not get that answer very clear also how dino quick. >> the exact language from the district court that said it would not have been unreasonable for north carolina senate to wait to see social the county came down. that is not actual evidence that is the district court coming up with a rational basis it dramatically expanded the scope of the of bill but that previous version of house bill 589 did include public assistance i.d.. post shelby they take that

out for a reason in the district court recognizes in his own words that he could have surmised. absolutely these are not actual reasons these are rational basis reasons. if you don't look for actual motives you commit legal error for the of all conclusion. so that troubling interplay between race and politics were looking to stop that political power that only applies to the diminishing case. so to use that same languages intentional discrimination to fence out

a portion of the electorate because of how they vote in is not constitutional and it is not just limited to a vote dilution case he also mentioned that this is now bidding to the result issue that there is no evidence of injury but that is not what the record shows are what the district court found. to talk about the hundreds of voters that were actually disenfranchised never because of house bill 589 because of precinct voting. and it is there throughout the opinion that with your question of pre-enactment knowledge of want to make clear that the record does show and we did cite in our brief that on all different

levels the legislature asked for data on racial impact during the post shelby consideration house bill 589 that is homepage 26. >> that could be requested for clearance quick. >> post showed me. yes it is a relevant point but it goes to the knowledge of which the legislature was acting. >> remaking an argument the legislature could not have requested? >> no. >> no bedpost shall be they did have to comply with section five but more importantly it goes to that they knew the disparate impact of every one of these provisions the decision to include, there are tons of election law provisions

every year the ones that were folded into house bill 589 post shelby were disparate impact on racial minority voters. >> were their separate bills dealing with all of these provisions in the opera but just not combined into one legislation quick. >> i am not sher that there was. there was a bill for same-day registration it could be wrong but there were bills wanting to eliminate registration or to cut early voting. >> how far did day advance what. >> when not with either house. >> there is an extensive amount of legislation material with that tracking.

>> one other error i do want to emphasize that this court in 2014 emphasized the district court committed legal errors with the number of voters that were disenfranchised and this court said the basic truth even one disenfranchised voter let alone thousands is too many and the record with the district court affect that he demonstrated there were thousands of voters our disenfranchised so sacrificing voter disenfranchisement with under resources and is not acceptable and this goes to a mr. peters was just talking about that the state board of elections may have said the training for august 8 or night before disenfranchise voters that

can be moved the contract could be approved if the federal court rules that these laws are racially discriminatory and unconstitutional the courts to approve and shows a there is ample time for them to get a remedy in place to vote in november. >> we will take the case under advisement and asked our clark to come down to brief the wires -- briefed of lawyers

>> women in america at today want to make sure they have the ability not to get pregnant because of the mosquito and pregnant women. >> today they turn down the very money that they argued for in may and decided to gamble with the lives of children like this. >> daniel defense policy and

program bills. >> all of these faults are vital to the future of this nation in the time of turmoil during the greatest number of refugees since the end of world war two. >> every member of this body every republican and democrat wants to see less gun violence. >> we must continue to do the work of nonviolence to demand an end to senseless killing everywhere. >> and to impeach their iras commissioner. >> two mpg the commissioner of the irs for high crimes and misdemeanors

>> we would like s.g. grab whatever you need and take your seats so we can get started.

>> good afternoon ladies and gentlemen will come to the washington institute and we are being webcast on the washington institute website and also recorded for c-span which may or may not be alive. to introduce myself i ms simon henderson the baker fellow from the energy policy program here at the of washington institute and also the co-author of this report energizing policy which i have written with my colleague the director of

research here at the washington institute and i very pleased that we are welcoming today and dr. cross -- tisdale a york and boston based expert. . . and some of its contents before i then turn to helima croft to comment on it. later on after i finished

engaging people in discussion i will open it up to questions. so patrick, dr. clawson. >> thank you. so we here at the washington institute are really interested in u.s. middle east policy. we are not particularly experts anwar energy markets are headed. and i will leave to dr. cross to comment about those matters. i would just simply say that u.s. policymakers have been surprised by how energy markets have turned out on numerous occasions in recent decades. and i would indeed, without stepping on anyone's toes suggest perhaps someone in the energy business have also been surprised in which the energy business has evolved.

but we start this project a few years ago when it certainly seemed that rising u.s. oil production was going to substantially cut into useful exports and the trade was going to become much more self reliant on its own oil production. we then suspended the project for a while after the oil price declines of a few years ago to see how the turmoil in the markets sorted itself out. i think we were as intrigued as many people in the industry to discover how quickly the u.s. oil producers in the shale oil adapted to the new conditions and how relatively robust u.s. production is. i personally have been in practice, in which technical

project and adaptation to the new market conditions have allowed u.s. producers to maintain quite robust production. i'm quite the optimist about u.s. oil production. but the main impetus for our project initially and as we started is so much of the story that we were hearing from foreign policy experts about rising u.s. oil output combined with stagnant u.s. oil demand that was leading to the united states to become more self-reliant in oil, the general store among foreign policy experts was that this meant that the united states was going to drawdown its presence in the middle east, and many people talked about the potential withdrawal in the middle east. indeed, we find such politicians as the president obama, saying in his interview in the authentic this spring that the

united states can be less involved, can be less involved in the middle east because of the rise in u.s. oil production. and we wondered if that was the basic lesson that should be taken. from these developments. not just because we're in the business of promoting an active u.s. policy in the and, therefore, that would be bad for our line of work, but more generally we thought that it would be worth looking at the questions about what effect these developments were having on the middle east. and what we found very quickly when we started talking to people in the foreign policy field and in the energy field is that this concern about u.s. withdrawal is really looking at small part of what is a much larger picture.

and that, in fact, this development of greater u.s. oil production was good for the united states and good for u.s. policy in the middle east. there's a reason for the last eight presidents of the united states have talked about reducing u.s. reliance on imported energy. and that is that with the united states, more self-reliant that strengthens the united states and just interest in a variety of areas including in the middle east. let me, therefore, start with the advantages for the united states of this development. most obvious is that it reduces the united states vulnerability to oil price hikes and it reduces the united states vulnerability in particular to oil boycotts. after all, that shocking experience of 1973 win without major oil, any major oil producers refusing to sell oil to the united states caused a

real scramble, and that just simply would not be possible under some of these scenarios in which the united states becomes fully self reliant on oil. but more generally the more the united states is self reliant on oil the heart of the united states can push, built these are producers without being concerned about their reaction. there's just a whole variety of issues on which the united states has tread on eggshells india with middle east oil producers where frankly we can push hard. and i particularly study iran and i can remember showing my age, the days almost 20 years ago when the united states started pushing hard about the iranian nuclear program. at the same time that the united states was pressing mr. gadhafi, remember him, in libya about his

activities of pursuing chemical weapons in particular, and the united states was also, played a significant, placed significant sanctions on iraq which had been a major oil producer. there were three major oil producers which at the same time the united states was pressing. that was will only possible because of the market conditions of the time 20 years ago. and that was very clear in u.s. policy discussions at every level, national city officers, with congress, ma you name it, that it was the ample market conditions, the ample supply of oil, in other words, which made it possible for the united states to pursue its objectives with all three of those producers and had a market conditions been tighter the united states would not have done that. and, indeed, we saw the when market conditions became tight that the united states became very concerned about the reactions of oil-producing countries, including some of our

good friends like saudi arabia. win saudi leaders expressed concern about u.s. policy in certain areas, washington got very nervous. and the stent to which the united states has to be less concerned about the reactions of oil producers in the region means that the united states can press harder about weapons of mass destruction. attorney can press harder about counterterrorism. there are a number of oil-producing governments in the region which have a good declaratory stance about not having their citizens country to terrorist groups but don't necessarily do much about. our kuwaiti friends have been most reticent to actually take practical steps to put into effect a nice sounding laws which they have on their books. we can press harder on that.

we can press harder on the saudis about inflammatory content of some of their teachings. make it clear, i'm not suggesting that the saudi government anyway support these terrorist groups but if you think there is something inflammatory content in some of their educational and other materials. and we can also press these governments in the region to engage in the kind of reforms we think are necessary for the long-term stability such as issues about democracy and human rights and open markets which have not always agreed with us. we have had to be reluctant to do, we have been reluctant to do very much at times with oil markets were tight. so the ample oil supply conditions and the high u.s. oil production work hand in hand to

empower the united states in dealing with this, ma in this region and that's a good thing. to be sure there are some -- in particular as the united states produces more oil, then the suspicion is going to rise in the region that we are going to withdraw from the area. some 26 years ago tonight when saddam hussein invaded kuwait, the united states became much more involved militarily in this region and that was a big shift from where we had been previously, and over the last 26 years this area has been the scene, the theater in which most u.s. military operations had taken place. they've had a checkered record. some of them have been smashing successes, such as the

liberation of kuwait, and some have, shall we say, not. but he had been an important part of bringing stability to the region and certainly many in the region have come to depend upon the united states, to depend upon the united states lessons over the horizon if not the actual u.s. involvement at the moment. as an important guarantor of security and important guarantor against external aggression in particular. and if countries in the region perceive, toward the united states is going to be pulling back they may do things which we don't approve of in order to try to prove their security situation. of course the nightmare is they decide to develop, our friends, decide to develop weapons of mass destruction and order to have their own independent state deterrent -- independent

deterrent. but even sure that we don't want to see these countries in the region deciding that they need to take independent actions that don't take into account washington's concerns. it's also going to be difficult to generate domestic political support for our involvement in the middle east if there is the perception that u.s. oil production isn't satisfying our own energy needs. after saddam's invasion of kuwait 26 years ago, then chairman of the federal reserve, alan greenspan, stated in the book that the iraq war is all about oil. not quite all about oil. but you get the idea. i think basically about oil. that was wrong then and it's wrong now. the principal reason the united

states has been involved in the middle east see to the matters has been because the middle east excels at producing insecurity, and that the insecurity does not stay in the middle east. and i find it strikingly extent to which the members of september 11 attacks seem to have faded and people forget what happened the last time we decided that we can turn our back on the security situation in a country where we've been strongly involved, mainly in afghanistan. the extremists did not stay in afghanistan, and i would say that if we take a look at the extremists in the middle east they would not stay in the middle east. and so the principal reason that we are involved in the middle east, the insecurity that comes from the region. and that point needs to be made repeatedly to the american public. we got this institute have on

several occasions organized events for advisors to incoming u.s. president and a constant theme when i was first involved in those, six presidents ago, was about sir, you may not wish to be involved in the middle east but the middle east will be involved with you. and that you, therefore, they decide to go the middle east but if you do it will be at your peril because the middle east would come back and bite you. and i would say a number of those presidents in fact campaigned on promises that they would reduce the united states role in the middle east, and we tend to forget, for instance, that george w. bush ridiculed the clinton team for the presence, the time and effort the president spent on middle east peace, and insisted that his administration would return to putting the great powers of the year primary concern is not

the middle east. and that in the early days of the incoming bush administration those who wanted to see an active role in confronting saddam hussein lost, and the internal battle were told no. really it's only after september 11 that things changed. so that's going to be a real problem how we explain to the american people why we should be involved. another problem that we raise which not as important is that the low oil prices which are likely to accompany low oil sales by the gulf oil producers which are likely to accompany a robust used in the production has the potential to destabilize friendly oil-producing countries if they don't take the necessary forms. in other words, if they don't listen to our advice about taking reforms and try to keep

on with the old ways of doing things, that old way will not work at some point they could crash and burn and that would be at risk of those regimes. so anyway we provide a number of suggestions which we think are rather practical for ways to maximize the opportunities and minimize the disadvantages from higher u.s. oil production. the basic theme is that americans need to hear about why the u.s. is involved in middle east. it's not oil. it's insecurity. the middle east needs to hear about how substantial this abuse commitment to the region. we have tens of thousands of troops we plan to have the for the indefinite future. and we have shown repeatedly willingness to bring in more forces we need. the world needs to hear that the united states can walk and chew gum at the same time with an active u.s. involvement in the northeast has not come at a price, either in east asia or in east europe, and the united

states can do all of these at the same time. and we also provide a number of suggestions about ways to which the united states should listen to u.s. friends who are, we should think about how our words sound to them so that we can be more certain that the message is getting across but, in fact, we are there ready to defend them if necessary. i know mr. trump has talked about how his native country want to see the united states making defense, and that's make more of a contribution themselves and he was saying, i was thinking about our friends in the middle east, most of which spend multiple what we do as a percent of their gdp on their defense systems. if we're going to apply that as a trump metric for whose merit, to whom deserves a u.s. role in

u.s. entity, to the east is at the top of the list. so with that let me turn the microphone over to dr. croft and i'll be fascinated to hear what she has to say spirit on that point you can do what you like but i'm the one in charge and the microphone. and i wanted to take the opportunity once again to say that we are here for this meeting for the benefit of those who are not physically here to review this work by patrick and myself on energizing policy, america and the middle east in the air of plentiful oil. this is a hardcopy version of it but you will be placed in it's available on our website both in a form you can read on the website and in a form that you can print off on the website. for some technical reason it's slightly different.

the website is washington institute.org. but i will now turn the microphone over to dr. croft. rethink and rewrite collyer actually earn a living. what's your perspective on this question? >> i loved the report i should because i started my tour in the u.s. government as an analyst covering nigeria. it was very interesting for me to read this report because it reminded me a lot of what i saw go on and 2003 with the nigerian election because that was a time when his government was very focused on non-middle eastern sources of supply. we are very excited about ginny. with unadjuvant cody ford million barrels of production by 2010 and we had a relationship with the government where we want to be i would argue very helpful to them. if they were not a resource rich country would we wanted to be

leaning in so much? probably not. i remember my formative experts as young analyst and we had a very questionable 2003 election, and the sort of pressure we felt as analysts do not be so critical of the nigerian government. to basically say, even the might of been rated with the opposition really have one anyway backs president bush went to nigeria. for people in a cheery coming out of that election bill dudley said look, we know he know that election was rigged and you don't care because you care about the oil. was oil a critical part of that trade we did with that country? i think a lot of us felt underlying the market was the need for the oil. when i cite task force another think tank which i will talk about, 2006 a report on energy and national security. that was one of the more junior

members of the task force. first there was a view which we talked in the report you would never be able to drill their way out of this. what we have to do instead of trying to increase u.s. production was manage our relationship with these producing countries. within the task force of deliberation they were real fights that emerged between people who said lots of experience we should be pushing countries i crush a much harder. we should be pushing countries like saudi arabia much harder on reform. other said are you kidding to we will never drill our way out of dependence. we had to basically have more of a transactional relationship and stop badgering russia about these issues. stop badgering saudi arabia about women, about the textbooks. what is the importance of our relationship? it was interesting now to think about how vicious energy revolution sort of changes dynamics. all i can tell you, i look at what happened in the 2015

elections, and the fact the u.s. government, the uk government, the u.n. essentially said to me sitting at the state you know deal with this election. we know you are intending to try to stay in office but if you do that we will raise the consequences for you. travel bans, make it difficult, asset freezes. we would like you to leave. i was talking to one of my former colleagues and said i could not have imagined this had been the case in 2003. we did everything to basically that administration to see. whereas now we care about the election. we care about human rights. we care about governance issues and is time for you to come. i think there really is a factor of the american energy revolution. and particularly for a country like nigeria of those with a gross display for north american production. it's the light sweet barrels. we used to take 10% of our imports from nigeria. now we take very little imports. those of the barrels that have been displaced.

those other countries i think that been hit hardest because they not only get hit by price impact, they get hit by loss of market access. everybody has to sort of scrambled to access the chinese and indian market and it's a crowded party. those are not just middle east but there are some of the real net losers. that's the benefit. i would've loved to been the analyst who believed in certain values. to take a tougher line on the government. in terms of drawbacks for more i sit in the market, the biggest thing we're concerned about is what other economic dislocations caused by this type of price decline? government essential that after spending spring and significant deficit in this price about it. for the wealthy gcc countries have ample sovereign funds and they have substantial safety nets and shock absorbers to do with lower for longer. they're having to deal with it through renewed debt issuance but if you look at this year, it's been a block buster year.

34 billion. that's expected additional 15 billion. they can borrow but at a certain point it's going to become a question of how much borrowing do you want to do is what is refinancing look like a couple of years if we're in this nude price of five? what can you do in terms of structure forms to lessen your debt load? how much do you want to draw down your reserves the these governments let's be making choices. also a little bit of skittishness i can tell you with the whole issue of if we don't get the recovery, will some of these sovereign producers go on going to have to go back in terms of their sovereign wealth fund investment? becomes questions about are the could you be making the same type investment in real estate, and european equity markets? those are things people start to think that they get concerned about even with the sort of richer countries. but for the poor produces every niche is a catastrophe this

price of furniture i look at a country like iraq and i say they been hit every which way between isis, the oil price apartment, the political problems in baghdad. so for them they basically have very little options but to take on borrowing from the imf in order to try to meet their payroll. from a market perspective is what is so about the north american energy revolution but they can't provide all the barrels needed if nobody else is growing. if you look at global decline rates for the next couple of years, we get a large inventories and if we don't have other sources of supply come on the market in the next three to four years, then the market has tightened. the country i'm most concerned about is iraq because iraq was supposed to be 40% of new supply coming on the market over the coming decade. it was supposed to grow from 4.5 million barrels to 8.5 by 2035.

iraq is truly a low-cost producer. the question is if that government doesn't have the money to make the investment in energy infrastructure and international oil companies themselves are facing tremendous catch cats themselves. i meant to look at hundreds of billions of dollars in foregone investment, they aren't willing to deploy much capital to places liklike iraq. legitimacy as a combination of this low price environment, other security issues, is iraq me to underperformed in terms of expectations of future growth? i look at global in the only countries that are continuing to put rigs to work on a significant scale are the gcc countries. venezuela and nigeria, these countries have all seen dramatic reductions. we have had shoving up deepwater projects. to me going forward i am concerned about also like how does the market remain supplied

over the medium term if north america is the only, only place that is growing? i think there's resiliency of u.s. production. i think beyond the technological innovations and the dynamism of these companies, the fact that he was capital markets remain open to these companies didn't have to bankrupt these that were expected. by to get if capital markets remain open, it's all these conditions remain in place i think we will need those other producers to come on. i think that is something we are not really thinking enough about. again what if the other producers simply can't grow their production in this price environment? >> thank you very much. let me just come back to you on this. could you explain to us how far ahead you look? and also, and remember, most of

the audience is essentially a lay audience. there's all sort of talk that oil is going to be a declining fuel. it will be replaced by something -- what is it going to be replaced by and what is a reasonable time horizon? is in our lifetime, our children's lifetime, our grandchildren's lifetime? >> for the next decade i think we're still going to be talking about dependent on additional fossil fuels. i think when you get to sort of long range planning departments are national oil companies, they're the ones that are getting increasingly concerned about renewables. not just the efforts being taken and western governments. they are very focused on what if china is serious about environmental illnesses. what if battery-powered cars become cheap and basically mass-market? supranational compass in the

middle east, the long range plan of what about that. i don't think we are thinking of the sort of three to five year horizon but i think for the oil price situation, this becomes very interesting. for now we have very large global inventories. five year highs. even if we have a destruction, because we're not that oversupplied anymore insurance of how many more barrels on a daily basis are not find a health? we really compressed that. the biggest issue that's choking the oil market and keeping the prices in this sort of low '50s environment is we have very large global stockpiles. over the next year we think those will be worked down but we don't think we will get the 65 because of those stockpiles. once those stockpiles are drawn down, and i think he becomes a question of how much u.s. production can come back. but also again the issue of u.s.

production plus what other barrels? and i think that's what people are more concerned about sort of two, three, four years out where things could be getting a little bit trickier in terms of the oil market, and that u.s. production even if it comes back will not be enough necessarily to prevent prices going to sort of 70, 75. maybe 100 is maybe 100 is offered a big if you have something that happens in patrick sheehan first, that can still be back on the table. i think right now geopolitics, there's very little risk premium in the market but things can always change. >> patrick, could you explain a little how we approach this, the unknown? and essentially we chose two different visions of the future, and we rather hoped they would either be one or the other or somewhere in between.

it could of course more quickly be outside those limits but for our purposes to draw some line somewhere. >> truly humbling to take a look at someone else's which was done in past forecasts. what we discovered is that repeatedly over the last 20 years when noted expertsfrom the international energy agency or the is governments energy information administration or companies like bp or in financial agencies like imf had been forecast of what they expected to be even five years out much less 10 years out, that repeatedly that when they present a range of forecasts, the actual outcomes outside of the range. i did some work for one u.s. government agency which estimated most energy forecast turned out to be outside the range of what the energy expert

said was the wildest possible range. oops. so it's interesting that lots of these agencies and companies are now presented much wider range of estimates. by the way, it's not just u.s. production which is unknown for evil. there's lots of this room is about where demand is going. where demand is going in not only i in the industrialized wod identity and thus realizing world. and if so when you put this all together, what seemed to be sort of a consensus, which i said in the past has been wrong, but that would seem to be consensus, is that a plausible alternatives range from want to which united states can just import about a third of its oil.

and by the way, i should comment that we found it most useful to look at oil in its broadest sense, that crude oil is only one part of oil and is increasing a smaller and smaller part of u.s. production. so we are looking at everything from biofuels to natural gas liquids to crude oil. so there's one scene in whidbey which attorney continues to import for the indefinite future about a third of its oil. and yet there's another scenario which seems to be quite plausible in which the trend becomes every significant oil exporter. i don't just mean the u.s. exports of oil and imports other your timing the united states is a net oil exporter on the order of several million barrels a day. so that's pretty broad range. we said that policy, u.s. policymakers when they are think about where u.s. policy be going over the next 15, 20 years,

ought to a set of policies which are sufficiently robust that they make sense in either one of those two kinds of circumstances. because they may not know until we get relatively close today, which of those two circumstances comes back. and if you look here at some of these charts which show just how quickly the use and production ramped up, things could change that quickly again. and so we should have a set of policies which are robust enough to either of those situations the and by the way, into oil industry they say that you were for low oil prices is low oil prices. if the prices stay low long enough, -- been the prices overshoot and go high end of the prices stay high volume of the

overinvest and prices come down. that's true but many of the people that we spoke to and many of the forecast look at thought that actually the advancement probably matters as much as price, and that there's an awful lot of what has happened to the oil industry in the last decade has been driven by unexpected technological advances. and that if you go back a decade ago, a bit more now, a general feeling was that the technological advantages that we're going to see would be ones that would make it possible to produce from oil sources not yet available from deep water offshore oil, and that major oil companies international companies would be the ones spearheaded this to the bitter what's happened since then is we've seen some very major projects that have not done well. i mean, when you look at the

record of the $170 billion spent on natural gas in australia, it's daunting. we have one project alone with 17 going to overrun. and these years late. that's nothing compared to the project in kazakhstan which is a $30 billion over budget which produced for one month in 2003, although less, in 2013 the forecaddie shut down because it wasn't working. and which now after $17 billion fix may come online this fall. so the technological advances we expected 10 years ago turned out not to happen. and ones which we did not expect, especially in production of cheap oil but also frankly in the dramatic improvements to deficiencies in the u.s. automobile have taken place.

>> helima, with your professional responsibility is to monitor opec and joint or otherwise of this is going to opec meetings. how is opec responding to this? and how to split up opec in their responses? and are we heading towards the end of opec or a new opec? >> i always talk about the sort of some enthusiasm as a winter discontent of opec. last spring we forget, if we think about sort of may 2015, we were looking like we were headed back to a recovery in oil prices. it was in the '60s. i remember going to the june meeting, a similar before the meeting, and then they had a seminar and then the meeting. hourly job done -- the future

looks bright for corporate were in the midst of demand driven recovery. speaker after speaker talked about 70 by year-end. they thought they had done enough damage to shale coal of the they thought that demand picture was inelastic. if you look at demand last year, it wasn't the problem. demand was that a five year high. cheap oil, certain companies will back up their trucks. so everyone was very optimistic, particularly from the richer countries. i remember there was a poor opec panel which venezuela, ecuador, and i chewed and iraq. they were all passed was fair price for oil and all said 70. i wondered if they were told by the rich gcc countries to say 70 was the price they were aiming for 70 doesn't work for some of these countries but still there was this consensus that we turned the corner. and you get to the december

meeting and like the mood is just soured. i don't think the press covered just how disruptive that meeting was. you had a situation where the venezuelan opec representative was like pointing at the qatari mac sync if we don't take action we will see the '20s. the gcc countries are dismissing that everyone walked out sort of grim faced the i remember in the press conference how badly the opec secretary-general. we were looking at the document sank the snow collected seat anymore with 32 million. where's the ceiling? he said we couldn't agree. so we were all just produced. you saw a dysfunctionality in opec. fast forward to this meeting etiquette i think it was like last summer, rerun where we had the recovery to 50. everybody was saying we've turned the corner in terms of prices. we are on an upswing, but we need higher price to incentivize

the price globally i know what to get out the price target of people were talking of moving eventually into the '70s. we are now back getting a bit of reversal because of this gasoline glut we are seeing. new concerns about demand from china. i'm pointing what the december meeting will look like if we are not want to get on the path to recovery. but we have tremendous disparities within opec between gcc, and i called in our published research the frazzled by. libya, iraq, nigeria, venezuela, even al judy. they are facing such a difficult price situation in terms of their deficits and italy to fund essential services. so i think that's the tension between countries that can ride out the storm and these poor producers who are basically saying you have to come to our aid and sort of appealing to the richard gcc members who are essentially saying we are okay

for now. i think that tension will only increase if we don't get that recovery that we anticipate this spring. i'm not sure i was the opec split at the u.n. was excited by the election of the new secretary-general that they could come together and do something. i think these tensions as long as we stay i in this muted price of vibrant, attentions are going to be there. it's an opec driven by saudi arabia and other gcc countries. and the poor opec countries are just passengers at this point spirit the saudi odd policy to the extent it's coprincipal, understandable is to retain market share spirit and it's a brutal battle for market share. in terms of, the return of iranian barrels did not make the situation better. as i talked about earlier, what happens with u.s. production and you don't need as many barrels come into this country, what it causes is a brutal battle to

access the chinese market, access likely for oil producers expanding, indian market. but you see aggressive effort to undercut in terms of prices, to place your barrels of there. we have on any given month saudi arabia topped by russia, the biggest supplier into china. we've had months in india or nigeria has come as the number supplied into the indian market. not the perfect barrel for indian refineries but if you were willing to discount your gross to such an extent, you will get a home. even if you think about the policies china's pursue some of their client states, when they do more loans to venezuela, the way those loans are repaid is through barrels. they get locked in market access to pursue gets locked in market access to china when they given a facility from china. it makes the battle for the remaining market that much more intense the i think that's a key

driver of disunity. not a death spiral but it is a very, very difficult outlook for these producers going forward, given the fact that they are pushing barrels into smaller number of countries. european demand, they are not a driver of demand growth. it really is china and it could easily india, the two biggest markets the it's a crowded par party. >> patrick, we are in an increasingly ironic situation. the experts have always said the dependence of the united states on middle east oil has bit exaggerated, and these days it's even more exaggerated your and so to what extent do you think the u.s. should share its

responsibilities for a leadership role in the economics or the politics or the geopolitics of the middle east with other countries, and 80 and china have been mentioned as great markets for middle east oil. shouldn't we be working together sharing those responsibilities? >> well, one set of responsibilities is the international agreements on the defense and national countries to maintain strategic research. there's been discussion about involving india and china. at the moment the charter of the national energy agency makes it open only to oecd members but there's been a proposal to open up to india and china. interestingly enough the chinese in response to low oil prices have been constructing a very

large strategic petroleum reserve other plan. it's the second largest in the world after the united states. so for their own, for reasons they decide to have a large reserve. personally i think there would be much merit in resurrecting the idea of bringing them in to the iea, and, indeed, conceivably what we are to do is strengthen and expand the role of the saudi base our decision called international energy forum which is a small organization that brings together both the consuming and producing country. i think the chinese would find that a more acceptable mechanism to cooperate internationally rather than in the international energy agency that is so dominated by the advanced international countries that china is suspicious about. so that's one set of issues about the strategic petroleum reserve. there are some other associate

instances. for instance, data initiative called jody, joint oil data initiative, which is trying to improve the transparency of production consumption and expand reserve numbers. and the cooperation of the russians and the chinese has been so-so. but it's worth persevering and efforts to make jodi work better. god knows the situation is better than it was five or 10 years ago when we had no clue what was happening in those countries, consumption or demand-side. but then another whole major set of joint responsibilities is protecting sea lanes, communication. and their the activities of the

chinese in the south china sea's should give us cause to any notion that we should be encouraging china to put a more active role in protecting sea lanes that's mitigation or shall we say the chinese of you about the high seas rather different and that of the united states and the major maritime powers whose attitude is long been that we should have the water should be open to everybody. and that's not been the focus of the chinese, sort of attitude well, you know, scores of economic zone the damned. if it's ours it ours. i don't think we want to encourage that. and so i would certainly accept that it's a little on the united states navy is protecting the feelings of communications that are vital to chinese industry but i would without the u.s. navy protecting it than have the chinese do it, thank you. spirit i will be opening up to

questions in a few minutes, but, so get yourself ready, and there will be a microphone which will come around in due course. but one more question first to helima croft. i looked at the price of oil this morning. it and i think drop a bit. there was a chance that west texas intermediate might fall below 40, which is, mean something to the market. i'm not quite sure what that means much to the rest of us. what sort of political offense would actually cause the oil price to zoom upwards, spike upwards? they used to be a point then, add in the middle east, the price of oil went -- but that no

longer applies. this morning's "wall street journal" has on the front cover a picture of a bloodied kurdish fighter in the iraq you will field where he had apparently successfully attempt, successfully countered an isis attack on the oilfield. and last week the head of the iranian revolutionary guard made a threat to close the strait of hormuz. the market shrugged it off. and so, you know, what should we be scared of? >> i think from a market perspective this is where again ample u.s. production that we sing but also the global inventory being added by guy. people might say supply and demand looks like it's come into balance because we've had some disruption. nigerian production is now down by some accounts six or

700,000 barrels because they've had to return to militancy. we have the canadian farce over the summer but people say local inventories our five year highs. we can sustain lots of disruptive events. things that might be bad for messages perspective in the middle east if the oil looks like it's a risk of significant scale, just written off. insurance of iraq, you're right. there was an attack in north iraq. market shrugged it off. if you isis show up at downtown south bend is something outside of this illegal i think the market might pay attention, though we had isis attacks on libya energy infrastructure. markets he wrote that off. i think we need to see something dramatic. i think it would be to be, i almost hate to say this, in terms of something potentially in saudi arabia. the market would pay attention spent tell briefly what -- >> then you miss that was on,

you've written on this come on the world's largest oil processing facility in 2006. and so we have something significant in saudi arabia, the market would not shrugged that off. but again like i look at the fact that i have nigerian production down by six or 7000 barrels, which has brought is basically into the market balance. venezuela and production looks like it's no almost a structural decline because of lack of investments. venezuela will be down several hundred thousand barrels year on year. oil service companies are pulling out because of nonpayment. so i look at the situation and see we have a host of producers that are very challenged and yet it had not huge price in fact i think in terms of some event we would need something at this stage quite dramatic to get the market excited. >> i participate periodically in

sizing exercises. how large a strategic the silly we need. this spring when we were discussing this, it's really kind of hard these days to come up with a sneer that's going to require the use of future petroleum reserve, except for significant instability in saudi arabia. and so it really is simon's expertise about who's going to be the next king of saudi arabia and how the royal family is doing, that determines how large strategic reserve we need. if you want to ask simon what would it take to really cause an oil price spike, it would be if things go haywire in the field of studies so close the, many saudi oil and royal family politics. >> is that a question box.

>> might initial response to that would be that curiously much of the uncertainty in saudi arabia at the moment is to do with leadership, entity with the islamic state. and to that extent it doesn't impact on oil. the ingredient which impacts on oil is what happens in the eastern province of saudi arabia which is where all the oil reserves are in the most important oil installations are. and these are vulnerable company, they are defended and protected but they are essentially still very vulnerable to attack or sabotage come into ingredients their, one

is what the local shiites of the eastern province where there are local majority do with our without the instigation of their coreligionists in iran, and also whether the islamic state in its attacks on, in the kingdom choose oil targets. and as you mentioned a few minutes ago, saudi arabia has got a lot of oil at, and infrastructure is stretched over many hundreds of miles but there are occasional bits which are concentrated, and there's one particular place as you mentioned which suffered some sort of cookie but is, in fact, spelled a.q. a uip. it's word processing plant for

the oil sort of the first sort of clean of the crude before it gets shipped out. most of the saudis oil production goes through one place. and if you can get, if that place, then this could really impact on saudi oil exports very quickly. and the last time in 2006, this doesn't look good and there's -- unless somebody moves come anyway, the last time this was attacked in 2006, it would have been substantially damaged if the chap who was driving the truck with the explosive on it have made a better calculation of where you need to press the button to destroy the installation, as he sped along

underneath it. he failed to destroy the installation. he succeeded in killing himself. anyway, that increase is the saudi story. but we are no not open to questions. and again for purposes of our webcast and c-span, we are here talking about this publication which is written by myself, simon henderson, and my colleague on my right, patrick clawson. and it is energizing policy, america and the middle east in an era of playful oil. and we are joined today by doctor helima croft of rbc capital markets whose of very great experience on oil, opec and many other things. so questions?

there was one in the middle, and then one over here and that i will come to the other ones if i can remember whose fingers i spotted first. >> those of us became of age on issue of oil in the middle east in the '70s and before remember how from a geopolitical standpoint as patrick has pointed out this was a critical region. basically the case was made that if you cut off oil coming to the straits of hormuz they would cause a global recession or worse. it was a big enough cut off. which the oil price spikes reflect because that's what it could mean for the global economy. so my question is that, how dependent today, not in the future, today is japan on oil that comes to, from the middle east broadly how dependent is your on it? if it were cut off for an extended period. i know it might not be possible

because of military bases but if it were cut off for an extended period what impact would that have on the global economy? would cause the recession? and then the last question, europe has not embraced as much as the u.s. as the new technologies of fracking and other oil extraction. what is the potential in europe and can you give us a sense, this is really transit, to you, how much has europe been getting from my perspective act together on the? >> a couple of comments. the world economy has gotten more used to price spikes in a variety of commodities over the last 40 years. the great moderation was the face becomes used to describe the previous period. we are not in that any longer. the effects of price spikes are no longer shocking to people as they once were. we adjust to the much more. an interesting aspect of the u.s. sat tight oil revelation is

that there are an awful lot of producers who can't expand output quickly. not a matter of weeks but certainly in a matter of countless than a few years, that there could be a dramatic increase in u.s. oil output if prices went up to 100, $120 bill. post is hard to see an extra 2 million barrels a day before too long. world has gotten a lot more strategic petroleum reserves that used to. so it's much less of a choke point than it once was. but it certainly is the case that if there were to be him and also blocking the street for bob ritter time is no easy task. it's one thing to block it for a few days. it's another thing to try to block it even for some months.

so -- my friends at the energy department are not happy to the extent with which the blocking tried scenario is no longer an easy way to defend this. yes, there would be some real disruptions. i nothing like what it once was. and also, by the way, a lot of what would happen in the u.s. economy is that those of us who live on the east coast or west coast got a lot more for oil and the good citizens of north dakota would be sitting pretty. aske..

... >> france has been a very interesting case because apparently one of the most prolific basins is under paris and after josh land the french were not trying to develop that resource. looking at southern england as well but it seems right now it is uniquely american. in latin america, they look test basin over the border into texas and into mexico and how to develop that. one of the things that facilitated the u.s. development is private landownership and not necessarily the case in latin america and the crime issues around mexico. argentina is another one but it wasn't a great place for countries to invest because of contract problems.

there is some new excitement of better contract terms and giving incentive to go in there. but not great geology and landownership is what is presenting growing. one of the scenario in the middle east is like armageddon and that is what happened if shale goes global. i heard a scenario pre-price collapse in a gcc country, a central bank governor, he was worried in the spring of 2014 saying yes, we are sitting above a hundred but what if iraq meets or expectations and shale is a global development? we will not be able to control the price environment at that point. maybe this is too arrogant because we didn't understand the full development of shale but thus far it is a u.s.

development and the cost to produce shale is 60-70 break evens. we were not thinking about 30-40 break effn. we were not worried about it being a global development and that central bank developer said were you not the house that said it will be expensive to develop, high decline rate, and look what we are in with a million barrels a year coming out of the u.s. in terms of growth. so who is to say china is not going to be able to deal with an infrastructure issue? who is to say they will not be able to develop this recourse in europe there is not going to be a breakthrough that will facilitate that. and maybe argentina will get their act together and what if iraq meets their target. for us, this is our national security. i think that is what does scare them. what if you did have this become a global development.

for now, it is a u.s.-only but things can always change. >> it is heavily depended on the middle east. europe is different because they are sourced in middle east and russia. but for asia it is a largely middle east story. >> it seems to me what hasn't been discussed here and that is beyond the region of u.s. policy and that is domestic consumption. you know this is an issue in saudi arabia but imagine an economically liberated iran, a more rapidly developing indonesia. more countries consuming their own output.

what extent is that a factor? >> the hidden price of the saudi arabia demand is was one of my favorite stories. this is the question in terms of ability to maintain high level of exports. if your domestic consumption is growing, and in the summer your demand may spring 6-7,000 barrels because they need oil for power generation. there was a report out and this shouldn't be the base case but they warned if saudi arabia didn't fix the problem they would be a net importer by 2040. the saudi arabian governor invited the author to come to the kingdom and talk about the report and usually if you say something critically that may not happen. that is why they are pushing ahead with gas projects aggre aggressi aggressively. when i talk about the rig counts in the gcc is lot of that is for gas. they are focused on developing

gas assets so you don't have to use so much crude for power generation. will that be enough if you don't deal with the subsidy issue? how successful are they going to be in terms of subsidy efforts? we saw them raise the pump prices in january overnight but as they go deeper into reform efforts are they going to get push back? we saw push back with the water. and in kuwait people don't like the idea of having social welfare and safety net touched. i think it is going to be an interesting challenge as these governments become more cash strapped. how much can you ask the citizens to pay for upkeep? it is going to be a problem in terms of how much they consume still. >> just a quick comment on that. you know, the deputy oil minister of saudi arabia has

been on this big kick to increase efficiency with which energy is used in saudi arabia and arguing it will be difficult to sway the minds and i think there is tremendous possibilities with insulation and so on for increasing instability. it is a question of how much oil is being burned to generate electrici electricity. every country in the region has an ambitious program to end the use of oil for electricity. this has lead to some rather interesting situations. the most recent eelectrlectrici

plant in dubai is using coal. there are little markets like hawaii where oil is used to generate for electricity and i think that will be phased out over the next decade and that will make quite a difference in the saudi arabia oil consumption. if you have 11 million cars on the road in iran produced with good standards oil consumption drops because they will not have the dreadful cars with their current oil consumptions. the more people can replace the existing car fleet in iran with a new fleet the quicker the oil consumption will drop.

>> i think this might be the time when i ask the question of the saudi arabia where rare hazardous comments have been coming out in recent weeks of the kingdom looking toward a post-oil future which to many of us seems a contradiction in terms and absurdity. is it? or what is happening in saudi arabia? >> one of the things that everyone is really watching from an investor standpoint, what gets people in my universe excited is the saudi arabia potential. everybody is excited about the potential of a public listing giving the reserves -- what it would mean in terlz of evaluation. that is where i find myself having to push back the enthusiasm and i think there is

a difference between the skepticism you have in washington versus the excitement in new york and london saying i used to work at the kinsey and it is going to overhaul this and we talk about where you can lift in terms of requirements? can you lift in london? may have to be the asian market. when you talk to people in washington you get more skept skepticism about the reform network. but investors say it will work because it is largest mckinsey contract and they will be able to pull it off. maybe i am a little more, you know, niek a nuance because i remember being at the economic form right before bella became king and the story was the economic cities, the loud pumping music talking about this

will end saudi arabia's dependence on oil the first time. i think we will have to see where they go in terms of reform but i think some of what they talked about seems to be tremendously challenging in terms of getting the bureaucracies. i look at the iop issue and i think it will be scaled back from what is being talked about now eventually. >> there was a question over here. [inaudible question] >> i am a little concerns some of the questions may lead to false sense of security about where we are on oil. i think we have to remember the united states last year imported a quarter of the oil we used on

a net bases and that is higher this year because the were introduction has fallen about a million barrels a day. in the meantime, the middle east is producing a third of the oil used in the world, the highest level since 1975. and the longer that prices stay low the more we will rely on the middle east because that is where the lowest cost oil is. i think it is very useful to have this work out there and think about the middle east. we look to be in an era of plentiful oil at the moment but that can change quickly. we cannot forget about the middle east as the place woo have to worry about our energy going supply forward because oil is not going to be replaced overnight. the markets look good now but that can change quickly. >> that is why i think further into my look at iraq.

i look at iraq like that is north america alone, even if we get a rebound in terms of u.s. production, and if capital markets, i think it is very key by the way, if capital markets remain open to u.s. producers and that the snapback at some point, we will need other projects to come on. i phoenix on iraq because again no other country was supposed to supply as much as iraq and 45% was the projected contribution of iraq and if iraq und underperforms i think it has important implications. who else is growing? it took $100 barrel to get the u.s. going but no one else is growing at $100 a barrel. the challenges come over the medium term and even if u.s.

production comes back we need those other producers to come on. >> a major focus of the story was saying even if it wasn't for the oil we have reason to be involved there. there is an insecurity there that is it is important to be involved there whether we or the world economy is using the middle east oil. but you are right. the middle east oil is going to be an important part of the economy for along time to come and because the united states is going to remain in planet earth we are going to be affected by what happens to middle eastern oil and how it affects the oil prices without a toubt. that said, i do think there are a number of things which could happen that would in fact make the oil supply situation or ample at the moment. i am entirely agnostic as to whether or not the price of oil,

if we get together in five years, is going to be about where it is now or it is going to be significantly higher or significantly lower. i don't know. i do know that wherever it is the united states is still going to have important security interests in the middle east that will lead us to want to be very involved in the middle east no matter what happens to the price of oil. >> and patrick, if i could ask you at this point to give us some sort of assessment about whether sanction on oil, such as there were on iran, are effective, worth repeating in other places, or on the whole a poor experience? >> well, i have written quite a lot about the sanctions in iran but the sanction och other countries as well. but the question about sanction

working depends on greatly what you expect them to accomplish. >> we are referring to the invasion in -- the iraqi invasion in kuwait. and jeb webster, four days later, the head of the cia, was one of the few people following iraqi oil, which at the time there were very few of us, and we had a session about if the sanction on iraq would work. what we all agreed on upon was if you want to inflict pain an saddam, send a signal that we really care and are serious and thinking about doing something militaritarily you can expect t accomplish that. if you think the sanctions will have saddam pull out of kuwait good luck. not likely. but you can accomplish certain things. the sanctions on iran -- the obama administration and for

that matter the bush administration before it, it major thing that president wanted was to get iran to come to the table to negotiatea abou the nuclear deal. there are many convinced that the real goal of sanctions was about something else like bringing about regime change in the iran. but for both president s of the united states the goal because to get iran back to the negotiating table and that worked. so the objective the president had in mind was accomplished. now, whatever you think the nuclear deal is a different matter. but the sanctions were certainly a factor in accomplishing the objective that the president looked to them for. >> you have views on sanctions, helima? okay. fine. there was a question at the back first.

>> i have a question concerning the energy security and the competitiveness in regards to the united states involvement in putting an end to the hypocrisy which is the underlying cause for the seeking transparency and a stop to the organized corruption. as the oil competitive market increases with bribery being a part of this in your view the competitiveness will have more aggressive on the market than what has been described until now. >> well i would argue a lot of energy security comes from having energy from a wide

variety of sources and that oil comes from a large number of countries. in order to get that it is important to get the environment under control. even a function of democracy like brazil, if it is has a poor business environment because of blatant corruption and energy nationalistic policy. the u.s. has an interest in encouraging a good business environment in those countries.

the question corruption -- corruption hurts a good business environment. but let us recognize that if a government wishes to send out the lot to a royal lady there is not much we can do about that. that is not the kind of society we want to live in but it might be one oil companies work totally well in. >> in terms of countries i have covered like nigeria. when it depends on take taking the resource you can talk out

more about the corruption. i think there was a tough line taken on corruption there in a way we may not have taken the tougher line when oil wasn't abundant and we needed that oil. so i think the lower price environment does enable more attention to governance issues. and in a country like nigeria, where you have corruption particularly where oil-producing states tonight see the benefits of production. you get armed militants and have shut-ins and that is the high government level with the state governors becoming an issue in terms of actual production. in certain places the greasing of the wheels makes an environment that is relatively stable for a company to operate in but countries like niagara, that level of corruption really facilitates instability which

was causes production to be taken off line. >> energy research foundation. i really enjoyed the presentation. just a couple points. i think it is going to be closer to 50 than a hundred. scott chet feepd, the ceo of pioneer resources, said expanding -- secondly, we had a massive cut -- [inaudible conversation] >> the real cut is much less. what i am interested in, patrick and simon, let's just assume we are going to have a price up to 50. what do you think it does to regional rivalries in the gulf? who is likely to emerge as the

power? how will the gulf producers sort it out in terms of their own interest in the regionnalingior? >> i think bush look what happened across the water in iran and for all we make fun of the talk about the resistance economy in iran, after the last decades, iran has moved to diversify its economy. they were trumpeting custom figures for their year that ended in march and the figures so iran's total imports were less than its non-crude export. that is cheating a bit because the non-crude export includes -- still, the fact is when you have 49 billion in imports and 42 billion in non-oil exports it is

an indication iran's economy is developing and they are exporting automobiles and steel. because the iranian automobile industry is in crisis at the moment it is doing well and only 940,000 cars a year instead of the 1.4 million it used to produce. but it is not quite like previous but if over the long term we have a low oil price environment iran can catch up. whereas a place like iraq is systematically undercut every agricultural production, indu industrial production has been undercut. so they are completely dependent on oil. that is why it was big to see

saudi arabia develop something. it is not just iran. it is in dubai as well. but iran is -- but saudi arabia is the leader. >> we will take two more questions. >> i will have a two-point question, if i may. the kingdom going back to opec, the kingdom is a driver and everybody else is a passenger. how long can the saudi arabians afford to press on the gas with respect to economy and the national reserve? and finally, the oil market will remain saturate forked the next three years and after that three to five years the demand will boo come higher? >> in terms of the next year, we always say there is a two-step process of moving prices to 60-70.

pioneer is one of the companies with the best balance sheet in the best acreage. every companies operating there are not in pioneer's position. but in order to get the 65-70 first you needed to get rid of the overhang. the immediate supply and demand overhang which was over a million barrels. we think we compressed that. we have high global inventory that needs to be worked down. we thing next year we are muted because we have have to work off the inventory. only then do you get 65-70 without disruption. but they have ample effects. they are not 784 billion but down to about 560 but they can borrow. they have several a year they just wanted to use the reserves and they could basically keep going.

i think it is a combination of some saving through reform, increased borrowing and trying to ride out the media recover. i don't think they want a hundred again. i don't think they want to go back at an a situation where you bring all this u.production bac online. what i thought was different, at least from appear optics standpoint about the last opec meeting, the new saudi arabian energy manager went to visit delegations and essentially said we all want high er prices, we all need hire prices, we feel your pain and are in this together which was a contrast from december where some gcc members were saying i regret nothing going into the meeting and we are fine. i think the saudi arabians did a good job keeping poor countries

in the tent. the fact the venezuela oil ministry was happy whereas in september they were screaming. he said there is no crisis there also so you cannot really trust him but they managed the optics better. >> this is year eight of a global expansion and they really last that long. if we had a significant global downturn we could see a drop in the global oil demand that would be considerable and that would affect the price. >> well all we need to do now is say thank you very much. in case you have forgotten, this is the publication we are trying to promote today. energizing policy in the middle

east in an era of plentiful oil. i am simon henderson and this is patrick. it is available on the washingtoninstitute.org. thanks also to dr. helima craft for her part in the discussion here. thank you very much. [applause] digital copies are available also. if you would like to pick one up, please, do. >> with the house and senate returning from summer break next week join us at 8 eastern. we will preview four key issues. . federal funding to combat zika

virus. >> women in america want to have the ability to not get pregnant because the mosquito ravage pregnant women. >> but today they turned down the very money they argued for last may and decided to gamble with the lives of children like this. >> the annual defense policy and programs bill: >> all of these folks are very vital to the future of this nation and at a time of turmoil and a time of the greatest number of refuges since the end of world war ii. >> gun violence legislation and criminal justice reform. >> every member of this body, every republican and democrat, wants to see less gun violence. >> we must continue to work the work of non-violence and demand an end to senseless killing everywhere. >> and the resolution for congress to impeach irs commission

commissioner john cos. >> itch peaching the commissioner of the irs service. >> we will view the senior congressional debate. join us tonight at 8:00 on c-span for congress this fall. >> book recently visited capitol hill to ask members of congress what they are reading this summer. >> i just finished the new brad ford thriller. he does great work with thrillers and my daughter baby sits for him in nashville. my kindle has quite a few science fiction books on it. i am reading time travel and science fiction and a couple classic science fiction just depending on how much time i get to read. generally it is just on the airplane.