that's the one where the anti-bush demonstrators were. the alleys that the motorcade went through which son third street, which is neither -- which is on third street, which had neither group of protesters, because police will blocked off traffic north of california street, so no demonstrators could get there at all. . if i could return to the discovery point, it's the nightmare the secret service fears. it's what qualified immunity is designed to prevent. when there is a legitimate security rational, discovery into what the agents were thinking, what the secret service's policies were is exactly what it shouldn't be. it's what hunter didn't want, is agents hesitating before they did their job. suppose the original set up the motorcade is coming down, secretde has access, the

service comes along and says clear the anti-bush demonstrators. uppose those were the facts. would that be a valid -- >> your honor, the question would depend on whether there was a valid security rational. i think in the context -- >> more likely the people who were against the president -- >> your honor, i think that would be a more difficult case than the context of a motorcade where the security of the president is much different than when the president is on an outdoor patio separated only by a small fence. i do think that that is one of the major differences between where the anti-bush protestors here is that the allegation that could be based on differential treatment because the pro-bush protesters were in position to see the motorcade when it left,

therefore as the complaint alleges in paragraph 55 that somehow undermines the agents' security rational, it doesn't wash. if i could turn quickly to the suggestion that the district court could control discovery. that's what the court rejected in ikball. once that door is opened, the agents lose the security and peace of mind they need and they are subbed to the very burdens they shouldn't be -- subjected to the very burdens they shouldn't be subjected to. we don't think under the allegations here as the chief justice pointed to the key passage that these allegations are any more than consistent with the obvious alternative explanation. i have addressed the pro-bush protesters. the diners are differently situated from a security perspective because they had no anticipation of seeing the president and the secret service could screen additional folks coming in. it's different from a crowd outside an alleyway. the advance manual that the other side points to supports us

not them. what it said is -- says your honor is security concerns are for the secret service, if it's a political concern, that's for the advance team. >> thank you, counsel. the case is submitted. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> join us tonight at 8:00 eastern for the look at the financial crisis. back then ben bere notwithstandingy told congressional leaders, it would be set in a matter of days. the good part of the world will meltdown. that's one story told by former senate banking committee chris dodd in the discussion of the dodd frank law. he's joined by the bill former house financial services chairman barney franc. you can watch that at 8:00 eastern here on c-span. it's commencement time again as colleges and universities graduate the class of 2014. this saturday at 8:00 will

feature remarks from john kerry, among others. on sunday at 6:30 p.m. eastern, senators pat leahy and collins, as well as congressman joe kennedy. >> for over 35 years c-span brings public affairs events from washington, directly to you. putting you in the room at congressional hearings, white house events, briefings, and conferences. and offering complete gavel to gavel coverage of the u.s. house. all as a public service of private industry. we are c-span, created by the cable tv industry 35 years ago. and brought to you as a public service by your local cable or satellite provider. watch us in h.d., like us on facebook, and follow us on twitter. >> now the brookings institution look at the implications of growing russian influence in european and asian energy markets. based on a new book by the oxford institute for energy

studies. earlier today, this is under 90 minutes. >> good morning, ladies and gentlemen. thank you very much for coming out today. i think this will be one of the most exciting programs we have had in our energy program. i'm charlie ebinger, director of the security initiative. we've got some of the heaviest tters in the whole rush -- russian-european energy field, and we are glited to have everyone here today. i won't introduce people individually because you have their bios. i only would like to thank ed chow to be a commentator and our own cliff gaddy, and i would just like to say, particular honor for me today to sponsor this event because there are very few people that professionally you can say in the case of jonathan stern that we have known each other literally for close to 40 years. we first met each other when jonathan was working on soviet

natural gas. so it's a delight to have both him and jim henderson here today to lunch with, once you have time purr ruse i think one of the most outstanding books on this whole issue that i have ever seen. without further ado, let me introduce jonathan and he'll kick us off. then we'll have presentation from jim and then we'll move for open commentary but leaving a lot of time for questions from the audience. onathan. >> charlie, thank you very much. thank you-all for coming. we really appreciate the opportunity to launch our book here. i want to say in terms of protocol, of course as far as the oxford university press is concerned,le the first launch is in london which is next tuesday. we are not really here.

this is actually the first time we presented the book. in public in this way. we come from a very small institute which is part of oxford university. we are some of the few people in the european still doing research on the deeply unfashionable subject of oil and gas. you can see the title of the book. i'm just showing you the structure because we are just going to give you pretty much 6 a snap -- of a snapshot of a few not all these issues, thole we are happy to talk about anything in the "q&a." we are not in this presentation talk about the ukraine crisis, but we'll be happy to talk about it in the "q&a" as well. the thing that you should probably understand about the approach of the book is that this is the first book on russian gas that we have published since the one that i wrote in 2005 on gas. and the subtext of that book was , would the russians be able to

develop enough supply for all of the markets they could possibly service, they could possibly deliver to? and the subtext of this book is, that that situation has completely changed. that's no longer the question. the question is, can they deliver gas to rapidly changing markets where the market conditions, particularly the pricing conditions, they are facing much more competition than was ever the case in the past. it's not to go through all the numbers, but to give you an idea of the complexity of the situation they face. the russian government faces a very, very complex, mixture of supply sources and markets, which have to be managed on an ongoing basis as those markets are changing very rapidly.

so i'm still listening to people ho are talking about gas declining production and attributing that to some problems gasproduction is having. i'm still listening to people who keep saying things like, well, what are they doing in europe? is this due to political or commercialish shution? these are the kind of complexities we'll be addressing. we have addressed in the book. we'll be addressing a little bit in this present tation. -- presentation. let me just locate you in terms f the importance of gas in the macroeconomic picture. people and particularly journalists tend to talk about oil and gas in the russian economy. not realizing that the two are completely not comparable. so this just shows you, i hope

you can see maybe, in the back it might be difficult, essentially the three charts share evaluated sector in g.d.p. where gas is at least significant, share in exports where gas is about 12.5% compared with oil at 54%, and the share of budget revenues where oil is 42% and gas is 6.3%. so the key thing to remember is that gas is very, very important in the russian energy balance, but it's not really important in the financial -- in the big financial picture of the russian economy. this is another way of looking at it where those top two light blue and dark blue bars are the money that russian budget earns from gas tax as opposed to the big green bars which are about the money earned from oil. so those people who keep saying impact on try and

the financial aspects of gas because this will punish the russian economy, they haven't got the picture remotely right. let me rush on and just show you -- ig picture of gazz gazprom's take on contracts in europe. the reason this is important is that americans, some of you i can see i recognize, will remember an era before the 190's when there were long-term take or pay contracts in this country. that hasn't been the case for a long term. the contracts are still alive and well in europe. top grayhese bars, the 85% take line is the or pay line. this is what we think is more like the current situation.

what you see here are the contractual commitments for those of you not familiar with bidding, if you divide by 10 you get to billion cubic feet per day. basically what we are saying in e chart is until the mid 2020's european buyers are obligated to buy at least 10 billion cubic feet a day and closer to 15 billion cubic feet a day from gazprom under international contracts with legally binding arbitration. all of this discussion about oh, how can europe we dues its dependence on russian gas, if europe wants to break these contracts, conservatively, very conservatively, it would need to spend between $400 billion and $600 billion euros to buy out these contracts. that isn't going to happen. so essentially this is the picture you need to have in your mind when you think about russian gas exports to europe.

but there is some difficult and i'm not going to go into it dependence arithmetic which people try to do saying this country dependent on russian gas or this percent of its gas supply. that really isn't very helpful even on an individual country basis let alone a european basis. to -- what you probably need keep in mind is traditionally virtually all of russia's gas supplies flowed through the ukraine, hence the problems we are having at the moment, but that is now diverse filing, and it has been specifically diversified because of the lack of trust that the russians have had in the whole of the post-soviet era, not just in the last year, not since january of twin when the last big disruption happened, but the whole of the post-soviet era due

to nonpayment and what the russians construe as theft of gas. this is obviously disputed. but this has been the problem that the russians have not been able to control the supplies that have been flowing through ukraine. as a result of that lack of control, they have progressively built transit diversification pipelines of which the first was north stream which you see here. and you see better here. and where we have two pipelines now up and running. that we e the fact have probably around 5.5 billion cubic feet a day deliveribility through the pipelines, they have not and are not running at that rate. and that is principally due to some complex regulation in the e.u. which means that there's been a constraint on the amount of -- the amount of pipeline

capacity that gazprom has been allowed to use. that might have been resolved, but due to the most recent ukrainian events and political response in brussels, it has not yet been resolved. that is a relatively simple problem compared with this problem. which is the new it south stream pipeline going from and up to making landfall in bulgaria. now again we'll talk a little bit more about this in detail if people are interested, but there are very, very severe regulatory problems with the new regulation in europe connected with the fact that the new regulation in europe has not been written, so it's very difficult to comply with a regulation you don't know whether it's been written, but the intergovernmental agreements and gazprom's model for how this is going to work conflicts with even the main principles of the european regulation. this is very important because

the really big problems in january, 2009, and if we have a crisis in the next few weeks and months, have all been and will be in southeastern europe. in other words, this line would deliver the countries like bulgaria, romania, serbia, and the former yugoslav republics which experience the really huge problems in january, 2009. and that's why this is a very important pipeline for one aspect of european gas security, that as i'm sure you'll appreciate, is considered a threat in relation to other aspects of european gas and energy security. that is a brief snapshot of the european part of this book. eventse relations to the of the moment. what i'm going to do now is pass on to jim henderson who will

talk about other aspects of the ook. >> thank you, jonathan. so one of the interesting questions, biggest questions that we try and ask in a book is, what's going to happen to gazprom? because it's by far the largest producer and reserve holder in russia in terms of gas. it's the largest exporter into europe and former soviet union and largest seller of gas in the domestic market. the reason for the matrix concept and for the title, how markets driving change, because what we have observed since jonathan wrote his book in 2005 and particularly post the economic crisis in 2008 and 2009 gazprom's bluntly

gas had become the least desirable option in all the markets. the big question was how is gazprom responding to its change in its outlook and need to find customers for its gas? and i think the best way to explain how this turn of events came about and caused a shift in outlook from 2005 to 2008, is either combination of factors. the first of which was the stagnation of demand in europe for the economic crisis and extent europe and government started shift toward renewable. the second was obviously the unconventional gas revolution in the u.s. which led to l and g being available, diverted to the european market and extent cheap coal. and gazprom's oil related gas prices in europe suddenly became very expensive.

all that was happening and was leading to, if you like, a reduction in the demand for russian gas at the time when on the supply side rather unfortunately for gazprom they made a fundamental decision around 2006 that they were going indevelop a huge new region, northern siberia, because there had been a concern prior to the economic crisis russia may not have enough gas to supply what at the time was growing demand in all its markets, 2005, 2006. this combination of events, the stagnation of demand, the avoidable of alternative supply, high price of russian gas, and the massive development of a new source of gas supply led to, if you like, kind of perfect storm for gazprom, which is what reflected in this gaffe. what we try and address in the book is how gazprom eventually has started to address the issue of its gas being the least

desirable option and is now starting to develop strategies to solve that problem. this graph is a graph that was published in 2013, and it's slightly out of focus i'll point to the colors. the dark blue is gazprom historic fields. the big soviet legacy fields that have been in decline for some time. you can see going forward in very sharp decline. this is why the question was raised about the development of the amal fields. and they are the light flue. third tier of blue. so essentially in 2013 gazprom's outlook as you can see for its west facing fields, the blue fields, is essentially its production is not going to rise at all over the next 20 years. as it faces this new demand outlook. this contrasts very, very sharply with the outlook it had

only a year earlier in 2012 which is going to reflect in the high case as they now call it, blue line. you can see that essentially downgrade its production forecast by the better part of 100 bill cubic meters per year so that what had been a gross trajeck tore is now a flat trajectory. nevertheless, as you can see the light blue expands doctor matically. what's happened is gazprom is committed to developing gas in a more expensive region of russia, very remote region of russia, and now coming increasingly dependent on higher cost gas and also has a lot of it, excess of it, because it has committed to this development of fields that could produce perhaps as much as 250 or 300 billion cuic meters per annum. it has been forced to cut back its production expectation. essentially what we have in russia is a gas bubble. a they're rhett cal --

theoretical oversupply of gas. so essentially now we have a very -- competitive market developing both in russia and also described in the export market for russian gas. the other thing to point out on this grass all the growth you can see will come from the east, another new theme that's developed in the book. and last week of course gazprom finally signed its export agreement which we can discuss in greater detail later. the themes here are essentially gazprom in the west is now fighting a significant competition in all its western markets, europe, f.s.u., and domestically. has a pretty much flat production output and a lot of gas to production but not enough markets to sell it in. all its growth will come in the ast.

this talks to the theme of the shift from the west siberian areas, the traditional field, up to the northwest, the massive new pipeline system being put in from the peninsula and potential development as supplements which are now being pushed further out. and you can also see in the top, the l l.n.g. project, but seengsly this sift away from the core areas into other more expensive elements in the russian context of the peninsula. this is seengsly gazprom is tied in now to this new source of higher cost gas. in contrast with the gazprom storery, the other key theme in the russian gas supply story has

en the emergence of luring gazprom producers, particularly novotek and emerging force in the gas sector, russia's natural gas company, moving more into gas, this graph demonstrates the theoretical growth of production from the independent sector. as you can see essentially it could more than double by 2020. in reality i think what will happen because of contracts that have already been signed with customers particularly in russia, is that domestic independent production will reach somewhere between 250 and 300 billion cubic meters, but nevertheless we see the shift away from gazprom towards the producers because they have been able to compete with gazprom who have been forced to sell at regulated prices, which have been rising very fast, and essentially they have undercut domestically by the independent sector.

a fundamental shift which could see gazprom's market share in russia fall below 50% easily by 2020. and the third element of competition that has emerged within russia is now in the now allowed where for the first time ever to sell gas to customers outside russia in the form of l.n.g. and preparing to do just that. essentially gazprom's position comes under threat from domestic peers as well as international. this graph, slide basically just makes the point that i made at the beginning, essentially there is a loss of russian gas looking for a market. what i have done here in the graph on the -- on your left is just to say, what gazprom saying it could produce in 2012.

and has been outlined, it has the capacity of 600 billion cubic meters per year despite they sold only 490 billion cubic meters last year. and i share historic production in 2012, and 300 billion cubic meters of production in 2020. this is the huge potential surplus. it's theoretical, but a lot of gas available, potentially 900 billion cubic meters of gas available for the demand of less than 800 billion cubic meters on most people's forecast. within that position in russia gazprom is the high cost producer, it's essentially becoming the swing producer, if you like, of russian gas. which of course puts it in a difficult position, but also potentially a position of some strength as well as -- although in russian terms it's relatively high cost gas, in global terms actually gas is relatively competitive both in western

markets and in asia. in terms of just moving to asia and competition, this just shows you russia's l.n.g. plans and just highlights the fact that although gazprom itself has -- it controls the existing l.n.g. there is a n fact competing project in the same island, the one project, which it plans to bring on stream with exxon by 2019, and most elevantly and most immediately novatek has a project which is planning to sell gas both into asia but also interestingly into europe. we are seeing the first elements of competition for gazprom in its core european market, as well as in the new asian market. and i think that competitive else, not just anything

may have catalyzed gazprom into getting it done this year. significant pressure was building up on gazprom, particularly from roseneft, to get an asian deal none. by was vital not just for gazprom but the russian political and commercial economy as well. in terms of the asian deal, we can talk more about the exact details, but the foundation of russia's eastern gas strategy will now be the infrastructure that's going to be built the egions on the left via the 3.5 ,000 kilometers of pipeline that will run from the china border here and then on to the l.n.g. plant here. and the existsing infrastructure

-- existing infrastructure, and they will become the foundation for the development of an eastern strategy that could see russia producing and selling in domestic and export markets up to 14u7bd billion cubic meters ber per year within a decade or so. this is a fundamental shift in russia's export strategy. it is important in terms of foreign policy, but also in terms of domestic development of eastern regions, and it will now provide gazprom with the ability to re-establish itself as the dominant force in the russian gas sector. a quick word while we are talking about asia about central asia, we talk in the book about the shift, if you like, in russian strategy in central asia from being the dominant buyer of s from uzbekistan and cassic stand now if you like become --

kazakhstan now if you like taking a subordinate role to ina who now takes the vast quantities of the gas from the fields in turkmenistan. so we have seen essentially russia and gazprom accept a loss of geophysical leverage in the region as the commercial realities of these countries' diversification strategies has meant that they are sending much more of their gas east and they are now sending it north. we expect that to continue. we don't see exports from sentrayashe into russia rebounding at all into historic levels remaining in the range of 20 to 30 b.c.m. for the foreseeable future. just to conclude, given our half-hour's up, this graph at the end is intended to show that , although some of the issues we address in the book have clearly

been problems for gazprom and russia as markets have changed and have driven a change in strategy, particularly gazprom, actually russia is in a interesting competitive position relative to the two -- world's two major importing regions, europe and asia. clearly the vast amount of russia's gas infrastructure points west towards the european market, and we believe, despite the fact that gazprom in a domestic context is quite high cost, in a european context is very competitive. to put a number on that, we calculate that the break-even price of the l.n.g. at the 7 to $8border is around $ which is anything competitive to what we can see. towards asia obviously the new

pipeline that will be built, the new reserves will be developed, will provide gas into china at around $10 to $11 for b.t.u. which again will allow them to be very competitive with central asian imports and future l.n.g. imports into china. so although russia has had to face significant competitive threats over the last five to six years, as the markets in which it has sold its gas have evolved, in fact the country finds itself in a competitive position, geographically ideal position to supply the major markets, and going forward if gazprom continues to adapt its marketing strategy could find itself in a strong position relative to its competitors over the next decade. i'll stop there and we will be happy to take lots of questions.

>> a lot of points for discussion. and i thank you very much for commendable piece of work that you have done. if i may just use the power of the chair because our principal commentators are going to be ed chow and cliff gaddy, if i may raise one question that you kind of ended your presentation on, jim, but i guess the question that would emerge in my mind is, if the chinese deal indeed comes to fruition and the addition of russian gas moving into far

eastern power markets, do you have any views on what that means for competitive l.n.g. sources? i'm thinking particularly does this make it even more difficult, say, for canadian l.n.g. to come into the market and gulf coast l.n.g. from the united states? are we kidding ourselves with all the hoopla about l.n.g. coming out of the united states that it may really be somewhat subdued from the more optimistic forecast? i think the context is that assuming the deal goes ahead, as you say, and gazprom kind of efficiently develops the infrastructure that's required, we are talking about 38, 48 b.c.m. of gas into china into a market that's looking to be supplied with 400 billion cubic meters of gas plus by 2020 if they meet their current target. we are talking 10% of supply

into chinese markets. i think there's plenty of room for alternative sources of supply. the chinese very clearly have developed a compass of supply--- supply. we have western supply from central asia. southern supply on the eastern seaboard from l.n.g. clearly regasification is being expanded dramatically on the eastern seaboard. then the russian deal provided the very logical north list of that supply. and indigenous intentional increase in supply from both conventional and unconventional sources. i think there's plenty of room for l.n.g. what it does do, though, is start, again, to set a benchmark price for potential imports into china. because clearly the chinese have started to set a domestic benchmark down in the southeast of the country related to l.p.g.

and fuel oil. this deal looks like it's linked to oil as well. and would deliver gas into the eastern coast at around touchdown to $13 in b.t.u. which looks like the kind of price which u.s. l.n.g. would be delivered. i think we are starting to get a benchmark price which perhaps does make it more difficult or forces the higher cost l.n.g., potential l.n.g. producers to assess how competitive they will be in the chinese market. i think there's still a gap for the volumes, but i think there is -- we are converging on a price expectation now which is certainly lower than we have seen in the past couple of years at least. >> ed? >> thank you, charlie. thank jim and jonathan for putting this book together which will be a real contribution to the field. it's always good to bring

reality base analysis to washington. because we often hear in washington substitute perceptions for reality in policymaking. i don't know about europe, but it's always good to have profits from overseas come to washington -- prophets from overseas comes to washington because sometimes a prophet is not respected in his own contry. i promise to do the same in brussels and london as the opportunity arises. by the by, i think one comment on gas and the importance of gas, it is definitely true that oil is also money in russia. but gas is often about politics. both domestic politics as well as foreign policy. and sometimes personal politics. as well. you can see that, and mr.

putin's very personal involvement in both ukraine and the china deal that was just announced. rad off would gazprom's statistics at the drop of a hat. so this is clearly something very close to the russian leadership. but the question i want to raise which may be a subtext of the book which i promise to read more carefully as time allows is whether in order to meet the various market challenges that both of you have outlined, whether fundamental structural reform of the gas sector is ecessary in russia or not. he role independence plays for example, it amuses me that they are called independents it would be like calling exxonmobil independents in the american context. they hope to be independent from gazprom, but otherwise they are

not independent in the classical sense of the word. are they going to be limited, the so-called independence to serving the domestic market? as they have. clearly expanded their scope there. one asks, do they pretend something that's larger in the future that will be a real liberalization of the gas market in russia? one could easily explain yamal and the saclin one, special relationships, rather than the systemic change that is over the horizon, so it will be interesting for you to say more

about that. if one were to become more responsive to the changing global gas market, which you mentioned, it seems to me that some changes would be necessary. unbundling, which is a four letter word for gazprom, certainly would allow better access to pipeline capacity by more producers than just the privileged few. you think about the associated gas that's flared all over russia as a result of the structural rigidity of the current system, given that supply is not the issue, it's structural reform necessary to achieve the kind of efficiencies russia may want to have? on ukraine, it seems to me that ot only is ukraine currently

relied upon for at least half of gazprom's exports to europe, there's also a question of whether the availability of transit through ukraine allows gazprom to compete in the spot market in the way that these expensive new infrastructure projects, nord stream, nord stream expansion, south stream do not afford because it really -- they are very expensive projects that need to be financed. they require the kind of long-term take and pay obligations on the part of the buyer in order for these projects to be financed. that's the option of ukraine even into the medium to longer erm give gazprom the kind of flexibility to price their gas to meet the spot market where it is rather than stuck with these long-term take or pay contracts.

really would be interested to hear you talk a little bit more of your assessment of the deal in china. a lot of things are not known. some of the russian pronouncements have not been confirmed by the chinese side, hich i find interesting. there is almost certainly going to be some prepayment, loans required for the $55 billion that gazprom estimates it will cost them in terms of capital spending on their side. we don't have a lot of commercial -- details on the commercial terms. it is interesting in the slide that jim showed which was a gazprom forecast, the 2020 production from eastern siberia, t was very modest. so maybe this deal will cause

them to revise their forecast. when al is this deal, and and how might we be able to tell? one other point that we -- would be interesting particularly for europeans coming to washington for us to hear more about is the e.u.'s competition case against gazprom. which petitive practices maybe a report should be filed not too long from now. maybe by fall. the other part of the picture that you can help us fill out maybe is how interested is russia in the gas exporting countries forum? is this just a shot that won't lead to anything, or is this something that in the longer run

we have more links than seem to expect right now? to be last e--- week when the prime minister decided to make a refueling stop between shanghai and st. petersburg and invited the turningman to the next forum which is in november in doha. a little bit about that would be i think interesting for the audience as well. >> you raised a lot of questions. before you gentlemen can address, i want to ask cliff to make some. >> that might make sense because some of my questions would probably be the same as ed chow's and i won't repeat them. i want to first of all say how happy i am to have a chance to not only read a book but get a free copy which i think a lot of people here in the audience are amazingly appreciative of. you don't typically do that in washington.

because this is an amazing book. it is really going to be, i think, the go-to reference book for anybody who works on russia, who works on energy issues. it doesn't have to be narrowly focused often gazprom or russian gas or gas at all. i speak as a consumer. there's no way i can envision knowing at least a fraction of what's in that book, but of the book and i can go to it. i think it's going to be a wonderful asset for all of us. i want to also just make the point, ed's made it to some extent, that despite the title of the book talking about markets, and jonathan's remarks about the complexities of supply and demand -- complexities of supply and demand, competitive markets to which then russia has to react, the book is more than just about the complexities of markets. it's also about the complexities or as the terms keep coming back

in the book, trying to balance different interests, trying to resolve the tensions between different interests. this is not between supply and demand. this is between largely the political imperatives, the political demands that are placed on the russian gas sector and gazprom in particular to resolve that. intention with the commercial demands. as the book points out there are three demands being placed on gazprom. it makes no sense whatsoever to look exclusively at gazprom as a commercial entity and extent it, it's not living up to the prove expectations or potential without taking into consideration that this is more than a profit maximizing commercial entity. it is subject to that which generates revenues, generates revenues for the budget as the authors point out, a small percentage of russia's formal tax revenues. i'll get to that in a second.

but also of course has the geopolitical role. this book is exemplary in talking openly about the geopolitical role of russian gas, doing it in a very sensible, realistic and balanced way. and pointing out, debunking the idea that gas is a weapon. and pointing out that it's a lever, a point of pressure, it's used. in fact if you use it, you probably will destroy your ability to use it in the future. there's a lot of complexity there as well. finally the role of gazprom in russia's domestic situation, which is both economic and political and in russia today those are pretty much the same thing. it is to basically boils down to gazprom's role in keeping an economy alive. it's not always viable completely on its own. it preserves jobs in sectors, construction sectors, input producers, huge part of the former russian defense industry,

soviet defense industry is kept alive and was during the 1990's by orders from gazprom for equipment. for everything from cables to pipes to everything else you could imagine, pumps, aircraft, engine manufacturers being prime producers of pumps for gazprom and so forth. it is a hugely important role and it is expected to play that role. perhaps more than anything else. it may only produce -- gazprom may only account -- the gas sector for 5% of russia's tax revenues, but that's formal tax revenues. if one were able to compute the informal taxes, the informal burdens, social and economic and political that gazprom has to play, we find that it does, as educated -- as ed indicated a very important role. there is that complexity. the tradeoffs and tensions is the overall theme of the book. i like it in that regard.

and it's a twofold message because on the one hand the authors are identifying the huge nature of these complexities. the challenges. both in the market sense supply and demand equation, competitive market, but also in this other beyond noncommercial complexities that gazprom faces. and bigger maybe than people ordinarily imagine. they will only grow larger. at the same time, there is a positive message which is what jim ended the conversation on, about real signs that gazprom and russia more generally, or the manager of the big russian, putin, is able to see and start to adapt. maybe belatedly. who knows. what he says publicly has little to do with what he's thinking. we know that by now. i have heard him personally talk about pooh-poohing shale gas and

playing down this and that. you tend in the beginning to take that seriously, later you wonder was that a smokescreen? we won't really know what he's thinking. i think that my sense is -- especially after perusing this book, there is real capability for change in russia. it won't necessarily be the kind of change that some people are imagining with the perfect market oriented structural reform of gazprom and so forth, there will be change to adapt to this changing environment that gazprom is in. and just to end on a very, again on this very personal note of putin's role, which ed outlined or indicated clearly, he does regard himself as the head of the whole energy sector, and especially of gas. but he's a man who hedges his bets. we know that. he has fallback options. he avoids under all circumstances making a commitment he can't get out of. with that sort of mentality,

given those challenges that are the kind described in the book here, i think -- we don't know exactly what sort of changes he might undertake, and i think they could span almost anything with respect to the domestic organization of the industry, as well as foreign markets, but we have to keep our eyes opened because i think the gas sector, russia's energy-based economy, is much more resilient than many people seem to realize or seem to indicate when they simply extrapolate forward from certain assumptions about past behavior. to me that's the story of this book. i think indicating what the challenges are, what the tradeoffs and intentions are, and then giving indications of how already certain changes and adaptations have begun to be made. >> thank you both, gentlemen. don't know who wants to -- >> why don't i try to pick up some of the more specific points. i'll leave jim to talk about china and the independents

because that's very much his thing. can i just start by picking up a point that cliff just made about the role of gazprom. what we try to explain in the book is gazprom, if you look at energy business models, is caught between the business model of a traditional utility company, and in a producing country, where this -- these companies are expected to provide energy at low cost. that's what they do almost everywhere in traditional producing countries. one of the things that's interesting about the point that ed made about reform is that actually the russians have done pretty well in relation to their peers for reforming the gas sector in relation to pricing and also in relation to liberalization. i don't want to make too big a deal of this. if you take a look at some of the efforts in european, e.u. countries in relation to price

reform and liberalization, you'll see russians have quite a long way to go, but in comparison to where they were 10 years ago and where i, in my previous book, predicted they would be, they have done pretty well. virtually every cubic meter of gas which is sold today in russia is sold at a profit. maybe not a big profit. but at a profit. that's a big thing to say about producing countries. in our book we published in 2012 tongass pricing around the world -- on gas pricing around the world, what we saw was subsidy, subsidy, subsidy and unsustainable. putin himself did address that. ok, there's not -- certainly the third party regime is not perfect. but it exists and we talk about it in the book. it's relatively come plecks -- complex. unbundling is not going to

happen soon, but it is talked aboutment he -- about. that's quite a step forward anyone would talk about it. let me just catch in a few ukrainian european things. as far as the ukraine, the availability of ukraine transit and what that means going forward, i see this as a typical russian chess game. in other words they have their pieces on the board in different pipelines, and it necessary -- if these they can move their pieces arne the board depending what the commercial situation looks like, depending what the political situation looks like. they, i believe, would be very happy for some kind of resolution of the ukrainian situation which would create a nonhostile relationship between the two countries. whether they will succeed in that given the crimean act i wouldn't want to venture an opinion. but normalization of relations

with the new regime in kiev i think is a priority. is it achievable? ig quefment -- big question? yes, we are closing in on what will need to be the statement of objections. for those of you this is what you guys call antitrust. the key problem here is that the authorities are objecting to the continuation of oil in pricing in particularly the central east european and baltic companies. gazzplow is resisting this for all kinds of historical reasons f they don't settle with the authorities, in other words if the authorities do issue a statement of objections, if this was an e.u. country there would be no discussion. no appeal. it isn't, so they will appeal to the european court of justice. so we could well see this stretch on to the next few

years, but in de facto terms this will be settled within this. in other words, i believe by the time this is finally resolved if it goes all the way from the european court of justice n. contractual terms it would be settled, i would be surprised if the european court of justice decided to try and leff have i a ig -- levee -- levy a big fine for historical violations which the russians wouldn't pay. very, very interested in advertising but not interested in reality. so putin when it was in moscow last year or the year before they made a big splash about it. major speech about it. which didn't represent anybody else's policy apart from his own, but the key thing really is only three countries are really

high profile. the russians -- the iranians and algerians. the but the problem is the iranians don't export gas. and none of the rest of them can agree on anything. so they may or may not show up. they haven't since the first meeting. this is something that journalists get excited about but not many other people. >> just to talk about the independence. the deregulation of the russian market. just to pick up the point that both of you made about balance. i think it's really interesting to think about why the independent, have seen such a dramatic increase in their market share and production. i think it comes down to the problem that gazprom has in trms of balancing its political objectives that's been set by

the kremlin and commercial objectives to survive and operate as a commercial entity. at least try and make some profit to keep itself going. post k what we saw around crisis was as the markets changed and gazprom failed to adapt there was a risk, i think, that its commercial inadequacies were starting to lead to a situation where it could not fulfill its political objectives or at least the kremlin foresee that there was a possibility that gazprom would be losing its dominant role and its ability to be -- i think the pressure was being applied from various angles and again balance is all about, this is not just about -- this issue is about vested interest as well because owns ly plachenko

novatek, i think there was a sense that gazprom commercially was failing and that the potentially it was in a downward cycle. the elements of competition and also elements of encouraging russia to start to develop its most competitive gas and get it into the marketplace was a driver, and i think you once saw that in the domestic market because gazprom's expensive new field need add higher domestic rice to underpin their economics. e saw the regulated price price gazprom charges their customers increase per anumb. and at some point the independent producers found they had russia's cheaper gas and could undercut that and from 2012 onwards when gazprom's fife-year contracts started to

expire, they were allowed and encouraged to compete with gazprom to start to set what is a quasi-market price for gas in russia now. there's still a regulated price -- acts as an indicateor indicator but essentially, the independents will be allowed to set prices above and below the regulated price. this is because gazprom's higher regulated price was undermining the economic growth of russia in the post-crisis time. seeing that we are complaining about high energy prices. once this regulatory process developed that would allow ompetition, but that doesn't mean we are heading toward a liberalized market will stop that means there was an incentive to encourage some competition and i think what we're seeing now is very much an oligopoly. there are three big gas

companies in russia and we saw the development in the domestic market. now we are starting to see in the export market and gas prom --gazprom market share and inability to do a deal with china was mother. what we have seen is the lng export monopoly broken in a very controlled manner. the legislative -- legislation is very specific. if you're a state company with offshore gas you can develop lng, if you're a company with lng defined in your license, you can develop lng. those are two very specific projects. it is very limited. nonetheless, it was a catalyst for action, if you like. it said to gazprom, get your act together. it's interesting that nova tech side of the deal and sold it before gazprom signed a deal. i think what we are seeing the

balance between the commercial, political, and vested interests, and it will be a very controlled process. the next step could be third-party access to the export pipeline in the east. it could go to china or could be sold into the domestic market. that's the next potential step toward a controlled liberalization of exports. there is no mention yet of the pipelines facing west being liberalized in this fashion but you can see a step-by-step process by which the three companies try to find a balance in the east and try to find a balance in the west potentially.

i think the liberalization process is a slow one. it will be many years before we see gazprom broken up but we are taking steps along that slow, slow journey. in terms of the reality of the china deal, it's difficult to be concrete about it, but all i say is from a commercial perspective, we believe in the last three or four years, we believe the price they have done the deal, around $350 to $400, b.t.u.'s is 11 about the right price for both parties. we estimate gazprom can make a reasonable rate of concern assuming it invests efficiently in the entire eastern program.

it appears to be a balanced commercial contract with lots of bells and whistles, but it would seem to make sense or us or both parties to make the deal forward will stop maybe there will be political shenanigans, but commercially it looks sensible. would not be surprised if a -- if it did proceed on the terms we have known. >> thank you very much. it's time to open things to the floor. please keep your questions a question and not a lengthy statement. you can address toyota a member of the panel, but if anyone else wants to weigh in, we'll proceed that way. over here against the wall. >> i wanted to go back to this idea of the perspective bubble and throw out a few possible

reconciliations and i want to get your reaction. one is reform the price at which you sell gas to europe. the second option is to try to build a western route to china, to bring gas from west siberia. you try to low they are eprice within russia and shove more gas in the russian economy, or you leave et in the ground for a better day. when you think about those four possible options, how would you think about the relative attraction of that? >> the realpolitik is leaving it in the ground is what is happening now. even if you don't believe they could reduce 316 last year when hey produce 487, they have a -- even if you think he was exaggerating, they have a lot of gas. jim will talk a little about the

infence on this. what i think is most interesting is we as an institute have conducted a public debate with gazprom on pricing. what's interesting is they are still saying the same thing about the pricing. after a lot of hard talking with their customers, they have adapted where they need to adapt in the competitive market. their prices are now competitive although the way they have done it is an incredibly bizarre -- it's a crazy way of doing it, but i have done it stop the question going forward is do they want to put more gas into urope? what we describe as the discriminating monopoly hesis.

you see all gas exporters doing this. they all do it. how do i continue to compete without crashing the price? every so often, they make a mistake and crash the price or they starve the market and the price goes up dramatically. ith this threat hanging over europe, prices in europe are falling and have fallen around 25% since the beginning of the year. what that is telling everyone is that gas is in big trouble in europe. demand is falling and falling faster than domestic production. if you want to sell your gas in europe, you got to compete. gazprom finally figured this out in 2013 and massively increased its sales.

it is not a complicated concept, but the practice is complicated. >> the interesting thing about gazprom's gas is that it's competitive. it's not priced at a premium anymore. if you to the math in 2013, it would have been cheaper than half price. the russians are quietly confident that europe will not find alternatives and they have openly stated. if u.s. lng arrives in europe they'll compete with it and there's no doubt they could undercut u.s. lng in europe. if they want to, they can undercut the competition. there's no point in them crashing the price now. you are always better maximizing price. in terms of what do you do at the over supply there's a price in the domestic market where hey were losing money.

the price in the domestic market now is give or take the breakeven price, so we've reached a level where gas prom -- where gazprom can break open even the most expensive fields and they could pump more gas into the market but there's no need. customers and producers seem to have found a level at which everyone is happy. the price isn't going up this year and going forward, we'll see. but we look like we've reached equilibrium. in terms of sending gas to china, they'd love to do that but chinese aren't falling for that. they can see what gazprom's strategy is, to play off the european and chinese market and china hasity of gas coming in from asia from fields where they

have equity and significant political and commercial control. i think gazzprom's -- gazprom's best hope is to sell -- or russia's best hope is to sell more gas in the east, using the new pipeline structure. and the western route is something, you know, which miller has claimed they are now talking about which in realist exterms is somewhere out late 2020's, 2030's before we see gas coming from west siberia. >> the western route is one area ere the lack of chinese is conspicuous. drawing gas from a pool in western siberia is exactly what the chinese don't want. i think it's very significant that besides the determination

of the eastern route which was a break their last march which raises the suspicion in my mind as to recovering that maybe see mpc will try to claw up scream -- upstream ventually. part of the attraction of the field in which chinese supply would come from, if and when gazprom develops the field with their usual efficiency that there may be an opening down the road for chinese to least bring up the question of equity in those two giant fields. >> we've got two questions here. tim and ariel.

>> my name is tim and i'm with brookings. you have hinted at the answer in the previous response, but i would like to learn more about europe's desire to diversify supplies. it's not new but has been revitalized in light of ukrainian events. if i listen correctly with the background knowledge we have on the competitiveness of fuel sources in europe, it seems there will be an increasing share of call etiquette and there will be an increasing supply of russian gas. do you think that's a correct assessment? and if tgs to -- if it is what does it tell us about europe's desire to diversify its gas supplies and how does that ffect it in your view? >> i mentioned when i introduced our institute that we have some of the few people working on the

deeply unfashionable subject of oil and gas. this is bays 99% of people in european universities working on energies are working on renewables, climate and other sustainable issues. let me tell you that this is a horrible generalization but it's a reasonable one. most of the member states in northwest europe and everyone under 35, this is the only subject that matters in energy. you give talks on this subject in europe, they're like, what do we care about this for? the planet is at risk. this old-style hydrocarbon stuff. this is the problem with the promotion of coal. still the environmental community have not understood this is what's happening. the suggestion of an energy union is a manifesto partly for coal and to treat coal as an energy security product. europe is nowhere with its

climate policy and the e.u. trading scheme. this is something the new commission will have to do as it picks up in the fall. i don't know how it's going to work out but what i do know is i am confidently expecting coal to be resisted outside of germany where no one can speak against it. the question of alternatives to russian gas -- it's a terribly politically incorrect things to say but there are no alternatives. conventional gas production is falling. we don't need to tell you about unconventional gas, to tell you if you don't know, in the whole of europe, no more than 100 wells have been drilled anywhere and mostly where they've been drilled they have been unsuccessful, or there's been massive resistance. y own country, a well.

and it's on the evening news. there's a massive punch up between environmental protesters and police. his is for one well. the big crisis -- gas crisis in europe that no one can talk about is until north africa. egypt, we need to speak about lib yasmwe have no idea whether gas will be arriving in italy from one day to the next. the algerians have not issued any data since 2012. once things get too serious, no one can talk about it. the politics are very complicated. many studies have been done. many consultants have gotten rich doing these studies but there's nothing much new to say that we haven't known for quite a long time.

>> there's a very simple analogy. if europe wants to diversify away from russian gas, then it just has to look at the japanese example and say fine, you can do that. if you want to do that, go ahead. if you want gas at 10, come back and see us. that's why the russians are keeping very quiet about the whole thing and just letting it play out. the interesting dilemma for the european union is played out in the whole situation where the russians are offering to bypass the ukraine, to rid europe of one source of a lack of supply and are being blocked from doing that for short-term fiscal reasons. we will see how that plays out but of course that does not

diversify europe in any sense from russian gas. but it reduces one of the transit risks. >> ariel? >> good morning. excellent presentation. cost of production -- if you look at eastern siberia or if you look in the arctic, the cost of production is very high. this is what land gets as opposed to offshore. ffshore mozambique is shallow, offshore gi nee that they're signing new licenses as we speak, don't you think -- offshore guinea that they're signing new licenses as we speak, don't you think the

picture in the early 2020's will be quite different than what we see today where russian gas from west siberia has an advantage. the second question is about ukraine. do you think ukraine has viable options in terms of enter connectors from europe, gas coming from lng or otherwise or even lng into the black sea with the floating of terminals? >> the overall cost are igh. capital expenditure is high. but i think russia is pretty competitive and gas delivered to europe can be delivered at $7.50, eight dollars btu and can compete with any of the offshore sources. arctic has will be very expensive but i don't think it's in our lifetime.

> you are a young man. >> i think there's when the of gas on the peninsula to satisfy demand but georgia is more difficult, there's the helium issue, but it's all about ransportation. it's a huge distant to market -- distance to market from both. i think russian gas upstream is competitive and the interesting thing in the east is we are going to see if gazprom fails to deliver, we are going to see the same thing happen in the east as we have seen happen the est. the independents have gotten gas put in the pipeline.

one claiming they can produce 15 billion units per year from existing fields. again, if we are disappointed as we could well be in gazprom's inefficient development, there are other people who can step up to play. it will be interesting to see hat happens. >> there are complicated reverse low options for ukraine which you would need a different presentation to outline. what the russians would be very clear about because they saw this happen in 2012 is this is all russian gas coming around and flowing backend. they'll be care to feel price in a way that doesn't happen. the tragedy in ukraine is, yes,

you could do fleeting l.n.g. or other l.n.g. but it would cost a ot of money. the real tragedy is this is a great country who has been run by people who have abused their positions in the post-soviet time. if this country could be run by people who would give the place a chance, they could produce gas. it has domestic gas resources, conventional, unconventional, onshore, offshore, but the moment things seem to be going well, somebody in government decides to take a position in a p.s.a. they have given to a private company. if we could get to some semblance of workable government in that country, that could be fantastic because this should be a rich country. it's got everything it needs to be a success.

>> thank you for a remarkable presentation. it is quite breathtaking. and the book is thick. it is quite astounding what you are describing, which looks like the potential capacity of russia's well situated geostrategic position in terms f oil and natural gas. my question is this and i'm confused, really. in the index, there are two mentions of climate change and copenhagen. no, at least, in a two-second flip through a significant amount of discussion about environmental implications, greenhouse gas implications, local environmental impacts, etc., which as we know is swamping the west in terms of

offshore issues, in terms of all the above. i'm just wondering where and how that fits in both as a cost mention and as a gee y -- geostrategic dimension given the acceleration and opposition to carbon fuels and i would be particularly interested, though this may be offtopic about the exxon center being constructed in st. petersburg to take on environment and corporate responsible and detect issues. thank you. >> let me try to address the reason why we haven't done much on that in the book is, there is quite a bit of literature on that elsewhere and this book focuses on what are the comparative advantages, which is not that area. what is very interesting is a regular person discusses these gas and energy with russia, how

ittle climate, the climate issue, features on their agenda. hey feel they can use it as an advantage other coal but that's about it. local environmental issues are much higher on the agenda and there is at least some evidence f greater sensitivity to environmental issues where they develop new projects. if you take a look at the new developments and the photo album on the gazprom site, you'll see a lot of references to what they have done to try to counter the environmental problems that could have arisen. one of the things that is notable in europe is while the gas industry has tried to play the climate card in its favor, it has almost totally failed, despite the fact that it's a

very logical argument. it's almost totally failed. gas in most parts of europe is not regarded as significantly beneficial fuel despite the fact that in reality it is. it's not regarded as that. environmentalists tend to focus on methane emission issues which are unquantity final, which is -- unquantity le fieable. it's one of the reasons but not the only one there so fundamentally opposed to anything having to do with conventional gas. that's the start of the story. >> i think they risk underestimating the impact in europe. gazprom has made one presentation outlining the traditional view of gas as a supplementary fuel to substitute for intermittently and has made some effort to demonstrate the benefits of gas over coal.

has failed to make an impact. gazprom feels anything it says is taken as a bad thirning in europe. they are talking their own book and it's a russian book as well. in the east, it's obvious what -- that gas is replacing coal in the economy so there the story plays out as a natural environmental story. i don't think i don't think there's any need to nonstrait that, it's clear that's going on, gas is substituting for coal and that's part of the story. > kevin? >> thank you for a great presentation. as we are in washington i want to ask a political question related to the u.s.' role in

what's happening in ukraine. i think the reason jonathan utline that the european union has adopted measures against gazprom, there's been a lot of talk about draft legislation introduced in congress that directly targets fwazz prom. i'd be interested in your perfect ivers on what the effects would be of u.s. sanctions against gazprom or not specifically gazprom but one issue is the technology expert restrictions. would that have any impact on what they're doing? whand do you see as being the material effects of any u.s. union -- unilateral u.s. sanctions against gazprom? >> what i've been very care to

feel try to say in europe is, we have a political crisis with the russians. let's not make it into an energy crisis. while i am completely supportive of the general view of the crimean annexation, i think we need to be really clear in europe that we have an enormous amount to lose from this relationship. if we are going to impose significant costs on ourselves, let's be clear why we are doing it. i'm not saying there wouldn't be reasons for doing it, and should there be -- which we all hope there isn't -- any russian incursion into the eastern ukraine, that would come on the agenda quickly. if the status quo is maintained, my guess is there won't be any increase in sanctions and who will not go into the energy sector. one thing we should keep in mind is it's not a new situation.

u.s. sanctions on soviet energy have strong historical antecedents. before the u.s. does anything, we should look act a lot happened on those episodes to see how successful they were at achieving their aims. >> the technology sanctions, and there are three big areas, i was with the finance director last week and there are two things that are of concern. one is the fact they're buying liquefaction technology from a u.s. company and if there was a specific targeting of that project that could hurt. the every other thing that already had an impact, the financial sanctions and threat of further sanctions which are making banks nervous about lending and the completion of the project financing has taken

longer than expected for precisely that reason but of course what we're seing in both instances, sorry, just to complete the technology thing, the other two areas are oil related. obviously the offshore generally but particularly the arctic with excellent drilling as well, in august this year in the south sea and then there's the unconventional where again we've got the pilot projects from a number of companies now, exxon, b.p., and obviously that transfer of technology could hit. but the response on a number of these issues is to turn east. they're looking to finance a lot of stuff with chinese banks, japanese banks, korean banks. on a technology front, it's not quite as easy.

i think that would have an impact. in terms of drilling the unconventional side, you can -- 40% of russian rigs are coming from china. on that front, there's a resource. the offshore thing is the difficult one. i don't see how they can drill in the arctic without the support of the technology they bring and that can have a significant impact. that well in august is a massive perform reform event as well as an -- as well as a massive oil industry event. that's one to follow and it could hurt. >> i think unfortunately, we are going to have to cut it off there. i want to thank jonathan and jim very much for joining us. please join me in thanking our guests. [applause]

[captioning performed by national captioning institute] [captions copyright national able satellite corp. 2014] >> tonight at 8:00 eastern, the authors of they have dodd-frank regulation bill. former senators -- former senator chris dodd and former congressman barney frank. a brief preview of some of barney frank's remarks. >> we did something unpopular hat staved off disaster. here's the disadvantage politicians are at vis-a-vis economists. economists can invoke the counterfactual. they can talk ability why this was a good thing because they can talk about the counterfactual. what would have happened. politicians are not allowed to use the counterfactual. any elected official gets up and

says, i understand you're upset but it would have -- i ceyed it from getting a lot worse. it's so frustrating, i had a slogan which jim siegel's brother printed up which i was dissuaded from using in 2010 that said, things would have sucked worse without me. the problem was, we got all the negative political vibes from the tarp and very little positive, that's why it was tough to get the bill through. >> you can see this entire event with former house financial services committee chairman barney frank and former chairman of the senate banking committee chris dodd at 8:00 eastern on c-span. >> if you go back and look at coolidge, he was a conservative hero, his tax rate was gold standard tax rate, 25%.

that's what he brought the top rate down to. he fought like crazy. it started with wilson in the 70's. when you look at what the socialites said about cool nidge washington, how cold he was, he didn't meet with anyone, they were probably also from families that endorsed different policies. pecially alice roosevelt longworth who -- whose father had a different way, here was coolidge, prissy and cold and not giving favors. she said he looked like he'd been raised on a pickle. farmers don't wave their arms about a lot because a cow might ick them and it was kemp remital, he was a shy person, but it also had a political purpose he knew that if he didn't talk a lot, people would stop talking and of course a

president or political leader is constantly bombarded with requests and his silence was his way of not giving in to special interests and he articulated that quite explicitly. amity or and column nist shlaes will take your questions on "in detcht," live sunday at noon eastern on c-span2's book tv. > earlier this year, the presidential center talked about issues facing post-9/11 veterans. they spoke about veterans transitioning to civilian life. they touched on unemployment, addiction and the stigma of having mental illness such as post-traumatic stress disorder. this is an hour and a half. >> good morning.

thank you. good morning and welcome to the bush center. we're thrilled you're here. we're here this morning, of course, to examine the unique needs of our military service personnel and what we can to do help them intively their transition from act i duty. before we go any further, i'd like to ask everyone in the audience who is currently serving or has served in the military to please stand so we can reck nice you and thank you, thank you for wearing our country's uniform and protecting the freedoms we cherish in america. please stand. [applause] wow. thanks also to the family members, some of you have played the role of caretaker when your loved one came home injured from battle and we're grateful for your service and your sacrifice. the -- so let's give the family

members a round of applause as well. [applause] as you just saw in the opening video, the bush institute through our military service initiative, president bush supports all our nation's service members, especially those wounded in post-9/11 military service. it's a big year for our military service initiative. under the president's leadership, we are asking how we can best serve our veterans. so thank you, president bush, for your leadership. looking around this room, it's clear that we have a high powered who's who group assembled here today and we're thrilled to have such participants on the panels. i know we're all going to learn a lot. general case, thank you for being here this morning and for your leadership of our advisory committee. dr. biden, thank you for making the trip to warm, sunny texas. we look forward to hearing from you. thank you colonel mcfill howe, also seen in the video, for your leadership of this tremendous

initiative. we are thrilled to have you continuing to serve us, colonel. i want to recognize the good work of each of you here, the corporate nonprofit and government partners we have here today. you've stepped up to meet the needs of our service members and their families and we and they are grateful. thank you to the companies and citizens who fund thesing or -- organizations, they couldn't do it without you. our two organizing principles here at the bush center are leadership and freedom. we are always at -- in need of the first and at risk of losing the second this audience understands that better than anybody. you're here because you are leaders and off deeply held commitment to freedom. at the bush drenter, each of our initiatives is designed to help identify and develop leaders in the united states and abroad as we work on many fronts. our education initiative is providing innovative ways to train school principals to lead their campuses and is rethinking how best to educate students

during the particularly challenging years of middle school. our global health initiative is helping save the lives of those in africa by bringing vital health care to those most in need. our human freedom work hosts dissident visitor, most recently a chinese activist who is blind advocate for farmers and the campled and a north korean survivor. we had a guest who has a special program with first ladies around the world to help advance education, health and economic opportunity for women and children worldwide. finally, of course, we reason we're here today, the goal of our military service initiative is to honor post-9/11 veterans by empowering them to live productive, fulfilling lyes when they leave military service. and now it's my honor to introduce a man who is doing

just that. justin constantine. lieutenant colonel cans tan teen joined the united states marine corps after completing his second year of law school. while on active duty he served as judge advocate specializing in criminal law. as a reservist in 2006 he was deployed to iraq and was hit by a sniper. after recovering from his injuries in 2007, he worked with the u.s. department of justice, the senate veterans affairs committee and the f.b.i. not long ago he began his own business as an inspirational speaker. justin participated in our war or doctor warrior open golf tournament last september, that's how we got to know him and you'll recognize him from the video. justin, thank you for your service and being such a powerful example. thank you for your leadership and being here today. justin. [applause]

>> it's truly an honor to be here especially on such an important day. as a wounded warrior and post-9/11 veteran who made the transition to private sector during a tough economic time, i think i'm a good representative of today's newest, greatest generation. today we're going to hear from a number of experts on issues all related to veterans' transition. at the end of the day, it truly does take a village. i hope you realize how complicated a successful transition actually can be and what important roles each of you plays in it. after i was airlifted to a medical hospital, my wife stayed at the fisher house and was treated like royalty there. a couple of weeks later, at the i.c.u. in bethesda, a representative of the semper fi fund came to visit me. after that, a member of the wounded warrior project came to visit me, i was having surgery but he left a t-shirt in my bed

to remind me that america cared about my recovery. as an outpatient, i learned to play golf which is how i ended up here in september for the warrior open, which was a truly incredible experience for everyone involved. i developed the courage to open my own business after i talked to mike and attended entrepreneurship boot camp for disabled veterans at syracuse university. i've worked with a lot of corporations, including a handful of flag stobestone companies. now i continue to get my counseling for post-traumatic stress through a program that provides free and much-needed mental health care for post-9/11 veterans and their families across the country. i'm proud to be part of the hiring our heroes initiative, the campaign devoting great resources to all our transitioning service members and to the v.a. rehab program

i'm pursuing an advanced law degree. the list of p-1 programs that helped me in my transition goes on and on and every veteran in this room has their own list. i hope that by showing you my quick snapshot demonstrates that america is now truly -- has now truly stepped up to the challenges of supporting today's vets in an unprecedented manner. when you look at me, i hope you see the millions of other post-9/11 veterans and their families. today's veterans don't need a handout but a hand up. all your coordinated efforts are a critical part of our successful transition. some of us are facing some tough obstacles right now but we all want to be productive members of society. we all want to take care of our families just like each one of you. and often when given the opportunity, we end up being leaders in our community. the skills we bring to the work force are unmatched, especially considering they were forged in

the toughest work environment imaginable. president bush was obviously committed to the troops while he was in office and that hasn't changed since he left. i've seen his personal impact on a number of individual rhett have -- veterans that ising in support of inspiring. today's issues need to be discussed because they're good for all of america. i'm incredibly proud to stand behind president bush and what he's doing today an i'm equally le to to introduce you resident george w. bush. [applause] > thank you. justin thank you for those kind remarks. you're a better speaker than you are a golfer. [laughter]

laura and i were -- are thrilled you're here. we're particularly thankful that dr. joe biden came, it means a lot that you've come. i want to -- dr. jill biden came, it means a lot that you're here. we want to thank you for what you and the first lady do to help our vets. i want to give margaret a shout out, she was a fabulous secretary of education and she's doing a great job here. george o say hello to pace, commander in chief -- commander in chief when i was president, first marine ever to do so, looks like the last marine ever to do so. and miguel howe, awesome guy, running our military service initiatives. you've got a fabulous team and i want to thank you for your work. i want to thank the sponsors and supporters, it requires money to run these deals.

we thank you for your generosity. if you've got more capacity to give, we've got the capacity to receive. proud to be here with military service organizations, our analysts, i want to thank martha raddatz for leading the discussions. a lot of people ask me do i miss much about being president? nd the answer is really, no. i mess the people i served with. i miss air force one. i mean, in eight years they have never lost my baggage. i do miss saluting men and women who volunteered to defend our nation during war. many are coming home and are preparing for new missions as civilians and i intend to salute these men and women for the rest of my life. [applause] and through the military service

initiative, the bush institute is going to help. we're focused and we'll be relentless in serving our vets. since 9/11, more than 2.5 million americans have worn the uniform. they faced down our enemies, liberated millions and in so doing, showed true compassion of a great nation. they're the 1% of america who kept the 99% safe. and we owe them and their families a deep debt of gratitude. our country can never really fully repair -- repay our vets but we ought to try. from our earliest days, americans have resolved, as abraham lincoln put it, to care for him who has borne the battle and for his widow and orphan. when the continental congress met in 1776, one of its first

pieces of legislation created pensions for the veterans of the revolutionary war and since then our goth has rightly made supporting our veterans a high priority. private set citizens have also played an important role in supporting our vet -- our vets. service organizations to college presidents who have redesigned the curriculum for returning warriors, to employers who have taken a chance on a vet looking to learn a new trade. as a world war ii generation demonstrates, veterans tend to take the skills and values they learn in the military and use them in new and constructive ways when they come home. veterans have been some of the country's most successful leaders. many in public service, some in the oval office. including an 18-year-old kid who joined the military when he was 18, 41. unfortunately -- [applause]

unfortunately not every generation of veterans has enjoyed a warm welcome home. baby boomers remember what i'm about to say. when americans in uniform returned from vietnam, many rr shouted at and spit upon and they were called names and they were shunned. no matter who you may think ofut that war, the treatment our veterans then was shameful and wrong and should never be repeated. over the next five years, more than a million americans will complete their military service. like those before them they face challenges as they readjust to civilian life. thatush center, we believe after everything they've done for us, we have a duty to make their transition as successful as possible. we recognize that in helping our veterans we can unleash the potential of a generation of

resourceful, determined and experienced leaders. and in so doing, we will show the next generation of americans that military service is noble and worthwhile. when you sabblingfice for your fellow citizens, you'll find strong support when you come home. many organizations have taken up the cause. bush center has partnered with military service organizations to honor and encourage veterans through sporting events. we talked 5b9 the w-100 mountain bike ride. some of the riders are with us. talked about the golf tournament, you met the arnold palmer of the warrior open. those efforts are important but they're really not enough. they're not transformative enough. so a goal of the military service initiative is to help americans understand how they can support our veterans and empower them to succeed. support for our troops since 9/11 has been overwhelming.

but until now we really haven't asked important questions like who are these vets? and what do they need? and so together with the institute for veterans and military families at syracuse university, a fine university and a vital program, the bush institute has completed one of the most comprehensive studies ever conducted. this spring we'll publish the complete results so others can use this information to inform and enhance their work on behalf of veterans. here's a sneak preview, of the 2.9 million post-9/11 veterans, more than two million served in afghanistan or iraq. the averbing veteran spent one out of every three years overseas. 17% of vets are women.

when asked if they were proud of their service, 9 % of vets said yes. here's one of the more troubling statistics. 84% of veterans say the american public has little awareness of the challenges facing them and their families. turns out most americans agree. 74% of americans say they don't understand the problems facing our veterans. you might call this a civilian military divide -- a civilian-military divide. one lesson from the research is the divide is exacerbated by public perceptions that the veteran is either a hero or to be pitied. most veterans don't consider themselves heros or victims. they see themselves as americans who took on a tough job and did it well. they don't want lavish celebrations or expressions of condolences.

while it never hurts to say thank you, that's not realy the point. what most veterans want is to have their service understood and appreciated for what it is. a formative experience in their lives and a source of skills and values that prepare them to succeed in civilian life. in short, our veterans -- veterans have defended the american people and now they want to experience the american dream. our study also shows that post-9/11 veterans face even higher rates of unemployment than their civilian coubt parts. and that this is their top concern. the problem is especially intense for younger veterans. veterans with combat experience, veterans with disabilities, minorities, and women. sadly the costs of unemployment are not only financial. study shows that veterans without a steady job are more sceptible to problems like

depression, addiction, homelessness and suicide. so another goal of the military service initiative is to help veterans put their skills to work in rewarding civilian jobs. from our research we know that one problem is that veterans and employers have a hard time translating military experience. that's not surprising. i meep, you don't see many -- i mean, you don't see many job posts that say, wanted, experience hunting insurgents and terrorists, willing to work -- willing to sacrifice life for co-workers. what's a veteran supposed to put down? my last office was a humvee? we have a program to help them tailor their recruitment and hiring methods. we want to send a broader message that hiring veterans is not only the right thing to do, but a smart thing to do. i've learned you can always teach skills.

what matters most in an employee are qualities like character and values. work ethic and responsibility. that's what our veterans bring. when a resume says united states military that means you can count on the applicant to be loyal. to have good leadership, teamwork skills, and discipline. to an employer, that should mean a lot. across our country businesses are making wise choices to hire veterans. many companies have started programs to seek out and hire veterans and military spouses and we're proud here at the bush center to welcome some of the most innovative companies. 7-eleven and bank of america, disney, g.e., j.c. penney, j.p. morgan chase, usaa, wal-mart, blackstone and la quinta. these employers are leading the way but there's a long way to go before the employment gap is closed. part of our initiative, we're

going to learn from these companies' efforts. we'll share best practices and use our platform to spot programs that work. -- to spotlight programs that work. we'll help employers understand how to improve their businesses by placing veterans and military spouses in meaningful careers. and now i'm going to point the spotlight, in our audience today is ginger collins. i don't know where ginger is, are you here? yeah, there you go. here's the thing about ginger. she started work at la quinta inns and suites as a manager at the front desk in savannah, georgia. she married a guy named curtis he received orders for his third deployment. he leaves, she moves to irving, texas, good choice. [laughter] la quinta helped her. when they couldn't find her a management job, they put her on

the front desk near her home but what was important is they paid her as if she was a manager. she worked hard she earned promotions, then the army moved curtis again, this time to san antonio. she's now general manager at la quinta inn and suites in san antonio, texas. in short, by showing flexibility and care for our military vets and their spouses, la quinta has retained a loyal and experienced manager and showed great patriotism for america. we thank la quinta, and we're glad you're here, ginger. [applause] some veterans are ready -- are ready to enter the work force immediately, some need to update their skills. especially younger veterans who entered the military right out of high school or after a short stint in college. at the bush center we believe it's never too late to learn a new skill.

just ask laura. years ago she didn't think she oil tanker. an our country has a history of welcoming veterans back with the g.i. bill. as president i signed into law the post-9/11 g.i. bill. while many veterans are using the g.i. bill to advance their education, too many are having a tough time making it to graduation. some schools, the dropout rate for veterans exceeds 50%. unlike many americans struggling to make it through college, the problem isn't money. the problem is fitting in. veterans account for about 3% of the higher education population and many report feeling islated -- isolated from their classmates and professors. there are some great institutions that are doing good

work and attracting veterans and making them feel at home. s.m.u. is one. syracuse. a third shoutout for syracuse in a brief period of time, they're going great work. and texas tech. i've lost one political race in my life and that was to the chancellor of texas tech, ken hants. are you here, brother hants? too bad you're not here, you would have gotten good accolades for whipping me. but most schools have not done nough major universities love to have a diverse student body, and that is important. ut it is hard to imagine a more valueble contribution to campus diversity than a group of people who spent the first part of their lives serving others.