Transcripts For CSPAN2 Key Capitol Hill Hearings 20141117 :

earlier we'd been talking about the neutrality network, and net neutrality, i thought, was a little catchier. i didn't think it would catch on, but somehow it did. >> host: the president this week, proofer wu -- professor wu, spoke about net neutrality. here's what he had to say. >> i'm weighing out a plan to keep the internet free and open, and i'm urging the fcc to do everything they can to protect net neutrality for everyone. they should make it clear whether they use a computer, phone or tablet, internet providers have a legal obligation not to block or edit your limit to a web site. and they can't let any company pay for priority over its competitors. to put these protections in place, i'm asking the fcc to reclassify internet service under title ii of a law known as the telecommunications act. in plain english, i'm asking them to recognize that for most more thans the internet has become an essential part of everyday communication and everyday life. >> host: tim wu, what's your reaction to what the president had to say? >> guest: very welcome. i thought that it was a terrific statement and speech. he went back to his campaign promise 2007 as a candidate, he said i'm second to nobody in my belief in net neutrality, and i couldn't have been happier the president came through with his support. >> host: well, gautham nagesh of "the wall street journal" is also joining us today. >> thanks for having me, peter. you have been following this net neutrality proceeding as close as anyone. how significant a step was it for the president to weigh in as he did on monday and in such specific terms? >> guest: i think it kind of hit a reset button on everything that was going on. the president was one of the few people who hadn't really made it clear what he thought. i think you yourself reported things were in some ways moving toward a slightly different approach, and i just think it was like turning a computer on and off, reset, and everyone right now is scrambling to figure out what's going to happen. >> exactly. everyone is scrambling to figure out what will happen. where do you think it will go from here? can fcc chairman tom wheeler do anything besides what the president has put out there? >> guest: it falls into one of these murky areas of administrative law. the chairman of the fcc unlike, say, the attorney general is not obliged to obey the president. he can't fire tom wheeler for not doing what he says. it's a longstanding constitutional rule. and so it is possible that tom wheeler can say i'm glad for your input, mr. president, but i have a different view of this. on the other hand, it's difficult to disobey the president, you know? he is the head of the party, head of the country. on the other hand, wheeler's going to have a lot of people in congress telling him not to do what the president says and, of course, industry has never liked this. so it is, frankly, even by net neutrality standards a new area of chaos. what i predict is there will probably be a lot of efforts to get wheeler to act, but you'd have to think the most likely outcome is that the tangle will delay things a little bit. and, frankly, to get not too much in the weeds, it may get tangled up in the question of whether the administration's going to allow comcast to take over time warner which is a slightly different issue, but i believe they're all going to get tangled up now. >> host: how so? >> guest: well, it's really not a legal -- well, it's legal and political. the main subject of the net neutrality rules is, of course, the cable and phone companies who offer us broadband internet, and so the proposed comcast takeover of time warner would have an enormous effect on, first of all, the danger posed by abuses of net neutrality principles, ignoring net neutrality principles, at the same time, also an opportunity in the merger to condition the merger to create net neutrality at least for comcast. and the merger needs to be reviewed by january or february, so the timing is also all coming together in one area. they have in some ways the same goals, and they're going to get all mixed up. >> yes. you mentioned the time frame. we reported last week that the fcc will be delaying the net neutrality rules until next year, and they have since confirmed that. when do you think there's a realistic timeline for this to happen? >> guest: okay. that's a complicated question. i -- there are a lot of people who are going to push wheeler and the fcc to ask. i, frankly at this point, don't know, but i think the pressure will be on wheeler and, in fact, the president might make another statement if he doesn't do anything by at least next spring. and also tom wheeler himself has said multiple times, you know, i want to get this done and get on to other things. there's something funny about net neutrality. you know how presidents come to office and say i don't want to deal with the middle east, and the next thing you know, they're dealing with the middle east? net neutrality is almost the same thing, everyone ends up stuck in it a little bit. i would imagine he would get this done in the spring. your second question is how would litigation affect this. well, there's nothing to litigate until the fcc actually does a rule, so i would say that will be act ii. we're still in act i or act one and a half right now, act two is litigation. >> host: tim wu, would you explain how title ii would affect internet policy and how section 706 would affect it as well? >> guest: wow, what a question. so title ii is the historic, most powerful authority that the agency has. it was part of the 1934 telecommunications act. and it gives agency new deal level of powers, incredible power, to regulate all communications in the united states that go with over a wire. i mean, you can't imagine anything more than that. and the cable and phone companies have long wanted to put title ii authority six feet underground. they don't, obviously, like the massive powers conveyed because it's regulatory, and back in the old days in the '30s actually all the way to the '80s, frankly in some areas still, it was used for rate regulation. classic utility common carrier regulation, so there's a lot of things they've never liked. the net neutrality under 706 or title ii superficially, it is not any different. but in the long run, title ii just gives the agency much more power to do things that it later decides are more important. 706, which has been talked about, is a much nay roarer -- narrower authority and, in fact, might not even be able to support full net neutrality rurals. it's very weak. if you imagine the fcc as a battleship, you can understand the title ii authorities as its main guns, the 17 or 18-inch guns that are meant to be used, and the 706 authority is more like a bunch of fire hoses. you could inconvenience some people, it isn't the main power of the agency. so it really has a lot to do less with this set of rules and many with the -- and more with the long picture of regulation over the long run. one of the things i think carriers are concerned about and the reason they so resist title ii is that lurking phantom or that lurking possibility of rate regulation. a lot of people in this country -- and not surprisingly -- feel that their phone bills, particularly the cable bills are too high, and you could imagine not now, but in some distant future a president elizabeth warren or something, you know, saying it's time to regulate these prices, and if title ii was alive and well, that would be an easy route. so that's kind of lurking in the background, and investors would notice that as well. so there's difference, i'm not commenting on the merits, i'm just giving you the sense of trying to align the difference. >> yes. you mentioned rate regulation. the president specifically said he did not think the fcc should engage in rate regulation. does that impact the likelihood of it to happen, in your view, and secondly, what about the adoption deployment question? how would that be addressed under title ii, or could it be addressed? >> guest: yeah, that's an interesting question. um, nobody is advocating rate regulation at this point, even the net neutrality advocates, and the president joined -- i don't think there's, maybe there's some consumer groups, but nobody believes that rate regulation is in the cards right now. what i discuss and what i pointed out is there's some potential for it. the power is there, but it wouldn't be used. in terms of access, you know, i've long felt that one of the things that is getting overlooked in this debate -- not everyone's overlooking it, but generally in the big picture -- is the question of what about all the people that don't have broadband, how are they going to get it? i would say no one's addressing that right now. title ii does give the agency more power to try to do things like mandate universal service like we did for telephone service back in the 20th century, and it collects money which right now goes mostly to subsidized rural telephone service which could be repositioned to try to create rural broadband service. so there's possibilities with title ii that a future president or future fcc chairman more specifically could say, you know what? we need a universal service program, and people all over the country need to have broadband. so there's more power for that kind of thing. >> professor wu, the broadband association put out a news release after the president's statement, and in part here is what they wrote: it is baffling why the president would risk continued broadband investment, deployment, economic growth and job creation by asking the fcc to reverse course on the very successful bipartisan policy that has now been in place for more than a decade. is something broken here? do you agree? >> guest: um, what -- they have been, the carriers have been threatening for, basically, all of their existence that, you know, if you do this thing we don't like or if you do that thing we don't like, we're not going to invest any more in our networks, and, you know, the president is calling their bluff. he's saying the public's concerned about the rising power of consolidated cable companies and phone companies. you know, we broke up at&t in the '80s, but a lot of the futures are coming back, particularly on the cable side prices seem so high, that we need an agency with the power to deal with this. so that's the president's calling of their bluff. and he says, you know what? you guys are making so much money here, we don't really believe you're not going to invest. we've seen how much money you've made. and, frankly, we're not rate regulating you, we just want regulations that will sn court. the reason there is no status quo, you can't refer to there being a status quo is because those laws were struck down. frankly, there's some hypocrisy in the sense that verizon challenged the last set of rules, got them struck down, and now -- i don't want to point fingers, but i am. they continue to sue to knock down every possib regulation, then they say, what? we have this great status quo, why should we change it? so the president's calling their bluff, long story short. >> mr. wu, so you mentioned verizon and the rules. whether or not whatever the fcc does will stand up in court seems to be a key question here and, of course, you're an expert on this. >> guest: yeah. >> the proposal we reported they were close to was something that reflected, i think, in part an idea you suggested, this hybrid reclassification. can you explain what you think the practical differences would be between that sort of solution and what the president called for? >> guest: frankly, my opinion, i didn't happen to think -- now, there are those that disagree with me -- that the differences would be that great. it is probably true that the president's approach -- it is true the president's approach a little more straightforward and has a slightly higher likelihood of surviving in court. i think those are its main advantages. it also creates a long-term possibility of like a universal service fund for broadband. there were two approaches on the table. i personally thought they were both okay, but the president has gone for the more straightforward, i guess, old school approach of what is called in jargon reclassification. >> and the president's approach, i believe, unlike the idea floated by yourself and others would require the fcc to establish there isn't adequate competition in the market. is there any possibility that reclassifying to title ii would decrease future competition in the broadband market? >> guest: is there a possibility title ii -- i think they're relatively independent factors. i mean, it's hard to -- right now there's not a lot of competition as it stands, you know? most people have cable, some people have fios, verizon fios, some people have google. so we're not looking at this environment where there's lots of competition out there and suddenly this is going to freeze things down. we're talking about an environment that already suffers from highly limited competition which is why i think the public has been clamoring for a lot more in this space. i don't think, i just don't think they're really related. i don't see the logical idea. i guess in some ways title ii actually could be used in very bold ways to try and increase competition should a future fcc want to. it creates the option if the future fcc wanted to of saying, all right, this is something the phone companies really hate, we're glad you built that out, now we're going to let competitors all use the underlying infrastructure and try and sell services separately. that's a confusing thing, but it's a way of introducing competition when there is something close to a natural monopoly. and that might be something that prompts competition in the future. that's a long way off. i should say, by the way, i also support -- i support the president's plan and always have. the other proposal we put out there was an alternative for people who found title ii too unpalatable for whatever reasons. [laughter] >> host: tim wu, the status quo, have there been problems currently that need to be addressed? >> guest: well, there was no problems because there was a net neutrality rule of some kind by my account since, basically, the '70s. there had always been some sort of fcc rule that said the phone companies or the cable companies don't get to mess with the networks on top of them. they have to just carry them. that had been the rule, it was part of the at&t break-up in the very early dial-up networks, part of the dsl, part of the early cable, there was a net neutrality rule of some kind for all the 2000s. what happened is that this year because of verizon's challenges, net neutrality rules were struck down in court, and that's why we're in this vacuum. so, no, there's nothing wrong with the status quo, the status quo was great, and i think it's raised all boats. that's why they need to restore the rule. >> host: this week we're talking with columbia law professor tim wu who is the coiner of the term "net neutrality." he also runs the study of the first amendment issues center at columbia university. his books include master switch which came out in and who controls the internet. our guest reporter is gautham nagesh of "the wall street journal" who was also with us last week when we talked with christopher yoo of the university of pennsylvania who doesn't agree with professor but. professor wu. >> as professor yoo said last week, he made the argument that allowing exemptions for things like zero rating or sponsored data programs could actually benefit consumers, particularly low income consumers. since we don't seem to be chose in this administration or fcc to something resembling a universal service program, what do you think are the trade-offs of those sorts of programs? >> guest: yeah, i think those, i think the programs aren't -- i think there are much better, more efficient ways to try to serve underserved communities than sacrificing the basic principles of the open internet. i want to go back to what was said earlier, you know, if it ain't broke, don't fix it. the internet has been an incredible engine of economic growth for this country mainly since -- and i believe for a lot of reasons, bun of them since the '80s the rule has been cable, phone companies, you cannot mess with us. it's like hands-off rule for cable and phone companies. so you could say, all right, well, we could relax that rule, and maybe they could do some stuff for poor people, but, you know, if you want to do stuff for poor people, maybe just subsidize it directly instead of destroying the engine which has produced so much economic growth and new stuff for consumers. you know, i'm all about programs that subsidize broadband access for poor people, i just don't think it's worth doing it by trying to, you know, give cable companies a way -- and the other thing is, you know, it's sort of a public relations thing. all right, we've got this new program for poor people, great, but it also offers the possibility of other revenue streams which we will use to try to suck money out of the internet economy. it's an attractive poster child to try to justify a much darker motive, so i am very suspicious of those plans. in developing countries, it might be a different story, but in this country, for example, when the cables company merge, okay, yes, you want to merge? be offer people below a certain income $10 a month cable broadband access or free for $10 a month. we know it costs you less than $5 a month, you're still going to make a profit, let's just have it. there's very direct ways to achieve those social goals. >> and how do you think that -- the president also called for the rules to be extended to wireless. the fcc has indicated they are going to attack wireless in some way after largely exempting them from the 2010 rules. how will this play out on wireless, in your view? >> guest: so wireless wasn't completely exempt from 2010. some of the discrimination rules were a little softer. i think most people view the internet as the internet at this point, and as i've been repeating, it's been a success story, and a lot of the innovation has been in wireless. so the basic rules of the road that are the internet, other than making some adaptations, other than that there's no reason to tinker with what has been soing isful -- so success of, i think -- successful, i think. the wireless sector has prospered as well. it's also worth pointing out when we say wireless, frankly, most to have the wireless network is also wire. it's only the last couple hundred feet that are wireless. so it can be exaggerated, that difference. and i think most consensus moving towards we just have one rule for the internet makes the most sense. >> host: part of this discussion has included the term fast lanes. what's your opinion on fast lanes? >> guest: yeah. i think slow e lanes and fast lanes have a destructive effect on innovation in the sense that it's very common sense. go back to the early days where if -- let's just go back to the early 2000s. so the fascinating -- fast lane idea or slow lane idea is carriers can say, oh, we'll make your thing go faster than somebody else's. so you imagine back -- the problem with it tends to interfere with competition, survival of the fittest. if you imagine back early 2000s when yahoo! was the dominant search engine, it's easy to imagine yahoo! pausing competition with google as opposed to trying to make their engine better, going out and signing a deal with all the isps to slow down google and speed themselves up. if that were the case, google would have never really gotten started, we'd still have yahoo!, you know? i could imagine myspace doing the same thing to facebook. slow lanes/fast lanes are simply insulation for the existing companies to try to wreak havoc on their better sometimes rivals. so i think we actually already have a problem with increasing power of the application companies, the heroes of last round google and microsoft and apple, so forth, pretty much facebook, they're getting more and more difficult to challenge. and fast lane/slow lane would just play to that and make, i think, i wouldn't say impossible, but incredibly difficult for a challenger to take on one of those companies. >> host: mr. wu, when you came up with net neutrality and pondering these ideas, i think it's fair to say it was very conceptual. did you ever imagine a day where the president would be delivering a statement in such detail like he did on this subject, and what do you think that says about the role of the internet and our society in general? >> guest: frankly, i'm shocked. [laughter] i was looking at the headlines the day after, and i was like, yeah, i never imagined this. when i gave the first talk on net neutrality in 2002, i think, 12 years ago, you know, it was to a half full auditorium, it was an academic paper, there was like, people are like what is he talking about? because no one was -- it was just kind of a weird proposal. and, frankly, at the time went nowhere. and i guess it is a comment on the fact that people have increasingly come to see the internet not as a sort of experimental toy or hobby, but as kind of an essential utility, frankly. i mean, when you set up a new apartment or a new house or a new business, you're like, all right, i need water, i need electricity, and i need internet. people just want it to be reliable and as cheap as possible, and it's become, as i think, an essential part of the economy. so they just basically want a rule, i think, and the president reflects, his comments reflect this, the four million comments reflect this, they just want internet to stay basically as it's been and suddenly not become like cable television, which people feel dissatisfying. yes, i do think it's come a long way. i am shocked or surprised, but bet on the internet -- the you know, the internet has surprised us many times. >> host: tim wu, andy kessler had an op-ed in "the wall street journal" entitled the department of the internet. very quickly: the internet cannot funk as a public utility. public utilities don't serve the public, they serve themselves usually by maneuvering through byzantine regulations that they help craft. utilities are about tariffs, rate pace base, price caps and other chokeholds that kill real price discovery and almost guarantee the misallocation of resources. >> guest: would you like me to ea iraq to that -- react to that? i'm actually somewhat in sympathy to that view, and i think it's something we've got to be very careful about as some of the rate regulatory schemes in history have not performed well and have tended to stagnate the industries. so i am very concerned about being too heavy-handed with the regulation. it may sound slightly in contradiction with what i said earlier, but i'm an academic, and i've studied the history, and i'm aware of that. however, it's very important to notice that net neutrality is not about the whole internet. it is only about the phone and cable companies delivering the internet to your house or to your business. so it doesn't effect, you know, the entrepreneur in the garage who's trying to think of a new program and launch it. it doesn't effect companies that are right now trying to prove themselves, vimeo or instagram, whatever. i guess they've sort of proven themselves, twitter, four square, tumbler. it doesn't affect these companies, it doesn't regulate the internet, it regulates the delivery of internet service. and while we have to be careful, we have to remember those are very different things and net neutrality, frank fromly, helps keep the -- frankly, helps keep the internet neutral. which they have shown a historic tendency to do, i'll tell you, throughout their -- especially the phone company over its 100-year, more than 100-year history. >> host: and the final question from gautham nagesh. >> mr. wu, it seems to come down at the end of the day to chairman tom wheeler. he has the toughest job in town. what -- does he have any wiggle room on this? what do you expect him to do, and do you think there's any way he can get through this and satisfy the many constituencies that are staring him down, protesting outside his home and everything else? >> guest: there is no way he'll satisfy all the constituencies, that is guaranteed. you know, washington -- and this issue in particular -- are a place where the middle is, you know, a you get run over right now which is somewhat unfortunate. i don't think this issue needs to be as partisan as it is, but it has gotten that way. i would suspect, does he have any wiggle room? well, the only thing i'd say is the wildcard of the mergers is in this game, and no one understands how that'll play out. but that is involved in all of this, and it is possible -- i think maybe probable -- that the fcc will turn its attention to the mergers for a while, put net neutrality somewhat on the back burner and perhaps the merger conditions or blocking the merger altogether, i think there's a decent chance to actually block comcast, and they say, listen, you know, this problem can be tackled from more than one direction. and that, for them, might justify different net neutrality rules. so that is the card he has to play that he hasn't played yet. >> host: tim wu, columbia university, gautham nagesh, wall street journal. thank you, gentlemen. >> from the u.s. agency for international development, the state department and the energy department. according to usaid an estimated 600 million people on the african continent lack access to electricity. the hearing addressed the electrify africa act and the power africa program announced by president obama back in 2013. this is two hours and 20 minutes. [inaudible conversations] >> subcommittee will come to order, and good afternoon. first of all, let me begin by apologizing for the lateness of convening this hearing. we did have votes on the floor, and members are making their way back, and i appreciate the patience of our witnesses and guests. in the 21st century, energy has become vital to modern societies, we all know that. we no longer have to shop for food each day because refrigerators keep food cold and preserved longer. whether in our homes or in the process of trade, cell phones require power to allow us to live more productive lives in the modern world. it is necessary that medicines and plasma be kept cold so they don't lose their potency. thus, it's both unfortunate and absolutely unnecessary that more than half a billion africans, especially in rural areas, live without electricity. perhaps the great irony is that africa has more than enough energy capacity to join the rest of the world in utilizing modern technologies that require energy supplies. approximately 30 percent of global oil and gas discoveries of the past five years alone have been in sub-saharan africa. yet currently only 290 million out of 914 million africans have access to electricity. and the total number lacking such access continues to rise. bioenergy, mainly fuel, wood and charcoal, is still a major source of fuel. hydropower accounts for about 20% of total power supply in the region but less than 10% of its estimated potential has been utilized. this hearing today will examine the current and prospective impact of u.s. government programs such as power africa and electrify africa as well as private international energy projects, and i thank our very distinguished witnesses who i will introduce momentarily for their leadership in making the dream of electrification of africa increasingly a reality. last year chairman royce backed by ranking members introduced h.r. 2548, the welcome trify african -- the electrify african act. h.r. 2548 passed 48th passed ths past may but has not had yet in the senator. days after the act was introduced, the administration i'm happy to say announced its power africa initiative and has committed up to $7.81 billion in various types of u.s. technical and credit assistance and other aid to build the capacity of the african power sector. it seems that ever few months there is yet another discovery of petroleum or natural gas in africa. nevertheless, african countries remain net importers of energy, and a distribution of power from the many new sources of energy in africa remain unfulfilled. this constrains trade and economic progress, social development and overall quality of life for the people of africa. even now one country, south africa, accounts for two-thirds of africa's electricity generation. all of africa produces less than 10% of the energy produced in the united states. meanwhile, people across the continent are forced to meet their energy needs by gathering or purchasing charcoal or coal, often putting women in dangerous situations too far from home. even when such fuels are safely brought back home, their use produces indoor pollution that all too often contributes to sickness and even death. the current situation cannot continue much longer. even with 13% of the world's population, africa represents only 4% of the world's energy demand, but this situation, thankfully, is changing. according to the report this year by the international energy agency, the iea, since 2000 sub-saharan africa has seen rapid growth and a rise in energy use by some 45%. so that's a good trend. we often speak of the rise of the african economies,, but the supply must match the growing demand for power. cell phones that are transforming all forms of commerce in africa must be charged. the consumer goods that are growing the african middle class' purchasing needs electricity. willing to accept the blackouts and power surges that have made life so difficult for so long. africans who have traveled or live somewhere else know this doesn't have to be their lot in life. in fact, even those who don't travel and perhaps have seen on tv or heard about powers available ought to be available to them just like everyone else. during the colonial period in africa, countries were limited in their industrialization, but that period is now long past. it must no longer be used as a reason why african countries are behind in the process of industrialization or power rah generation. -- parageneration. it's more due to inadequate or unrealistic regulation, underinvestment in power generation even when financing isn't -- is available, the disconnection of rural populations, high cost for energy and other factors. these obstacles and must be overcome, but they will require additional international collaboration, public/private partnerships and the will of governments and their citizens. we will not get to the point where we believe it is necessary overnight, but we will get there if we do it and take serious measures now and work robustly to bring this about. with regular electricity young students will be able to study under electrical light but also use computers to entrance their studies. -- advance their studies. homemakers will be able to stretch household income further and, of course, hospitals -- and i personally have been as well as our chief of staff for the committee, subcommittee -- we have been in so many hospitals where if it wasn't for a generator, that hospital wouldn't even have a refrigerator that could keep supplies cold as they must remain so. particularly plasma and certain medicines. our two panels today will examine international and national programs to achieve regular, sufficient electrical power in africa and private projects. the future of africa, of energy in africa is brighter than it has been in the past but, again, diligent efforts need to be -- we need to see today. i want to yield to my good friend and colleague mr. cicilline for any comments he may have. >> thank you, mr. chairman, and thank you for your leadership. when you say the prospect of energy in africa is brighter, it's in large part payoff your relentless -- because of your relentless leadership on this issue, so i want to thank you for convening this hearing and thank our witnesses for being here today. it's very obvious that the lack of power available throughout the continent has many negative consequences. it constrains economic growth, it undermines human resource development, it hinters quality of life -- hinders quality of life progress and particularly limits the quality of social services and public safety. so the impact both on the economic prosperity of the continent as well as on its ability to meet many of the urgent imagines is severely compromised by lack of energy, and this hearing will give us an opportunity to really ac-- assess the current and prospective impacts of electrify africa, and i'm looking forward to the testimony of our witnesses and thank you for being here. i now defer to the ranking member. laugh- [laughter] >> to mr. stockman for any opening comments he might have. >> mr. chairman, i'd tell you on several accounts or occasions as the republic of congo and, unfortunately, there i contracted an unwanted visitor in my body and had to go to the hospital. and that's when i found out the need for refrigeration and the need for antibiotics. and it actually started my journey into trying to ship antibiotics and other medicines to africa was my own personal experience of having none. and the importance of energy. and the importance of having -- and ironically, here's a country, the republic of congo, who's, you know, producing quite a bit of oil, yet they didn't have enough oil at that time -- i think someone donated lights to them, and i went back and they actually had streetlights, but they didn't even have enough energy to generate electricity. as we were driving down the streets, you've been over there, they fill little coke bottles full of gasoline and kerosene. and you just marvel at here is a country that's of great wealth, natural wealth, and yet its own people are very poor and restrictive in terms of what they can get. and it is mind boggling. i know being from texas i have 87 refineries in my district, produce half all the gasoline in the united states. and i was marveling at the lack of infrastructure for the ability to harvest their own oil for their own needs. and so to me, i've always been interested in what a country, an africa has versus what it needs, and the confusing outcomes of when you don't have that infrastructure and you don't have that ability to refine, and it's unfortunate. i know there's a great deal of what people would call corruption, but on the other hand, the lack of knowledge and how to take their natural resources and make sure it benefits their own people. and it's kind of sad to see that, you know, difference. you have great wealth and great poverty and yet little electricity. i went back there again and they had, i think the french donated these lights, or solar power lights so when you drive down the road, at least you have streetlights and they're individually, ironically, powered by the sun. but the time before that i was driving down there, and the only lights that were existent in the capital were the lights from the car. and you could see all these people walking in the streets, and the only lights that they had really were from our car lights which was a little bit alarming. and i think this is why this hearing's very important, and i think this is why we need to in the united states facilitate helping them take their energy and instead of exporting it, but to use it in their own countries. with that, mr. chairman, i'll yield back. >> i thank you to my friend from texas. i'd like to yield to the distinguishing ranking member of our committee, ms. bass. >> thank you very much, mr. chairman, as always, especially for your leadership on calling this particular hearing. you and i have worked for a long time on this issue and are clear in understanding that one of the most important needs on the continent is building the infrastructure so that the type of trade that you and i would love to see happen can take place. i want to thank our distinguished witnesses including the senior u.s. government officials from the state department, usaid and u.s. doe as well as energy experts and advocates from civil society. i look forward to hearing your perspectives on the challenges of energy resource development in africa including an assessment of the economic national security and human development aspects related to the energy sector. to help address the challenge, we all know that president obama launched power africa last year which is aimed at doubling access to electricity on the continent. the first iteration of power africa sought to provide more than 10,000 megawatts of new, cleaner electricity and increase access to at least 20 million more households and businesses. additionally, during the historic u.s./africa leaders' summit in august of this years, electrification in africa was a stall point of discussion with -- central point of discussion with african heads of state. in the midst of these talks, president obama announced a further commitment of $300 million to the power africa initiative. and this new commitment would increase the initial pledge of 10,000 megawatts to 30,000 megawatts. and the hope is that this creates an opportunity to reach up to 60 million households and businesses. so based on these early successes, it's critical that we continue to invest in initiatives that bring increased electricity to the african continent. that's why i was proud to join chairmans, royce and smith, as well as ranking member engel to introduce the electrify africa act. and we are hopeful that that will move forward in the senate. so i look forward to today's testimonies, and i'm interested in what more congress can do to be of help. >> thank you, ms. bass. i'd like to now introduce our three distinguished experts, all of whom have made major contributions in the past and present who can authortively speak to this subject. beginning first with mr. jonathan elkind who serves as acting assistant secretary for the office of international affairs. having previously served as principal deputy assistant secretary for the office of policy and international affairs from '09-2013. prior to joining the energy department, he worked as a senior fellow at the brookings institution focusing on energy security and other foreign policy issues. he also founded and headed a consulting company, served on the staff of the u.s. national security council, and in a variety of other government positions, working for the vice president of the united states at the u.s. department of energy and at the council on environmental quality. we'll then hear from mr. eric postell who began as assistant administrator for the bureau of economic growth, education and environment in march of 2011. in october of 2014 he was asked by dr. shaw, the usaid administrator, to serve as the assistant to the administrator for africa. mr. postell brings to the position more than 25 years of private sector experience working in emerging markets, especially those in africa. he has also founded an investment banking consulting firm focused on emerging markets, served as a commissioner of the u.s. helping to enhance the livelihood of people around the globe commission and worked for citibank tokyo. and then we'll hear from dr. robert eye court who serves as deputy assistant secretary in the bureau of energy resources. he is responsible for the transformation of energy systems to achieve greater efficiency and cleaner performance through the use of market forces and innovative financing approaches that leads to bureau's effort toss reform electricity and power systems and develop more efficient and reliable national and region aleck terrorist markets. mr. ichord has a long history of u.s. government service in the energy field having worked for the energy research and development agency, the u.s. department of energy and, again, usaid. so thank you for being here today, and i'd like to begin with mr. elkind. >> good morning -- or good afternoon now, chairman smith, ranking member bass and members of the committee, subcommittee. i'm very pleased to be here to testify on behalf of the u.s. department of energy on the future of energy in africa. the department of energy's office of international affairs focuses on some of our world's most pressing global energy challenges from promoting energy security to fostering international collaborations in science and technology, from addressing market volatility to facilitating long-term effort toss mitigate climate -- efforts to mitigate climate change. we work to leverage the technical expertise of the department of energy headquarters and our national laboratories in energy technologies, markets and policies. so in that context, i am very pleased at the interest of the subcommittee in energy development in africa and propose to sketch some of the major contours in those markets and some of the department of energy's activities. africa, particularly sub-saharan africa as the chairman noted, is experiencing rapid economic development can. sub-saharan africa is the world's second fastest-growing region, in fact. the world bank reports that economic growth rates in sub-saharan africa continue to rise having been 4.7% growth in 2013 and forecasted at 5.2% for the current year. thus, many african nations are positioned to become increasingly important both as energy consumers and as energy producers. the international energy agency and the report that the chairman referred to issued just this week estimates that the sub-saharan african economy will quadruple in size, growing by 80% between now and 2040. even with robust economic and energy development in the coming years, unfortunately, sub-saharan african countries will struggle to meet the energy needs of their people unless they can find effective, new policies, technologies and investment, most importantly, to spur sustained energy development. while 950 million people in africa, according to iea, will gain access to electricity between now and 2040, over half a billion will still lack it. if i turn to oil development in africa, sub-saharan africa has long been an important player in the global oil market, and its role will only grow in coming years. oil production in the region has doubled since 1999 and now accounts for 6% of global production, and in addition sub-saharan africa accounted for almost 30% of oil and gas discoveries of the last five years. sub-saharan african oil production is projected to frau from 5.3 million barrels a day in 2013 to predictionly 6.2 million barrels -- approximately 6.2 million barrel per day by 2020. at present more than 80% of current production is exported, but with economic growth driving demand for oil and oil products in sub-saharan africa, we expect that the region's oil production will shift to much greater domestic use. on the natural gas front, major new discoveries are generating excitement in global markets and will be, will provide fuel for africa's growing economies. among the countries with the most important emerging gas developments are mozambique, tanzania, uganda and madagascar where there have been major steps made toward commercial development of newly-discovered resources in recent years. in the power sector, electrification rates in sub-saharan africa are, unfortunately, among the lowest in the world, as has been noted. north africa, by contrast, has electrification rates of over 99%, but in sub-saharan africa, the rates are average only 32%, meaning that more than 620 million people lack access to modern energy services. and as the chairman so rightly and appropriately noted, this translates into very concrete impacts on people's livelihoods and, indeed, their leaves. their lives. so with this context in 2013 when president obama underscored the u.s. commitment to africa's energy development by launching the power africa initiative, he also asked for the engagement by the department of energy, and so in june of this year secretary moniz together with his ethiopian counterpart, the minister of energy and water, convened a ministerial. it drew together 500 participants, 42 african countries, all the relevant pieces of the u.s. government, 20 ministers from across northern and sub-saharan africa and, importantly, both african and u.s. companies along with civil society, academia and other organizations. we focused on clean energy technologies, increased power generation, rural electrification and regional power pools, oil and gas development, policy and regulatory issues, investment opportunities and the requirements for finance. in the wake of the african ministerial, the department of energy is working with africa's leading economies to help them meet their energy development goals. i'd like to give a couple of quick examples of work that we're doing. in the renewable energy arena, our national renewable energy laboratory is working with angola's ministry of energy and water to deliver, train the trainer program which will help to make available more instructors and technicians to install photovoltaic systems in angola. in the arena of energy efficiency, doe is working with a number of west african countries through the economic community of west african states to develop an efficient lighting policymaker's tool box. this will bring together information on lighting standards and labeling and help raise energy efficiency across that entire region. in the natural gas arena, in addition to working with the government of tanzania to develop natural gas training for university students and government officials, my counterpart -- the acting assistant secretary for fossil energy -- will travel to a series of sub-saharan african countries in early 2015 in order to engage on the policy environments that are taking shape in some of these critical frontier countries. the department of energy has a strong interest to forge closer links between and among our counterpart government agencies and african governments. we also feel it absolutely essential in view of the investment needs to work very closely with u.s. companies. we bring to the table particular expertise in regard to energy technologies, markets and policy, and we view this as a strategic opportunity for the united states, for our companies and also for our partners in africa. so the bottom line is this: energy is the cornerstone of an african strategy for poverty reduction and economic growth where my colleagues on the panel are more expert, to be sure. doe, for its part, however, recognizes that economic growth is closely linked, intimately linked to the availability of energy services to meet the needs of african companies and citizens. that is why we are working with private sector and public sector partners both in the united states and across africa, to help africa unleash its full energy potential for the benefit of african citizens and also for the benefit of the united states. thank you very much for the opportunity to be with you today. >> mr. elkind thank you so very much. mr. postell. >> thank you, chairman smith, ranking member bass, members of the subcommittee. thank you for the opportunity to appear before you today. president obama's power africa initiative and the leadership of congress, including members of this subcommittee, highlight the extent to which we are all united in addressing one of the core obstacles to africa's development; the lack of access to electricity. as all of you have noted, without a dependable supply of electricity and an enabling policy environment, the private sector will not invest significantly in african economies, and without private sector investment, local economies, entrepreneurs and citizens cannot they've. power africa, a whole-of-government effort by a dozen u.s. government agencies, is working to address this obstacle. to date, more than 80 private sector partners have committed to invest over $20 billion in power sector development. power africa has already helped close deals that will generate more than 3,000 megawatts of energy, providing power for more than five million african homes and businesses. for example, with our support the nigerian government privatized five generation and ten distribution companies. these companies in addition to other planned investments and privacyizations are expected to -- privatizations are expected to produce an additional 8,000 megawatts of power in the coming years. at the same time, another member of the power africa team -- the overseas private investment corporation, opic -- has already committed $410 million in financing and insurance to private sector partners' projects. for example, its $250 million financing for the lake wind farm in northern kenya will become the continent's largest wind project when it is complete. power africa focus be countries have committed to undertake tough policy reforms in their energy sectors. in august the millennium challenge corporation, mcc, signed a compact to invest up to $498 million in ghana's electricity sector. this compact includes a tough, includes tough policy reforms needed to create a viable, sustainable energy sector in order to stimulate private investment. power africa has so far been able to catalyze commitments in excess of $4 billion for the development of ghana's energy sector. power africa's successes extend to companies as well. for example, general electric is one of the companies making commitments in that ghana situation that i just described. as another example, during meetings in a nigerian trade mission to the united states that was hosted by the u.s. trade and development agency, these discussions enabled a company called itron, a company based in liberty lake, washington, to sell nearly $400,000 worth of electricity meters to nigerian distribution utilities. and they're discussing right now another order worth upwards of $2.6 million. there's a u.s. tda-sponsored follow on activities plan, they're expected to lead to even more sales by u.s. firms. power africa is also facilitating investment in the small scale energy solutions that are so crucial to reaching rural communities with no access to those national grids. in september the african development foundation and its partners chose 22 winners of power africa's off-grid challenge, a competition that promotes innovative solutions for off-grid energy. in another small scale project with an outside impact and an example of something that one of you mentioned, power africa is funding the procurement of generators for an ebola treatment unit and other facilities in liberia that will power water pumps, lights and even the washing machines used to clean health workers' hospital scrubs. some of these basic building blocks that we need to help defeat this epidemic at its source. at this year's african leaders' summit, as mentioned, president obama a renewed our -- renewed our commitment to the initiative and pledged to seek a new funding level of up to $300 million in annual assistance to expand the reach of power africa across the continent in pursuit of a new aggregate goal of 30,000 megawatts of additional capacity, thereby increasing access if we hit that goal by up to 60 million households and businesses. other donor partners also seized the opportunity of the summit to announce major new commitments to power africa. today, as noted before, 600 million africans don't have access to electricity. together with our partners in congress such as you, our partners in africa, other donor nations and private businesses, power africa is working to greatly increase access to reliable, cleaner energy. thank you, mr. chairman, ranking member bass and members of the subcommittee, for your support and your leadership of this very important initiative. i look forward to your questions today. >> thank you. it is we who thank you for that leadership. i'd like to now yield such time as he may consume to dr. ichord. >> thank you, chairman smith, ranking member bass and subcommittee members. i appreciate this opportunity to discuss the future and how we are using our foreign policy tools to support stability and economic development in africa through increasing access to electricity and laying the groundwork for a stable and prosperous energy sector. .. one of the strongest in my 40 years in government in terms of work an these issues the energy bureau is focused on three main areas. one, promoting good governance as it relates to managing oil and gas resources but this is also important for the electricity sector as well. second increasing access to electricity and third, increasing renewable energy technologies. let me turn to governance. poorly-managed resources can stifle development and feed corruption. with the goal of helping countries avoid these issues our energy governance capacity initiative offers governments on the ground technical assistance and training, both in the region and in the united states. on some of the most difficult issues facing this sector. for instance, management of revenues, incorporation of best practices into laws, and regulations. protecting the people in the environment from sector impacts. under the program we're currently engaged with liberia, sierra leone somalia, tanzania and seychelles. the large offshore gas discoveries in mozambique and tanzania we're aware have global and national significance. we'll look to insure their sound development as these resources are developed. transparency in the key component of good governor nance and we're actively involved in the extract tiff industries imperative initiative. eiti. through eiti. representatives of government, civil society and industry work together to produce reports that disclose information about a country's national resource revenues allowing citizens to see how much their natural resources are worth and how much they're used. currently 18 countries in africa are eiti compliant and four are eiti candidate countries. currently we heard about the statistics on the extent of energy poverty in africa. we're not only working to power africa but involved in multilateral efforts like the sustainable energy initiative for the united nations and the world bank and we're helping to track investment needed to expand energy transmission and distribution, all key seek source. as an active participant in the power africa team state is focused especially on the policy framework for investment and reforms necessary to prove the enabling environment and reduce the risk for investors. through our consistent diplomatic engagement, through our embassies and through african embassies in washington the state department is working to insure transactions, emphasis of power africa lead to structural policy and governance changes that will encourage even more investment. we have positioned a senior career foreign service officer in the region working with our embassies to focus and enhance our diplomatic efforts and reduce costs. we're upgrading energy knowledge and skills of our economic officers in the emba is sys and in the region. we're very excited about the beyond the grid initiative, subinitiative that is part of power africa. and which, and we're working globally as well as in africa and looking at promising business and technology models that will help provide energy access to rural population. we have helped forge a link recently between power africa and the sustainable energy for all initiative with its goal of universal electricity access for 1.2 billion people around the world and sub-saharan africa that don't have access to electricity by 2030. very ambitious goal but one that is very consistent with the electrify africa and power africa objectives and where the european union and others are also making large commitments to increase electricity in africa. our power sector program provides expert advice to help strengthen south africa power pool and the association of energy regulators that oversee this developing market. we see regional power pools as critical to creating the larger markets that can attract investment and tap the diverse resources in africa. we have our unconventional gas technical engagement program working with countries to help them develop and look at the potentials for their unconventional natural gas resources and do so in a sustainable and safe manner. we are working with many partners around the world. for instance the international renewable energy agency has a strong emphasis in africa and our initiatives will link with many of theirs and improve the synergy with power africa. in conclusion, mr. chairman, sub-saharan africa stands at a crossroad. expansive renewable resources and emerging oil and gas sector will be an integral light to bring light to the continent and lifting it out of poverty or be a catalyst for instability or core are upion. we feel the administration and con have a historic opportunity to enage gauge across the energy spectrum to look at these challenges. i look forward to these questions. >> thanks very much for your testimony. i would like to begin with a few questions and yield to my distinguished colleagues. let me ask you first what african countries prioritized electrification? go through some of the countries and obstacles that we and others are facing trying to assist? are the u.s. and other investments meeting the challenge or are there gaps? has enough been allocated to this endeavor to make it happen sooner rather than later? operationally, is the emphasis on national governments or state governments or both and local? if you find a national government unwilling to be as transparent as we would want them to be do we look to bypass and go to a state? obviously in the u.s. state and local governments carry heavy burden of providing electricity. is that model being replicated in africa? in terms of the electrification, obviously we have state-of-the-art electrification here and i have visited virtually every electricity plant in my state, most of them, not all of them, over the years and they have obviously many environmental safe guards. scrubbers when it is coal to insure what comes out the chimney does not lead to disasters healthwise. because of pollution. are those kind of environmental, sustainable, best practices being incorporated what we do? seems to me there is so much on the shelf capability and knowledge that it would be a shame if that was lost. if you could spend a moment on that as well. how are and where are the african power leaders, especially the equivalent to the nco corps, people that run the generators? and where do they get their education? are they partnering with electricity companies here, or you know something that they're picking up in college, junior college? who is training those who will run the plants so that they will be run is safely and effectively. and finally, beyond the grid initiative under power africa is intended to facilitate investment in small small scale energy solutions. do you think such project cost interest more african entrepreneurs in creating means to supply energy to underserved communities in africa? if you could speak to those questions i would appreciate it. >> thank you for your questions, mr. chairman and thank you for your leadership on this entire topic and introducing the legislation. each country in a different place. each country is focused on increasing electrification. you see this for example, witnessed in the mcc compacts in tanzania and ghana. both governments realized lack electricity is holding back their growth. there are a number, i won't go through the whole lift but a lot of countries realizing how important this is, to their growth, to their health care system, to their education system and are looking to really do a lot more in this area. concept power africa are to identify what the gaps are to work with the governments and private sector investors to try to solve them. we've seen cases where private sector investors from the united states and elsewhere tried to do deals and they run into a roadblock. that is where transaction advisors step in to say, how do we solve that? >> the gaps issue, is that something you could summarize and provide to the subcommittee so we get a sense of what you are truly encountering? >> yes we can. >> we can try to be helpful with those governments. >> we can do that. the, in terms of local and national governance, obviously there are often national policies that set the energy policy and the tariffs for an entire country, but there are a number of local aspects that also come to play. and we, work with all of them in this same roadblock approach to figure out what are the challenges and how do we deal with that. the question of, environmental and social safeguards is very important. and you're absolutely right. we don't need to reinvent the wheel. we need to make sure that, we use state of the art and so, all, all the projects for instance, if there is a component that involves the development banks, each one of those banks has their own policy for checking these things and working with the governments and making sure that the projects fit those standards and don't introduce some really poor practices. in terms of the education and training, there are local institutions that offer, in some countries, training. in other cases people have education from the united states or europe. but it is an area where there are short falls. there is actually a long-standing partnership that usaid funds which involves a lot of u.s. utilities and u.s. regulators and they work in combination with people in the individual countries for this very reason so that they can have very technical interactions from one utility technical person to another. and it is to try to increase that skill level because there are definitely gaps and we need to keep working on that. similarly -- >> if i could, those technical people come here to learn or do our people get deployed there? >> both. >> both. depending on circumstances. >> how large of an operation is that? >> it is a modest sized, very economical system where each year we get requests from different countries but not revicked to africa but africa is a big participant. and we look at them and match them up with different utilities. i don't know time i had probably utility in new jersey or california utilities or whatever but they match up, match them up with utilities that have the expertise that they need. so, and then they have these exchanges and interactions. >> mr. postel for the record could you provide the committee sense what that is, a summary? >> yes we can. lastly before i turn to my colleagues, absolutely and beyond the grid we, having local organizations and entrepreneurs seeing the business opportunities is part of the objectives. that's sometimes where some of the credit guaranties of opic or usaid can deal with the risks and introduce them to interesting business opportunities which they know very well because some of these remote areas they might not much better than a large company but i'm sure on some of these points my colleagues have things to add? >> thank you. >> chairman smith, i would add a couple of points if i may. first of all the, i mean, we all acknowledge the, difficulty of providing broad answers because of very great diversity of the different circumstances in different african countries and indeed rural versus urban settings. but within that, with that danger i will attempt to, to respond. in regard to the question about cutting-edge development of the power systems that, the grid centralized systems, one of the areas we felt is very, very important and a number of our agencies have worked on from different vantage points, different perspectives of our respective missions is the business of utilization of associated gas from oil development projects. the, historical experience of the flaring of natural gas is understandable when infrastructure is lacking but when infrastructure manages to be lacking, then for protracted periods of time into decades then that's really a critical lost opportunity and so one of the things that we have been focusing on in our policy dialogues with african countries and indeed one of the things we're focusing on at the level of identification of mutual interests between u.s. companies and opportunities in, in certain african countries is this area of gas capture for power generation together with the trade and development agency this summer, the department of energy organized a reverse trade mission that took leaders from a couple of different african countries to the houston, texas, area for a series of meetings with companies involved in gas development, gas sector development. so we think there's an area for potential opportunity there. in regard to the beyond the grid initiative and some of the potential for growth with african entrepreneurs from the department of energy perspective one aspect of that we have been focusing on is the importance of proper performance of products in the marketplace. so it is of course easy to spoil the market when you have substandard products, be they for off grid or for solar lanterns, another area where department of energy has worked. so we're working with our colleagues at aid in particular to look at the question how to make sure that off-grid lighting systems and solar systems and hybrid systems that are a mix of renewables and either diesel or natural gas, that these are, that these are, that they actually perform in the way that is advertised, so then you see a healthy development of that entrepeneural opportunity going forward. lastly on the issue of the training, i would say from our perspective this is an area both of huge interests to u.s. companies but it's also in terms of gaps, i mean, lots of, shall we say headroom, opportunity for growth. i am sure that members of the committee had the experience as i and my colleagues have, for example, as a comparison, of traveling throughout the gulf region, and when one is in the kingdom of saudi arabia or united arab emirates or kuwait, many other countries where there have been historical, very long-lasting education and training and company relationships, what that translates into is not only high quality energy development, it also translates into huge opportunity for u.s. companies because in many cases our counterparts are familiar with standards, u.s. approaches, u.s. vendors. so huge opportunity for growth there. it is an area that dod is looking to try to develop some ideas on. thank you. >> may i make a few points? >> yes, doctor. >> i have five points i will chime in here on that relate to the gaps and challenges. the first is in a sense the common problem throughout the subcontinent is related to the financial position of the utilities. so since one of the challenges is how to strengthen the regulatory environment, the pricing environment and move toward more commercial utilities because then the investors will know that they have a credible off-taker for the power that they're generating. clearly we've done a lot of work through power africa on power purchase agreement, developing standardized approaches. opec has been very active in this area and that's very important. at the same time need to have a solvent, viable energy system in order to have long-term investment necessary to develop a sector. second is i think mr. el kind's point about the gas and upstream sector. different ministries like in nigeria, you've got to in a sense try to work to help them be a catalyst for them to at least try to do better planning so that you can insure that the oil and gas that's being developed in the country is going to be available to meet the needs of the countries. ghana is a very interesting example where they want to develop a lot of capacity and yet the oil and gas development has been slow in coming. the point about urban and, subnational i think is a very important point in africa as well as in other regions because the urbanization process is creating the centers of, of buildings and industry. and the mayors and the subnational leaders of those entities are becoming more and more important as this process goes. and as you know, we haven't talked about urbanization. but urbanization is really still at embryonic stage in sub-saharan africa is less than 30% and by 2030 you will have only 54% urban. but it is rapidly growing. working with cities in urban areas is very important particularly in areas like energy efficiency. >> fourth area is the entrepreneurial development and local institutions. here in many cases it is very important to work with the local business community which we are. also focus how we develop more capacity and receptivity in the local banking system so that they can lend for some of these projects. so it isn't just dependent on international capital coming in. because you know that the much of the international capital, particularly private and venture capital sees huge risk and very risk-averse in terms of coming into a lot of these areas. the local banking sector becomes very important. we've seen in nigeria and some other countries the local banking system can if developed play a key role. finally, i would say a lot of actors that are playing in this field. think it is very important and we are of course working very closely with the world bank bank and african development bank and others to have coordinated approach to address the range of gaps institutionally and otherwise and that we're trying to leverage our money effectively in that process. >> dr. eye cord, thank you very much. ike cord. miss bass. >> i want to raise a few issues raised by others with concern about power africa and implementation. so i believe, mr. elkind, you were mentioning african entrepreneurs? i think you mentioned that. i wanted to know to the extent that the african diaspora here in the united states was getting involved or what type of outreach are you doing? so a couple of questions. the african diaspora specifically but also just small businesses. i constantly encounter small business people who want to figure out how to be connected and just can't can't quite make the connection. you mentioned the trade mission and in houston and i wonder if many others are planned? i will make a pitch for southern california because it seems like reverse trade missions don't make it to the west or maybe i'm just not aware of them. so that's another issue. then i want to ask you about the development of the infrastructure on the continent. so why don't i start with those couple questions? >> thank you for your questions. i'll start but i'm sure my colleagues will add in. we agree with you that we need to not only start but continue with a lot of outreach to reach all different sectors of interested people. small u.s. businesses, diaspora, large u.s. businesses and so forth. so, we are, we're making progress but we have more to do. there are some cases already where there have been diaspora interests. i understand that is, for instance an ethiopian american business that is going to be manufacturing smart meters for ethiopia's electricity company and i hope there will be additional successes in the days ahead. as you allude to, many members of the die as pour renault very well the business opportunities and they have through their own hard work accumulated capital. and so they're ideally suited to participate in different aspects of this. and in terms of being connected, we have created a one stop shot on the usaid website. there is a page. in worst case send an email, power africa at usaid.gov. we use the one-stop shop to reach out all the u.s. government entities involved depending on circumstances and make connections because we don't have, we have the view that people shouldn't have to hunt all over the u.s. government to figure out who to talk to. so that is why we created this one-stop shop that will direct them and save them that trouble. shouldn't be that difficult for american taxpayers. >> you know what any really would like to help you with that as well. so maybe reaching out to members about congress, others might want to be involved. african diaspora, as well as african-american die as pour a, who are veried are interested in participating in power africa. >> we'll take you up on that. please do. another thing came up and came up when the bill was being heard here in in committee. as we are in power africa, supporting development of the infrastructure in, on the continent. considering people in the rural areas or even right in the is it, in neighborhoods, do not have electricity. what always horrified me, idea of women giving childbirth using light on their cell phone to deliver a baby. so i'm wondering about that. >> related to models of rural electrification are changing a lot. it is really a revolution that is occurring in which the drop in prices for solar systems, the advances in telecommunications and cell phones, i just came back from bangladesh. some of the models and commercial approaches that are being taken i think are going to be extremely important for africa because you have such, one large rural populations, two, without access. you have small, relatively small loads. the economics of extending the grid by utilities that don't have the money to do it. or don't necessarily have the same kind of commitment to extend systems because in many cases, struggling to just meet urban requirements. >> in urban i was referring to neighborhoods. i think in commercial areas. >> issues related to decentralized approaches are relevant to some of the your ran areas as well as to the urban areas and i think it was also your question about the entrepreneurial opportunities to work with u.s. companies. >> right. >> who are at the leading edge of these technologies. we're working with a california company that has developed a nano grid approach in bank la wish and -- bangladesh and that is the kind of infocation i see see we can try to focus on to take a closer look at africa and the market opportunities there. >> you're telling me that it is a part of the initiative? >> well, i think that is why i say we're excited about beyond the grid because in a sense we're in a early stages here but a lot of companies have come up and dress expressed interest and involvement and i think if we get the right strategies we can indeed help accelerate the commercialization of these kinds of options for the, for africa. >> and maybe you can on another point give me the name of that company in california. >> sure. >> so a couple of other areas, another area of concern that gets raised a lot to what extent is power africa looking at renewables? as you know, that is always a controversial issue, whether power africa is just going to focus on fossil fuels. so to what extent, from anybody? then i have one final question after that. >> ranking member bass, thank you for those questions. just to respond to a couple of the ones that you've posed, first of all in relation to the reverse trade missions we'd be happy to go back and talk with our colleagues at the trade and development agency that are, that lead in the organization of them. our agency and others from across the u.s. government typically provide technical depth and some of the relationships with companies that can help to make the most effective but i will be happy to take away your interest in knowing what more do they have planned over the horizon. >> good. tell them to come to los angeles huh? >> beg your pardon? >> going to tell them to come to los angeles? i'm kidding. >> i'm told there is tda representative in los angeles that is working on an effort, called, making global local, to get reverse trade missions to cities across the united states. so some of that may in fact be happening and we'll provide more. >> tell me name of it again? >> making global local. >> okay. >> so indeed some of this may be happening. we'll get details back to you for the record. concerning the, the role of renewables in power africa, the first point, approach we as an administration are taking, very non-specific as to technologies. it is, there are going to be different answers that work in different contexts. >> agree. >> beyond the grid is all about figuring out where there is opportunities be it for rao renewable systems with storage, hybrid systems involve a mix of renewables and fossil fuel generating capacity for when there is not wind or sunlight. this is one of the things where one of the areas where the department of energy is able to make a specific contribution to power africa's capability by providing some of the expertise of our laboratories in these arenas. already ithink worth calling out but there are private sector partners beyond the grid initiative are pretty considerable. more than a billion dollars over coming five years. while we don't have today, specific, you know, long lists of things that have gotten done, we think this is very promising area for the growth of power africa and where for certain settings there will be a lot of he will vans. last comment, oh, by the way, it is not just the village setting in rural africa where off-grid and micro grid systems are relevant and that is equally true in remote settings in the united states, in alaska, for example, and even in very non-rural settings such as the micro grids, separatable grid systems, for example, we're looking at in places as, very, very highly urbanized parts of our country where in times of grid instability, which is another commonality with some of the african grid systems you can island off a particular part of the grid in order to protect critical load. hospitals, transport systems, et cetera. >> thank you. and then, i'm sorry, go ahead. >> obviously we know africa is blessed with renewable energy resources. u.s. is member of the international agency and what they have been doing is trying to develop more extensive maps of renewable resource potential throughout africa. this is clearly showing that in a sense there is a range of resources, whether it is geothermal in ethiopia, whether it is wind in kenya and of course hydro resources are still very important for the continent and in some cases for solar power in grid applications. i was struck at the african ministerial about how consistent the ministers were in stressing the important role that they saw renewables play in a diversified energy mix. i think in a place where many countries have moved. they moved to develop incentive frameworks of interconnection of renewable energy. in some cases clearly, they are looking at a, at a mix of both renewables and natural gas, to have a cleaner fuels system. i think that varies widely depending on whether you're talking about north or south or central. >> thank you. is it, elkind or el kind? >> it is elkind by i answer to anything including hey you. >> just don't call you late for dinner. you said in opening remarks you went to meeting with 500 participants. i was just coming in trying so get situated. where was that? >> thank you for the question. this was the u.s. africa energy ministerial which took place in early june in ethiopia. it was hosted by the government of ethiopia, co-chaired by the secretary of energy, dr. moniz, and the ethiopian minister of energy and water. >> okay. mr. postel, close enough? okay. you said that nigeria recently privatized five generation companies and 10 distribution companies, is that correct? >> correct. >> how long ago was that? >> over the course of the last actually months. >> over the course of the last 12 months. so they had, the government itself was run under generation and distribution facilities >> yes they had. >> what percentage does that equate in nigeria? you said five of 10, is that half of the facilities, a third? >> i can give you the precise answer but off the top of my head i believe it was at least half, if not a bit more. >> in 12 months have that been a viable function? are they functioning properly without little -- i run a business so it is impossible to do it without any problems. he is grinning like a boss some eating yellow jackets? what does that that mean? are they operating without problems? >> my colleague, dr. ichord has more recent information that el add. my understanding that each company is in a different situation in the sense it is some operating very well. some a few hiccups. but i would characterize them as growing pains but in general a lot of the operations went forward. >> by the way i do want to add for our ranking member, texas has its own grid. so you come to texas,5% of the state is covered by ercot. you're probably aware of that. if you want to learn how to get the grid in africa, come see us. next question, you're stuck on the possum eating yellowjackets, huh? mr. postellings, from your notebook, my notebook notes about you, you said you develop ad plan first international securitization of future receivables without a corporate guaranty. >> yes, sir. >> explain that. >> this was a financing for the government of jamaica in 1988. it was the first new funding that they had obtained from the private sector in 13 years because there had been reschedulings. every year they were basically receiving payment from at&t that telephone calls from the diaspora was making to jamaica and we felt that was predictable enough to give them money up front in essence. and so we raised money in japan and we did that financing and it was all repaid. >> can you do the same thing with electricification in africa? >> i have to think about that. i don't know. >> okay. that is what i thought it was. now you also, is it ichord? dr. ichord, i think you also said, in your remarks, governance and transparency were key security concerns. protection of the people and environment from sector impacts. should be, i think i was writing fast and furiously although that is a bad term now. i was writing quickly. what does that mean, sector impacts? >> well i think obviously as we know from our experience here, environmental impact of, offshore and off, upstream oil and gas is very important area to develop the capacity of these countries and that's really, it was, in that context maybe the sector impact is a little little too vague but that's what we were talking about. increasing the capacities in the environment, management area. >> that's what i was wondering. and then you also said something about eiga extractible? >> it is international initiative, extractive industries transparency initiative. >> okay. >> actually the u.s. is participating. we're a candidate. the interior department in the u.s. has the lead on it and it's basically to, you know, to enhance accountability in terms of this important sector and the revenues and -- >> that is going to be important you said also that that, and i don't remember if you said africa or particular country was at crossroads, i think it was africa, they had expansive renewable resources and emerging oil and gas market, i guess resources. quantify that for us percentagewise? 50, 50, 60/40? >> well i think that clearly there are a dozen or more countries where oil and gas is developing. some are more developed like angola and nigeria. others where exploration is just beginning and in the early stages. i think it is a little bit too early to say exactly what that mix will be. you have certainly have countries like tanzania and mozambique where you have in a sense world-scale gas resources that are being developed and that will then open up lots of opportunities for them to have a significant gas role in their economies. at the same time for the electric power sector the economics of many of these renewable energy resources look very attractive, especially compared to oil which many of the countries are still, you know, having to use oil to generate and have costs of, you know, 30 cents a kilowatt-hour for power like in ghana. which has to use oil because they're not able to get gas from nigeria in the pipeline. >> so i looked at a map of africa during a search for pipeline infrastructure and looks like most, what limited pipeline infrastructure they have is primarily in the north. i don't know if you're familiar with that map or not. >> you have the west africa pipeline. and that is -- >> runs from algeria to nigeria. >> right. >> okay. >> problem nigeria has severe gas shortage because of internal policies haven't given incentive for development of their gas resources. therefore countries like ghana and others on the pipeline route have not been able to get the gas supplies through that pipeline. >> is there a robust, pipeline industry and or association in africa that is pushing for the installation of pipelines and do we have property rights and how does that play if there is? >> thank you, congressman weber. there is, i think a natural, unavoidable tension that will have to play out here. frankly was one of the really core elements of our discussion in june at the ministerial meeting i just referred to in response to your question. and that is, as one sees development of the oil and gas resources, particularly in some frontier provinces, east africa, in particular, how much of that is for domestic consumption versus export? and, i mean. the international oil companies want to meet demand in the countries where they operate because that's then, you know, that has a multiplier effect that is very, very beneficial for many of those companies but they also need predictability in terms of off-take arrangements. to your yes, is there a robust, existing vision? i would say no. there is a great deal of interest and fairly elaborated and fairly ambitious ideas, goals, in terms of development of east african gas pipelines, for example, to take gas to power generation in south africa from, from mozambique as one, tanzania, as one big example. but the open issue which still has not yet played out is whether the, you know, the steps can be put in place, the right policies, the right laws, that give the investors enough predictability so that they will put down, you know, tens and tens of billions of dollars for really, you know, multideck kay investment programs. >> that brings me to well i have a question of ranking most favorable countries because clearly some countries will be better candidates than others on investing into infrastructure but before i go there, mr. el kind, you said you had performance on products in the marketplace making sure off grid systems actually perform. now, when you say an off-grid system, describe one of those to us. >> yes, sir. so a small household orville landing level system that might include a paired with storage capacity, battery systems, a fossil fuel, a, diesel or, or other fossil fuel generatings system to use when the, sun is not up, wind is not blowing. that through to highly efficient lamps, refrigeration for food and medicine, that kind of system. >> someone has a house out there with solar panels there will be have an effort to have regulatory rules in place they have to meet certain efficiency requirements? >> no, sir. the point here is that that, if, there are lots of examples one can see, for example, in solar lanterns, where there are products, sold into a number of marketplace, into a number of the african countries where the claims for the performance of the product simply don't match what the product actually does. you know, in our context we call that, false advertising. and so when the countries are saying, how do we think about the technical challenge of knowing what product actually does what it says, that's an area where we have experience in the united states and can help to make that experience available. again it's at their request and the point is not to allow fraudulent claims in the marketplace. >> well the last thing, and i don't mean to speak for you, apparently one of the things you could say the last thing you want to happen they're developing these markets and don't get burned with bad products. if they don't work, forget it and never mind. now is there any, i guess all three of y'all, this will be my last question that i alluded to earlier, a ranking of the most favorable countries. i have to believe, y'all have done a lot of on this, i haven't, but just at a glance there will be a lot of factors that are going to influence whether they're a good candidate. population, topography, gas, oil pipeline availability, education resources. do you have that work for us that you can come in there and train how to do this. as i mentioned earlier property owners, ownership. can you own property? is there a system in place to take over, you know to condemn property if you will for pipeline, or a right-of-way, whichever it is? the timing, is it right for the country? stability. is it stable system of government? those are seven things that i came up with. do you rank countries? which would be the best candidates for investment in their infrastructure? >> congressman, thank you for your question. sound like you were at some of these meetings where these kind of things were discussed by listing -- >> no, nsa was there. i just got the tapes. i'm sorry. >> we don't have a public listing per se. but in the first phase of power africa through a rigorous inneragency process discuss which would be the six focused countries. the factors you described are many things we would look at to assess who are the good partners. we would go through a similar process as we think about the expansion. one of the ones i will spend a moment on is the host country's commitment. as some of the other testimonial lewded to, if you're trying to have viable, electric utilities, if you're trying to solve some of the problems that are private sector investors have encountered in trying to do viable deals, you've got to have the commitment to do things differently and so that was a very, one of the many components but that was one of the most important components. to make sure we really had committed partners who would do this in partnership with us and the private sector. >> congressman, i can't give you a ranking but obviously i mentioned a number of the countries that we're working with on the oil and gas side that are different at different stages in their development. some are more gas-prone. some look like they have good oil potential like angola, et cetera. i think the companies are, you know, we have a range of companies and u.s. included that are working in these areas and and that they're assessing the risk and assessing the commercial viability of these resources. there is a lot of exploratory drilling that is planned in some these countries. so we'll have a, i think this is, over last couple of years there has been a lot of activity in this area. it will be a couple years before this shakes out in terms of where are biggest opportunities but clearly mozambique and tanzania in case of world scale gas resources ones people are looking at as well as export and looking at the potential for east africa and the whole, and including in south africa, the potential for that gas to have and develop the infrastructure. we recently had, there was recently a seminar that we had as part of the ministerial that looked at the east africa gas infrastructure opportunities. that was done by the colombia energy center. there is a report on that, i would be happy to send you on that issue. i think in terms of the issue of the investment climate, the question of the, weather countries are, weather investors are willing to come in without sovereign guaranties is a key factor. and in some countries i think, you know, investors are saying, in kenya, we can do that. we're willing to come in without a sovereign guaranty. in other countries you won't. you look are there in a sense partial risk guaranties and other mechanisms that the world bank or others can put in place that will in a sense mitigate some of the risk of the investment. >> thank you. those are my questions. i recognize mr. stockman. >> i thank you, for the panel to come out today on a friday. according to your testimony you've been in government for more than 40 years and you mentioned you were in bangladesh. is that a good 40 years or? my question, when i was over there in nigeria, there were mentioning some policies, and i'm wondering, you had standards. are there any standards which prevents interaction by the state department which is predicated on the government's social policies? or is it strictly benign interpretation of their capabilities? in other words when i was in nigeria they were trying to free the girls that were kidnapped and the u.s. military said we need permission from our government to give them and facilitate information and it was denied by the interpretation of the president leadership in nigeria. i was wondering do you have similar restrictions on governments such as uganda or nigeria because we don't get involved because of their social policies or is that a separate issue? >> as we look at the overall engagement in the countries we'll work close with the ambassador in the embassies, assessing the political situation, and severity of issues if there are social or human rights issues and make a decision on a case-by-case basis. i think it is hard to generalize, other than to sigh we're not just pursuing energy for energy sake. it is part of our broader foreign policy interest and that takes into account a lot of these -- >> could you get me, could you, maybe you know off the top of your head, is nigeria or uganda, are their, are their restrictions that you have restrictions that you have working with them in terms ever energy? >> i think right now we, we started in uganda early on in terms of the energy governance and capacity initiative and we've done a lot of work on geophysical side, on environmental, land use planning, et cetera. i think, the situation now, to best of my understanding that we have put on hold any further work in uganda. >> that is because of the social policies? >> i don't know. >> so, we've scaled back our activities. we're looking at whether we can proceed now. so, but i was asking -- >> was it social policies that you scaled back? >> i think it was a combination of things but i will have to get back to you. >> i appreciate that. i think that would be very helpful. i think actually congressman smith would be interested in that. so i think congressman weber. i think we all would be interest in that. i have to tell you on a personal level when i was in nigeria, i think it actually was, i think from, mr. postel's administration or department who advocated at that we not involve our military intelligence in helping nigeria because of some of the interpretations of the current government's positions, to me that was a little bit alarming because i now found out today that the chinese have given nigeria some of the equipment that they have been asking from the united states and, my fear is, because of our policies that we may be driving, as you know, the continent of, really being recolonized, not by the british, not by the americans but by the chinese. in republic of congo, drc, there is a whole mountain of copper, as you know, that was sold for pennies on a dollar. and the chinese have their workers there and there is no kind of inner play or development with the host country. it is very much, in fact i would argue, worse than what the colonial governments ever did. yet the chinese are continually expanding their breadth of involvement and my concern is that we're putting restrictions on ourselves to the degree, now we become less important to those host countries. as you go forward i would hope you see the chinese are a serious player and that they are, in terms of competing with the united states, could be a very problematic down the line. you're shaking your head yes. i hope you can tell me. >> thank you, congressman. i definitely would take note of your comments and i will investigate further in discussion with the head of our office there. i'm not familiar with all the circumstances of this. but certainly, fully recognized the point you're making about, very active presence of china africa. >> yeah. i just say i think sometimes we should do more pragmatic analysis. and not involve so much the, i mean we need to balance it i guess in order to compete with our chinese competitors. and, it is, almost every country, well there is chad or egypt, or subsahara africa, i keep seeing the chinese in a heavy, heavy way, and privately, i think it was republic of con grow, some administrators say they prefer americans but the hurdles, well, and for reasons in past history they have some of those countries, some of those countries have embezzled and taken a lot of money from their own people. so in some way it is justified. but my more concern is interpreting internal social policies are i think are beyond the scope of what i think the united states should be doing. i just want to express that. also i think, in terms of the oil development, in particularly in subsahara africa, there are countries, companies in my district, baker hughes, halliburton, halliburton is technically in abu dhabi or dubai, kind of moved, they would like to be in there but there is, as you know foreign corruption act and there can be some misinterpretation of that law being applied to our own companies. and to that extent i think there is a great deal of frustration on our side, in houston where we would like to see more cooperation and, i think, in deference to our own corporations if you could give them guidance and what they can do to facilitate more of involvement in those countries would be a great boon -- or texas is already booming. we have no program with fracking in our state but i'm still saying i think it would be ben firm to the -- beneficial in the united states and maintaining to keep our influence there. . . including cyber attacks which we know could be devastating to an electrical power generating grant or

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