Briefing Under Secretary Mark Menezes-Department of Energy

USISPF Briefing with Under Secretary Mark Menezes, Department of Energy- Read out from the US-India Strategic Energy Partnership Dialogue

On July 24, 2020, USISPF hosted a briefing with Under Secretary Mark Menezes of the Department of Energy to discuss the recent U.S.-India Strategic Energy Partnership (SEP) Ministerial as well as future energy collaborations with India. Moderated by Nolty Theriot, Senior Vice President of Government Affairs & Policy, the panel included partnerships from a variety of industry members, including companies like Chart Industries, Tesla, Exxon Mobile, Cheniere Energy, Air Products & Chemicals, Freeport Industries, Xcoal Energy & Resources, and JTI India Projects. The discussion offered insights into government and industry perspectives on opportunities and challenges in the U.S.-India energy relationship.

Under Secretary Menezes highlighted the industry perspective, especially pursuing an ‘all of the above’ approach as a means of advancing economic growth and energy security. Following the second iteration of the U.S.-India Strategic Energy Partnership Ministerial meeting, the Under Secretary pointed to energy trade as a critical point of the bilateral relationship. To that end, he emphasized recent growth in this partnership. The U.S.-India Gas Task Force has already seen success in expanding gas and oil trade, the U.S. is now India’s fifth largest supplier of natural gas, and there has been an increase in crude oil and coal imports in India from the U.S. Looking forward, the nuclear advancement discussions also represented one important avenue to advance the partnership. Thus, the abundant energy supplies from the U.S. have been well utilized in meeting Indian demand.

Energy technology exchanges were also featured as an important component of this relationship. The launch of the Public-Private Hydrogen Task Force, together with the Ministry of New and Renewable Energy, the USISPF and the Department of Energy focused on the production of hydrogen from both renewable and fossil fuel sources. Under PACE-R, efforts towards research and development on smart grids and biofuels were conducted by collaboration between American and Indian academics, national labs, and private players. Bloom Energy was spotlighted as a private player leading in the area of fuel cell use. These developments occurred in conjunction with workforce development benchmarks as well. The Under Secretary reiterated the Department of Energy’s commitment to gender diversity and skillset diversity, and the work of the South Asia Women in Energy platform to this end.

The panel offered space for industry members to share their work and feedback. Companies were in agreement on India’s critical role in future energy sector growth, both as a collaborator and as a significant market. To this end, the need for pilot projects and the acceleration of regulatory body certification was suggested as a means to speed up this development. The support for a hybrid model, where no one fuel source would ‘win out’, was reiterated, and hydrogen spotlighted as a big part of this future. India’s use of its deep-water territory as a source of domestic crude oil and potentially natural gas energy was suggested to reduce its dependence on imports. Companies expressed that it would be beneficial to both countries if it was an American IOC that assisted this transition. They also highlighted the need for India to update its investor protection regulations to facilitate this. Additionally, in terms of regulatory changes, the parity in India’s tax structure for LNG in comparison to other fuels was also suggested as the key to unlocking LNG demand in the country.

Participants also spoke of opportunities in new avenues, including reduced-emission sources of energy, Gasification technology, in addition to carbon capture utilization and storage, were discussed as opportunities for significantly cleaner uses of indigenous energy sources. The growing Indian steel industry also offered growing opportunities to export metallurgical coal to India, a critical input for the industry that India does not produce in the right grade abundantly. As a win-win situation, it offered the U.S. a huge opportunity as it is a 7-billion-dollar market. On India’s end, the quality of U.S. coal, both metallurgical and low-ash, low-moisture thermal coal, is among the world’s best.

Finally, participants highlighted some regulatory changes that would increase the ease of doing business bilaterally. While Indian clients typically preferred flexible short or medium-term contracts (particularly given the current economy), long-term contracts were seen as most beneficial to the relationship, and investments in infrastructure and shifting market dynamics would be useful to this end. Facilitating face-to-face meetings with a wider consortium of Indian companies was also suggested as a way to expand the buyer segment. Finally, achieving more clarity and consensus on tariffs, aligning safety standards to make sense for U.S. companies, and streamlining procedures for India-based operations would go a long way in boosting business.

Under Secretary Menezes concluded the call by commending the industry members for bringing in cutting edge technology to use. While India has a great future of growth in the energy sector, bringing technology across all fuel sources to meet this demand in a manner that will reduce emissions is essential. The Department of Energy is committed to working bilaterally through potential hurdles, from tax policy to regulations, and in collaboration with industry members across both nations to this end.

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