding, of course there’s no lack of funding in the GCC countries. Their internal funding coupled with the Islamic Development Bank, many of you may or may not be familiar with the Islamic Development Bank, but they are the development bank of the Islamic world, the 56-member countries in the Islamic world. They’re very similar to the World Bank, and they just announced recently that they are going to put $250 million into an initial project for renewable energies in their member countries and their member countries of course include all of those GCC countries. And they’re focusing on everything from wind to solar to nuclear.

Now what does the GCC need then, if they’ve got these renewable energy projects going? What is it that they need? I found it interesting that Ernst and Young just came out with a study where they noted, and they weren’t specifically talking about the GCC, they were talking about the broader MENA region, that there is a lack of a renewable energy or a clean energy policy that there is no framework for implementation and strategy. What they were highlighting was that auctions and tenders are no substitute, if you will, for a comprehensive policy and a comprehensive policy of course means legal and regulatory framework. And what this Ernst and Young study found was that it was clearly lacking in this region.

What could the GCC do, then, to create more cooperation amongst themselves in the renewable energy area? Well through my research, I have found that the GCC actually has something called the Clean Energy Business Council, where they bring together the public and the private sector entities within the GCC that are interested in working on renewable energy projects. Local, national, state and international integration of all of these. And what they do and focus on, is they’re trying to assist the governments in developing policy frameworks, policy frameworks that would not only encourage the development of renewable energy but would also help attract investors because as many of you know, what investors want is a solid regulatory framework.

I was even delighted to find that the EU and the GCC are cooperating on the renewable energy front. In fact, this month, two weeks ago, in Doha, in Education City the GCC and the EU got together to discuss a variety of clean energy projects, in research, in tech, in policy, in energy efficiency and carbon capture.

So the question is, then that leaves us with, what is the United States and the GCC doing on renewable energy? And I’ve researched and researched and if any of my colleagues are here from DOE I welcome you to stand up. But I haven’t found much. I haven’t found much.

I think among things that the United States does well are regulations, policy framework, and technology. And I believe that if the United States and the GCC did come together in some sort of initial conference, if you will, or some sort of formalized structure, the United States certainly can be helpful. And I would even argue sometimes we’re over regulated in this country, but that is one thing that we do do well is regulations and legal framework.

The other idea, and I certainly have talked about this before, is this idea of technology. We have incredible technology in this country. What we don’t necessarily have in this country is the financial ability to support not only the development of that technology but taking that technology to market. I give you the solar industry, one perfect example in America. I constantly get asked, “Why aren’t we using more solar here? Why aren’t we using more solar?” Bottom line is, we just don’t have the financial ability to develop that particular industry here in America. I would argue the GCC has the financial resources, the United States has the technology. Let’s get together and do more on the renewable energy front. I’ll be happy certainly to answer any of your questions on this topic and other issues.

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Ms. Randa Fahmy Hudome

Ms. Randy Fahmy Hudome is the President of Fahmy Hudome International (FHI), a strategic consulting firm which provides critical advice and counsel to Fortune 500 companies, foreign governments, media organizations, and private sector entities with business interests in the Middle East and North Africa.  She is also a member of the Board of Directors of the National Council on US-Arab Relations.

Prior to founding FHI, Ms. Fahmy Hudome was appointed by President George W. Bush to serve as the United States Associate Deputy Secretary of Energy.  Working with the White House and the Department of State and Commerce, she developed and implemented the Bush Administration’s international energy policy.  Ms. Fahmy Hudome was also the point person at the Department of Energy for increased advocacy on behalf of American energy companies seeking business around the globe.  From 1995-2001, Ms. Fahmy Hudome served as Counselor to United States Senator Spencer Abraham (R-MI).  During the six years she spent in the legislative branch, she was credited with shaping many pieces of legislation that affected U.S. interests abroad, including financial assistance to U.S. allies in the Middle East.

Prior to her government service, Ms. Fahmy Hudome was a practicing attorney with the law firm of Wilkie, Farr and Gallagher, where she specialized in the areas of international trade and corporate litigation.  She received her J.D. from the Georgetown University Law Center, where she held the post of Administrative Editor of The Georgetown Journal of International Law.

Ms. Fahmy Hudome’s expertise in international economic policy and energy has been sought by the U.S. Secretary of State, who appointed her to serve on the U.S. State Department Advisory Committee on International Economic Policy, and by the Secretary of Energy, who appointed her to serve on the U.S. Secretary of Energy Advisory Board.  Ms. Fahmy Hudome’s opinions on international diplomacy have been published in the Wall Street Journal, and she appears frequently as an expert analyst on NBC’s Today Show, MSNBC, Fox News, CNN, and Al-Jazeera.

For more information: www.fahmyhudome.com

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