[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]



                              JOINT HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS

                                AND THE

                         SUBCOMMITTEE ON ENERGY

                                 OF THE

                   COMMITTEE ON SCIENCE, SPACE, AND 
                        HOUSE OF REPRESENTATIVES


                             SECOND SESSION


                           SEPTEMBER 8, 2016


                           Serial No. 114-220

                     (Committee on Foreign Affairs)

                           Serial No. 114-90

             (Committee on Science, Space, and Technology)


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              Committee on Science, Space, and Technology

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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director

            Subcommittee on the Middle East and North Africa

                 ILEANA ROS-LEHTINEN, Florida, Chairman
STEVE CHABOT, Ohio                   THEODORE E. DEUTCH, Florida
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
DARRELL E. ISSA, California          BRIAN HIGGINS, New York
RANDY K. WEBER SR., Texas            DAVID CICILLINE, Rhode Island
RON DeSANTIS, Florida                ALAN GRAYSON, Florida
MARK MEADOWS, North Carolina         GRACE MENG, New York
TED S. YOHO, Florida                 LOIS FRANKEL, Florida
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
DAVID A. TROTT, Michigan

                   HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma             EDDIE BERNICE JOHNSON, Texas
    Wisconsin                        DANIEL LIPINSKI, Illinois
DANA ROHRABACHER, California         DONNA F. EDWARDS, Maryland
MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
MO BROOKS, Alabama                   ALAN GRAYSON, Florida
RANDY HULTGREN, Illinois             AMI BERA, California
BILL POSEY, Florida                  ELIZABETH H. ESTY, Connecticut
THOMAS MASSIE, Kentucky              MARC A. VEASEY, Texas
JIM BRIDENSTINE, Oklahoma            KATHERINE M. CLARK, Massachusetts
RANDY K. WEBER, Texas                DON S. BEYER, JR., Virginia
JOHN R. MOOLENAAR, Michigan          ED PERLMUTTER, Colorado
STEVE KNIGHT, California             PAUL TONKO, New York
BRIAN BABIN, Texas                   MARK TAKANO, California
BRUCE WESTERMAN, Arkansas            BILL FOSTER, Illinois
DARIN LaHOOD, Illinois

                         Subcommittee on Energy

                   HON. RANDY K. WEBER, Texas, Chair
DANA ROHRABACHER, California         ALAN GRAYSON, Florida
RANDY NEUGEBAUER, Texas              ERIC SWALWELL, California
MO BROOKS, Alabama                   MARC A. VEASEY, Texas
RANDY HULTGREN, Illinois             DANIEL LIPINSKI, Illinois
THOMAS MASSIE, Kentucky              KATHERINE M. CLARK, Massachusetts
STEPHAN KNIGHT, California           ED PERLMUTTER, Colorado
                            C O N T E N T S



Mr. Amos J. Hochstein, Special Envoy and Coordinator for 
  International Energy Affairs, Bureau of Energy Resources, U.S. 
  Department of State............................................    10
The Honorable Jonathan Elkind, Assistant Secretary for 
  International Affairs, U.S. Department of Energy...............    17


Mr. Amos J. Hochstein: Prepared statement........................    13
The Honorable Jonathan Elkind: Prepared statement................    19


Hearing notice...................................................    44
Hearing minutes..................................................    45

                        U.S. REGIONAL PRIORITIES


                      THURSDAY, SEPTEMBER 8, 2016

                     House of Representatives,    

           Subcommittee on the Middle East and North Africa,

                    Committee on Foreign Affairs and

                        Subcommittee on Energy,

              Committee on Science, Space, and Technology

                            Washington, DC.

    The subcommittees met, pursuant to notice, at 2:29 p.m., in 
room 2172, Rayburn House Office Building, Hon. Ileana Ros-
Lehtinen (chairman of the Subcommittee on the Middle East and 
North Africa) presiding.
    Ms. Ros-Lehtinen. The subcommittees will come to order.
    After recognizing myself, Chairman Weber, Ranking Member 
Deutch, and Ranking Member Grayson for 5 minutes each for our 
opening statements, I will then recognize other members seeking 
recognition for 1 minute.
    We will then hear from our witnesses. And, without 
objection, the witnesses' prepared statements will be made a 
part of the record, and members may have 5 days to insert 
statements for the record, subject to the length limitations in 
the rules.
    We are also expected to be joined by the chairman of the 
Committee on Science, Space, and Technology, Chairman Smith, 
and possibly Ranking Member--oh, here he is, right on time--and 
possibly Ranking Member Johnson as well. Let me look over here. 
No. So I will be pleased to recognize them as they arrive.
    The chair now recognizes herself for 5 minutes.
    Three months ago, I led a bipartisan congressional 
delegation trip to Cyprus and Israel. I was joined by Carolyn 
Maloney, Gus Bilirakis, and my friend and colleague from our 
Middle East and North Africa Subcommittee, Randy Weber, who is 
participating today as chair of the Science, Space, and 
Technology Subcommittee on Energy. Energy was the focal point 
of our trip, and one of the major talking points we heard in 
both Israel and Cyprus was that the natural gas developments in 
the Eastern Mediterranean has the potential to be more than 
just an economic boost for both countries; natural gas 
development has the potential to drastically change the 
geopolitical landscape of the region for the better.
    While in Israel, Prime Minister Netanyahu and other Israeli 
Government officials told us that the democratic Jewish state 
was on the verge of reestablishing relations with Turkey, and, 
indeed, just a few short weeks after our trip, Israel and 
Turkey announced relations had been restored. No doubt the 
potential to collaborate on natural gas developments played a 
central role in those discussions.
    Since the discovery of natural gas in the Eastern 
Mediterranean, Israel's relationships with Greece and Cyprus 
have improved. While in Cyprus, we were told that the Cypriots 
are working to bring the countries of the Eastern Mediterranean 
area together to create a multilateral forum that would include 
Israel. We were told by Cypriot officials that they consider 
themselves part of Israel's strategic depth and plan on working 
closely with Israel on issues of counterterrorism, security, 
crime, and trafficking. It was clear that energy has emerged as 
a key incentive that can help resolve the Cyprus problem and 
end Turkey's occupation of the northern part of Cyprus. A 
potential pipeline carrying Cypriot and Israeli natural gas to 
and through Turkey could not only improve relations in the 
region, it could be then routed into Europe. That would help 
our European friends in reducing their dependence on Russian 
energy and decrease Russian influence in that area.
    We have yet to see the tangible contributions from Ankara 
regarding Cyprus reunification, an issue that is of utmost 
concern to this committee. With cheap Israeli natural gas, we 
can see Israel strengthening its relationship with Jordan and 
Egypt and reshaping the traditional alliances in the region, as 
both nations could benefit from alternative energy sources. So 
the United States has a vested interest in seeing these 
projects in the Eastern Mediterranean come to fruition in order 
to bolster our partners in the region but to also bolster our 
own national security interests.
    Of course, the potential economic benefits realized by 
Eastern European nations should all these natural gas projects 
be developed would be immense. And it won't be just an economic 
benefit to the Eastern European nations. It was the U.S.-based 
company Noble Energy that made these potentially game-changing 
natural gas discoveries offshore both Israel and Cyprus. Exxon 
has also participated in Cyprus' latest round of licensing.
    As the projects expand and come online, that will create 
more jobs and bring in more revenue. But there are, of course, 
still various important impediments in the way. It would 
clearly be in Jordan and Egypt's benefit to work with Israel so 
they can decrease their energy subsidies that heavily burden 
their economy in lieu of a cheaper alternative, but will they 
allow other political considerations to derail stronger 
cooperation with Israel? Are energy incentives sufficient to 
end Turkey's occupation of Cyprus, or will this opportunity 
pass and limit the extent of energy cooperation in the region? 
Is Israel ready to be a regional leader, and can it resolve its 
domestic issues favorably to allow these projects to go 
    The United States can play a pivotal role in resolving some 
of these issues. We want to hear what positive steps the 
administration is taking to encourage these projects to go 
forward and how, if at all, we are providing support to Israel, 
to Cyprus, Turkey, Egypt, and Noble Energy even, to get these 
ambitious projects online and benefiting the region. We want to 
know how these issues factor in the administration's foreign 
policy when it comes to these nations and the region, because 
the Eastern Mediterranean natural gas discoveries can 
drastically reshape the region and benefit so many of our 
    And, with that, I recognize Ranking Member Deutch for 5 
minutes. And I will then recognize the other members and 
ranking members. And I know that Ranking Member Bernice 
Johnson, Chairman Smith, and many others will be speaking as 
    Mr. Deutch.
    Mr. Deutch. Thank you. Thanks, Madam Chairman, for holding 
today's hearing. Thanks to Chairman Weber and Ranking Member 
Grayson. And thank you to the witnesses for being here and for 
the good work that you and your agencies do.
    Energy security is an integral part of stability in a 
volatile part of the world. Recent gas finds in the Eastern 
Mediterranean present opportunities for new relationships and 
unprecedented cooperation between regional actors.
    I co-chair the Congressional Hellenic-Israel Alliance with 
my friend Congressman Gus Bilirakis, whom I saw walk in just a 
moment ago, who joined Chairmen Ros-Lehtinen and Weber on their 
recent delegation to Israel and Cyprus. Much of the work that 
we do in the caucus is focused on energy cooperation, and we 
have seen the way that these gas finds have really brought 
these three countries together and deepened their relationship 
in a really meaningful way.
    These are countries that have so much in common, including 
a respect for and commitment to democracy, and now have an 
opportunity to work together to create energy independence for 
their own countries, to help their neighbors meet their rising 
demands, and to eventually bring this gas to new markets.
    The trilateral meeting earlier this year between Israel, 
Cyprus, and Greece resulted in the establishment of a 
commission to explore possibilities for a pipeline to Europe. 
Getting this gas to Europe will go a long way toward decreasing 
Europe's energy dependence on Russia. And, from a national 
security perspective, helping Europe diversify from pro-Western 
sources can help contribute to increased international 
stability. Cyprus' discovery of the Aphrodite field in 2011 was 
the catalyst for the serious discussion of a pipeline 
connecting the Eastern Mediterranean gas fields. Unfortunately, 
the stalled reunification talks have hampered that planning 
process. I know that both sides are hopeful that talks can 
conclude before the end of the year, giving way to a new era of 
cooperation. Many have speculated on the role that energy 
played in the recent rapprochement between Turkey and Israel, 
and I hope that Special Envoy Hochstein will speak to how this 
development impacts Cyprus, as well, and how the current 
instability in Turkey affects prospects for regional 
cooperation on a pipeline.
    For Israel, the discovery of the Tamar and Leviathan fields 
are a game-changer. Since the Tamar field went online, natural 
gas now accounts for 30 percent of Israeli fuel consumption, up 
from 11 percent in just 2008. Production from the Leviathan 
field has the potential to more than meet all of Israel's 
natural gas needs, leading it to be an exporter in the future. 
Israel also appears to finally be on the road to overcoming the 
regulatory challenges that have stymied progress over the past 
several years. Her neighbors have recognized this potential for 
a stable gas source. Memoranda of understanding have been 
negotiated with Egypt, Jordan, and the Palestinian Authority 
for various gas deals.
    Following the uprisings in Egypt in 2011, Jordan faced 
serious disruptions to its gas supply as terrorists in the 
Sinai repeatedly attacked the Arab Gas pipeline from Egypt. A 
pipeline from Israel to Jordan has been approved to facilitate 
a $15 billion agreement between U.S.-based Noble Energy, the 
developer of Israel's fields, and Jordan's national electric 
power company. Noble Energy also spearheaded a 2014 deal to 
bring gas to the West Bank. And just this week, Israel 
announced a partnership with the Dutch to help supply gas to 
Gaza. Cooperation that brings about benefits to the people, 
real benefits that impact their daily lives, like alleviating 
water and gas shortages, can go a long way to reducing tension 
on the ground. Noble has also signed an agreement with an 
Egyptian firm for an undersea pipeline.
    Now, it is no secret that relations between Israel and its 
friendly neighbors should be strengthened. I hope that the 
Governments of Jordan and Egypt continue to withstand domestic 
pressure to cancel these deals. Both of these countries are in 
desperate need of new energy sources, and these deals can 
provide much-needed relief.
    Egypt, once a net exporter, has two LNG facilities that 
have not operated at capacity for several years, and the rise 
in domestic demand decimated Egypt's ability to export. If 
these facilities are able to be secured, they would be ideal 
for use by Cyprus. Egypt's surprising discovery of the Zohr 
field, the largest find in the Eastern Mediterranean, adds a 
new dimension to the regional aspect. Egypt is hopeful that gas 
from Zohr can reach domestic markets by 2017, and, depending on 
demand, the ability to export in the future could provide a 
much-needed boon to Egypt's economy.
    Mr. Hochstein, I hope that we can discuss in greater detail 
how the Zohr discovery fits into planning for the future of 
Eastern Mediterranean gas.
    And with all the activity in the Eastern Mediterranean, 
there is a real opportunity here for the U.S. to use our 
expertise to provide technical and political support to these 
countries as they move forward.
    And, finally, Madam Chairman, you and I partnered to 
introduce and pass the U.S.-Israel Strategic Partnership Act in 
2014. I know we are both proud of this legislation that 
showcased the depth and breadth of the U.S.-Israel 
    And one area that this bill made remarkable advances in was 
energy. In addition to authorizing a dialogue and a number of 
new energy initiatives and expanding grant programs, the bill 
authorized the establishment of a joint U.S.-Israel energy 
center in the United States that would leverage the experience, 
knowledge, and expertise of all that we have here in the United 
States and in Israel and move toward the development of 
domestic resources to address needs. And I want to stress that 
this showcases just how much there is for our two countries to 
do together and the substantial impact this kind of research 
can have around the world. And it is the kind of thing that 
doesn't get enough attention. And there is a lot more I haven't 
touched upon that I hope we have a chance to get into and hear 
from the witnesses, especially how U.S. energy imports are 
impacting these developments around the world and Iran's 
reentry into the energy market.
    I thank our witnesses and you and look forward to a 
fruitful discussion.
    Ms. Ros-Lehtinen. Thank you very much, Mr. Deutch.
    And we are so thrilled that the full committee Science 
Chairman and Ranking Member, Smith and Johnson, have joined us 
    And Lamar is the only one who knows that my childhood 
nickname is Lily, so he is a good friend.
    The chairman is recognized.
    Mr. Smith. I thank the chairwoman for working with the 
Science Committee to host today's hearing. Our shared 
jurisdiction over international energy issues is an important 
piece of U.S. foreign policy. I look forward to our discussion 
on the appropriate roles of the Department of Energy and 
Department of State.
    Today, the Subcommittee on Energy and the Subcommittee on 
the Middle East and North Africa will examine the opportunities 
for energy development in the Eastern Mediterranean. We also 
will discuss how cooperative research and development with our 
allies can bolster U.S. diplomacy and provide opportunities for 
new scientific discoveries.
    While the State Department's responsibility to execute U.S. 
foreign policy is well-known, the Department of Energy's Office 
of International Affairs also plays an important role in 
foreign policy. DOE describes the purpose of its International 
Affairs Program as integrating the Department's research 
programs, national labs, and science and technology policy to 
pursue U.S. Government objectives on energy and national 
security issues. The Department also provides subject matter 
expertise and vital information on the impact energy 
development can have on global stability and security, which is 
of interest to our national security agencies.
    DOE currently engages on energy issues with dozens of 
countries. Its agreements include bilateral R&D partnerships 
and multilateral efforts on regional energy issues that range 
from energy efficiency and oil and gas exploration to providing 
electricity to rural communities around the world. By working 
to ensure energy security for our allies, the U.S. can engage 
in diplomacy that improves regional stability and increases 
    In the Eastern Mediterranean, energy issues have a 
significant impact on regional security. The United States has 
a long history of engagement in the region, particularly in 
support of one of our closest allies, Israel. On energy issues, 
DOE has led cooperative research efforts with Israeli 
scientists for decades, with formal agreements on energy 
research dating back almost 30 years.
    Programs such as the Binational Industrial Research and 
Development Foundation and the Israel-U.S. Binational Science 
Foundation encourage collaboration between the nations' top 
labs and scientists. These programs research a broad range of 
topics that include oil and gas exploration, production, and 
distribution technologies, energy efficiency and renewable 
energy, and water desalination and treatment facilities.
    The U.S.-Israel Energy Dialogue, reestablished by DOE in 
2011, fosters scientific engagement on cybersecurity, civil 
nuclear energy, and basic research and development activities. 
These programs leverage DOE national labs and researchers to 
produce the kind of scientific collaboration that can lead to 
the next technology breakthrough.
    The recent discovery of the Tamar and Leviathan gas fields 
off the coast of Israel have the potential to foster new 
regional trade relationships. It could even provide a source of 
natural gas for U.S. allies in Europe. DOE-led cooperative R&D 
for natural gas production, transmission, and distribution can 
help drive this development. It can create the potential for 
Israel to become a net exporting country, establish energy 
trade with its neighbors, and ensure Israeli energy security 
for years to come.
    I thank our witnesses, Assistant Secretary Elkind and 
Special Envoy Hochstein, for testifying today. We look forward 
to their comments about the role DOE plays in support of U.S. 
diplomacy and opportunities for energy engagement with allies 
in the Eastern Mediterranean.
    Thank you, Madam Chair, for that recognition. I yield back.
    Ms. Ros-Lehtinen. Thank you so much, Chairman Smith.
    And now we would like to turn to Ranking Member Eddie 
Bernice Johnson, who is recognized.
    Ms. Johnson. Thank you very much, Madam Chairman.
    And good afternoon to all.
    I am so appreciative of you holding this joint hearing on 
energy opportunities in the Middle East and, in particular, on 
the research and development partnerships in the region.
    DOE's international partnerships span the globe, and they 
are an important tool in expanding clean energy innovation and 
addressing climate change. One of the strongest partnerships we 
have is with Israel. Our Nation and the state of Israel have a 
long history of cooperation in developing clean energy 
technologies and in promoting and ensuring energy security for 
Israel in particular. This relationship is not only in each of 
our national interests but vital for our shared commitment to 
the region as well.
    The U.S. supports a number of successful initiatives to 
promote this collaboration. The DOE's Office of Energy 
Efficiency and Renewable Energy has issued awards for research 
in wind, solar, energy storage, and many others. These funds 
are matched by the Israeli Government and the awardee, allowing 
for greater leverage on every dollar DOE invests.
    In addition to DOE's work with Israel, the Department has 
also collaborated with industries in Turkey to employ better 
energy-efficiency practices and technologies. These 
partnerships strengthen our country's own R&D efforts and make 
a positive impact on our diplomatic work in the region. If we 
wish to continue to promote scientific advancement in energy 
security, great collaboration in research and development must 
continue to be a high priority.
    I look forward to hearing from our distinguished panel on 
the progress we have made in this area and on the opportunities 
we should turn to next.
    I thank you and yield back.
    Ms. Ros-Lehtinen. Thank you so much, Ranking Member 
    And now I would like to turn to Chairman Weber, who is the 
chairman of the Subcommittee on Energy.
    Mr. Weber. Thank you, Madam Chair.
    Good afternoon, and welcome to today's joint subcommittee 
hearing examining energy opportunities in the Eastern 
Mediterranean. I want to thank my colleagues on the Committee 
on Foreign Affairs for working with the Science Committee to 
hold this very important hearing.
    Today, we will have an opportunity to receive an update on 
U.S. diplomacy and regional energy development and will conduct 
important oversight of the Department of Energy's ongoing 
cooperative research and development programs with our allies 
in the region. We will specifically hear about DOE's energy 
engagement with Israel, the key U.S. ally in the region.
    The Department of Energy plays a vital role in ensuring 
global energy security. By engaging with our allies through 
energy, environment, and technology cooperation, DOE provides 
opportunity for international researchers to access the 
scientists and the research infrastructure at our national 
labs. It also gives U.S. researchers the chance to work with 
new partners on innovative research and opens the door for 
future discoveries and technology breakthroughs. This kind of 
collaboration provides opportunity for international dialogue 
and directly supports U.S. diplomatic efforts around the world.
    In the Eastern Mediterranean, our strongest ally is Israel. 
So it should be no surprise that DOE has a long history of 
cooperation with Israel, or what I call the start-up nation, on 
energy research and technology development. Starting with a 
research partnership that was formalized in 1987, the 
Department has consistently prioritized this strategic 
    Energy security is a key priority for Israel, and not just 
for Israel. It directly contributes to regional stability. By 
enabling Israeli development of their natural resources, 
including the sizable Tamar, Dalit, and Leviathan offshore 
natural gas deposits, the United States can promote economic 
growth and help establish trade relationships between Israel 
and its neighbors, which will mean stability in the Middle 
East. Noble Energy, a U.S. company based in Houston, Texas, 
helped discover these gas fields. And today, the ongoing 
research partnership between DOE and Israeli scientists will 
provide technical expertise and the technologies to help 
successfully develop and export this resource. With regional 
partnerships to develop pipeline infrastructure, Israel's 
natural gas resources could even fuel Europe, serving as an 
alternative to Russian natural gas and providing energy 
security even to more U.S. allies.
    Now, look, DOE is engaging with Israel on renewable energy, 
cybersecurity, desalination--I can do this, I can do this, 
Madam Chair, I know, I know--and energy storage technology--my 
``tang is getting tongled''--cybersecurity, and efforts to 
protect our critical infrastructure. Maintaining this dialogue 
in cooperation with our key ally should remain a U.S. priority.
    In the past year, we have even seen DOE take a leading role 
in negotiating U.S. international agreements. In the case of 
the Iran nuclear deal and the Paris climate agreement, my 
colleagues and I have raised very serious concerns. So I am 
pleased to discuss DOE engagement, where we see clear benefits 
from the U.S. and our allies and the potential for real 
breakthroughs in energy technology.
    I want to thank Assistant Secretary Elkind and Special 
Envoy Hochstein--am I saying that right? Good enough? Okay--for 
testifying to the committees today. Your testimony will provide 
a valuable update to Congress on the impact of energy on 
regional stability and how your respective departments can best 
engage to support our allies and advance U.S. goals.
    By supporting cooperative research and development with our 
allies, the Department of Energy can contribute to U.S. 
diplomacy, the security of those allies, and promote 
groundbreaking energy research, all the while helping to ensure 
a more stable region in the world. I look forward to you two 
gentlemen laying out the framework to do just that.
    I yield back.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Weber.
    And now I am pleased to yield to my Florida colleague, 
Ranking Member Grayson, for his statement.
    Mr. Grayson. Thank you.
    I actually don't have anything to add to my colleagues and 
what they have said already, but there is something I want to 
emphasize, and that is the importance of this development to 
peace in the Middle East. The opportunity for peace is based 
upon a very fragile concept called personal safety and 
security. There is no peace unless people feel that they are 
not in danger. And that is a requisite on all sides--on both 
sides, and on all sides.
    Israel has felt for decades now that there is a noose 
around its neck regarding its energy supplies. And these are 
fragile. In the modern world, energy supplies are corporatized 
and centralized from the well to the pump and everywhere in 
between. And the result of that is that there is a 
vulnerability intrinsic to the energy supply system that is not 
necessarily the case with regard to the supply of food or the 
supply of shelter or other basic necessities.
    It is, actually, similar to the bottleneck that we see with 
the Internet. Last night, I saw the movie ``Snowden.'' In the 
movie ``Snowden,'' they illustrate this point by pointing out 
that the entire Internet service in Syria was shut down 
inadvertently by a cyber attack--inadvertently.
    And the same thing can be true with energy supplies. Energy 
supplies are centralized in a manner that makes them uniquely 
vulnerable. And as long as Israel, as long as other countries 
in the region feel that they are vulnerable in that regard, it 
is difficult for people to even grasp the concept of peace.
    We lived through similar circumstances decades ago in the 
United States. I can well remember how the shutdown of oil 
supplies and oil imports to the United States led to my parents 
getting up at 5 o'clock in the morning, along with many, many 
other Americans, in order to get their gas in the morning and 
waiting online for hours in order to make that happen. I can 
also remember how the quadrupling of oil prices, worldwide oil 
prices, led to the deepest postwar recession that we had until 
the year 2008. In the same way, countries like Israel, other 
countries in the region feel vulnerable to similar attacks on 
their economy, on their safety, on their way of life. And as 
long as that is true, then it's unreasonable to expect anything 
resembling peace.
    So what we have here, through the discovery of natural gas 
supplies that are fortuitously spread around the Eastern 
Mediterranean in areas that Israel can possibly exploit, Egypt 
already is exploiting, Lebanon might be able to exploit, Cyprus 
is already exploiting, that creates a common interest in peace 
and security and a sense of safety that is absolutely necessary 
if we are going to see a peaceful Middle East at any point in 
    I yield back.
    Ms. Ros-Lehtinen. Thank you very much, Ranking Member 
    I would be glad to recognize any members for opening 
statements they would like to make for a minute.
    Mr. Bilirakis is recognized.
    Mr. Bilirakis. Thank you so much, Madam Chair. And thank 
you for allowing me to sit in on this very important 
subcommittee. Thanks for holding it as well.
    I also want to thank Chairman Weber and Ranking Member 
Deutch and Ranking Member Grayson and members of the 
subcommittee, again, for inviting me to participate in the 
joint subcommittee hearing concerning the increasingly 
important energy priorities in the Middle East and the Eastern 
Mediterranean regions.
    When I co-founded the Congressional Hellenic-Israel 
Alliance Caucus, along with my friend Representative Deutch, 
one of our primary goals was to promote the growing partnership 
between Israel, Greece, and Cyprus--a partnership which could 
yield important economic and national security benefits for the 
United States and the region.
    Energy diplomacy has been at the core of that partnership. 
Noble Energy's 2010 discovery provided a great surge in 
optimism that natural gas cooperation would provide energy 
security, economic growth, and global stability in a 
notoriously unstable region. Exclusive economic zones were 
established quickly and with minimal friction. Energy 
cooperation resulted in security cooperation, greater Israeli 
tourism to Greece and Cyprus, and projects like the Euro-Asia 
    If this cooperation continues and expands to include other 
regional actors, natural gas could bring the region together 
the way coal and steel brought Europe together after World War 
II. The energy potential of this region furthers the U.S. 
interests by making allies and strategic partners energy 
independent, by helping Greece and Cyprus out of their economic 
crisis, by stabilizing Egypt and Jordan, and by incentivizing 
Turkey to avoid destabilizing behavior in the region. That is 
why we need to focus today on how the U.S. is both furthering 
cooperation in the region and working to overcome obstacles.
    Turkey's ability and willingness to play a positive role in 
a stable Eastern Mediterranean must be determined. Without a 
decisive and tangible move toward ending its occupation of 
Cyprus, Turkey--one of the greatest beneficiaries of an Eastern 
Mediterranean energy region--remains one of the greatest 
obstacles to this promising future.
    I want to thank the Subcommittee on the Middle East and 
Northern deg. Africa and the Subcommittee on Energy 
for highlighting this important issue for the stability and 
security of the Middle East.
    And I yield back. Thank you very much.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Bilirakis.
    Seeing no other requests for time, I am so pleased to 
welcome our panelists.
    We are delighted to welcome back Mr. Amos Hochstein, who 
serves as Special Envoy and Coordinator for International 
Energy Affairs for the Bureau of Energy Resources at the 
Department of State. Prior to this role, Mr. Hochstein served 
as Deputy Assistant Secretary for Energy Diplomacy and even a 
former staffer of the House Foreign Affairs Committee.
    You survived that; you can go to a lot of places. So 
welcome back, Amos.
    Next, we would like to welcome to our subcommittee for the 
first time, but hopefully not the last time, the Honorable 
Jonathan Elkind. Mr. Elkind is the Assistant Secretary for 
International Affairs with the Department of Energy. Prior to 
that role, Mr. Elkind served as the Principal Deputy Assistant 
Secretary. And prior to joining the State Department, he was a 
senior fellow at the Brookings Institution.
    Welcome, Assistant Secretary Elkind.
    As I said, your remarks will be made a part of the record. 
Please feel free to summarize.
    And we will begin with you, Mr. Hochstein.


    Mr. Hochstein. Thank you, Madam Chair. It is good to be 
back where it all started for me 20 years ago. So I appreciate 
    Madam Chair, Ranking Members, Chairman, I appreciate the 
opportunity to be here today to discuss energy developments and 
opportunities in the Eastern Mediterranean.
    But let me start here at home to frame it. The United 
States has transformed into the world's energy superpower. That 
is true in oil, gas, wind and solar, efficiency, and R&D.
    We have increased oil production from 5\1/2\ million 
barrels a day to nearly 9 million barrels a day and 
transitioned from being a significant and increasing importer 
of natural gas to an important exporter. By the end of the 
decade, the United States may match Qatar in export volumes of 
    We have seen investments in U.S. renewables rise to $58 
billion in 2015 alone and increased solar generation more than 
twentyfold in the last 8 years. Any way you use the word 
``energy,'' the United States is the leader, and the world is 
looking to us for leadership.
    This is a time of turbulence for global energy markets, due 
in part to the transformation taking place in the United 
States. As you know, oil costs less than half what it did 2 
years ago, and prices for gas in Europe and Asia are at 
historic lows. Energy is also again playing an increasing role 
in geopolitics.
    But today we are here to discuss the Eastern Mediterranean. 
Discoveries offshore Cyprus, Israel, Egypt, and potentially 
Lebanon have already redefined regional relationships and, I 
believe, will continue to be a catalyst for increased economic 
and political cooperation through interconnection and 
    For example, many credit regional energy development for 
the deepening of the relationship between Israel and Cyprus and 
Greece. The successful exploration, production, and export of 
natural gas resources in the Eastern Med will require exactly 
the political cooperation and economic integration that the 
United States has long supported in the region. This remains a 
top foreign policy priority for the United States, which is why 
I have spent a significant amount of my time devoted to these 
opportunities and why engagement by Vice President Biden and 
Secretary Kerry on these issues has been so robust.
    Let me start by describing the current landscape in the 
Eastern Med. In January 2009, Noble Energy discovered the Tamar 
gas field offshore Israel, containing approximately 7 TCF of 
gas. The next year, they discovered the Leviathan field, with 
approximately 18 TCF of gas. The Israel discovery spurred 
exploration in nearby Cyprus, where Noble discovered Aphrodite 
in 2011, with an estimated 4\1/2\ to 5 TCF of gas. That 
increased interest in the region, coupled with positive 
developments in Egypt's investment climate, led to additional 
exploration in Egypt, yielding Italian firm Eni's Zohr field 
discovery, mentioned earlier, with approximately 30 TCF, making 
it the largest discovery to date in the Mediterranean.
    Eni's discovery of the Zohr field, which lies just south of 
Cyprus' EEZ, sparked renewed interest in exploration offshore 
Cyprus, which had been waning after the Aphrodite find because 
a number of exploration wells did not produce significant 
discoveries. Cyprus just concluded an extraordinarily 
successful third bid round, with bids from companies including 
ExxonMobil, Qatargas, and others. This cycle of exploration and 
development in the region will continue as long as discoveries 
continue to be made, expanding potentially to places like 
Lebanon and Greece.
    I believe the Eastern Med remains an underexplored and 
underdeveloped area, and I fully expect that significant 
discoveries will continue to be made there. However, the market 
is still looking for validation that historical political 
differences will not get in the way of investment and 
    One of the early lessons learned in the development of 
Eastern Med resources is the critical importance of regulatory 
certainty, a business climate that is conducive to investment, 
contract sanctity, and close cooperation between the government 
and the private sector. The lack of regulatory clarity and 
stability cost Israel years in development of its largest 
offshore resource. But despite early challenges, I am now 
optimistic and confident in the long-term stability of energy 
development in the region.
    Let me be clear: Energy will not solve political 
differences in the region, but it can and, in fact, already has 
provided incentives to accelerate political accommodation and 
encourage compromise.
    The future I see for the region includes new and old 
pipelines connecting Israel's offshore resources to Jordan, 
Egypt, Turkey, and the Palestinian Authority. It includes 
Cypriot gas exports to Turkey and/or Egypt, allowing Egypt to 
satisfy its own power needs and export via existing but now 
idle LNG terminals. New resources will allow Turkey to 
diversify its heavy dependence on a small number of suppliers 
and use its extensive pipeline network to reach Europe as well.
    The success of all these plans, however, hinges on 
cooperation. Countries will save billions if they share 
infrastructure and market access. If they don't share these 
resources, most of the gas will have to stay in the ground. The 
importance of these developments is not isolated to the Eastern 
Mediterranean but it is part of a broader energy security 
puzzle, connecting dots from Jerusalem to Nicosia, Athens to 
Baku, from Baghdad and Irbil to Sophia and Belgrade and Kiev.
    The Eastern Mediterranean can play a role in freeing 
Central and Southeast Europe from their overwhelming dependence 
on Russian gas. Turkey has the potential to transform from a 
country with a heavy reliance on Russian energy to a critical 
hub connecting Europe, Asia, and the Middle East. This is an 
exciting opportunity to enhance prosperity, economic security, 
stability, and political security.
    That is why we have made this a top priority for the United 
States. I don't believe that this vision of increased national 
security through energy security is wishful thinking. We are 
seeing it become a reality today.
    I thank you, and I look forward to your questions, Madam 
Chair. Thank you again for inviting me to testify.
    [The prepared statement of Mr. Hochstein follows:]

    Ms. Ros-Lehtinen. Thank you very much. Welcome back.
    Mr. Elkind?


    Mr. Elkind. Thank you, Madam Chair, Chairman Weber, Ranking 
Member Deutch, Ranking Member Grayson, distinguished members of 
both subcommittees. I appreciate the opportunity to appear 
before you today.
    My name is Jonathan Elkind, and, as has been stated, I am 
the Assistant Secretary for International Affairs at the U.S. 
Department of Energy. My office advances U.S. objectives in 
international energy security, national security, and clean 
energy deployment by applying DOE's knowledge of energy 
technologies, markets, and policies.
    Let me provide some context at the outset in regard to 
natural gas in particular. This is a time of dramatic change, 
as just has been noted, in global energy markets, and these 
changes will be felt in the Eastern Mediterranean as well. 
Decades of investment, both by the U.S. Government and private 
industry, have produced a cascade of scientific and 
technological advances which allowed us to unlock 
unconventional gas and oil resources.
    Pipeline systems have historically dominated natural gas 
trade around the globe. However, new facilities to liquefy 
natural gas, chiefly in the United States and Australia, are 
rapidly changing this reality. In fact, the U.S. Energy 
Information Administration, or EIA, projects that global LNG 
trade will exceed pipeline natural gas trade by 2020.
    Together with an increasing reliance on shorter-term 
contracts, natural gas markets are now characterized by greater 
liquidity and competition, features simply not seen in the 
past. The implications for the United States and for trading 
partners and allies, such as Israel, are enormous: Greater 
availability of clean-burning fuel, more security of supply, 
greater ability to diversify one's purchasing.
    In the Eastern Mediterranean region, one sees significant 
new upstream prospects and competing proposals to monetize 
those gas reserves by building pipeline and LNG infrastructure, 
as my colleague Amos Hochstein has just sketched out.
    Bearing in mind Israel's current consumption of around 300 
billion cubic feet per year, Israel has sufficient gas supply 
for 25 years while also allowing for exports. Companies working 
offshore from Cyprus and Egypt, as has been noted, have also 
made major gas discoveries.
    When it comes to moving this gas to markets, a great deal 
of attention has focused on regional pipelines, and some of 
these projects have been called out already. There have also 
been discussions not only about exports to Cyprus and to Greece 
but then also to Turkey as well. One must remember, however, 
that the development of multibillion-dollar natural gas 
production and transportation systems requires transparent and 
predictable legal and regulatory structures. The terms, in 
short, must simultaneously attract investors and advance the 
interests of the host countries.
    Let me now turn briefly from the global and Eastern Med 
natural gas issues to DOE's work with Israel on energy and 
science issues. Our collaborations involve frequent Cabinet-
level engagement between the Secretary of Energy and Israeli 
counterparts, as well as engagements among senior officials, 
researchers, and experts through our annual U.S.-Israel Energy 
    Here are some highlights of this effort.
    One is collaboration on the energy-water nexus. Israel and 
the United States both face the challenge of providing new 
water resources and new energy production. So DOE and Israel's 
Ministry of National Infrastructure, Energy, and Water 
Resources recently announced the U.S.-Israel Desalination 
Design Challenge, a competition that encourages leading 
engineers and researchers in the U.S. and Israel to design 
integrated energy and desal systems.
    DOE and the Israeli Ministry also recently announced a 
U.S.-Israel postdoctoral exchange program, which will enhance 
scientist-to-scientist cooperation between DOE-funded research 
programs and Israeli scientists in energy-related topics of 
    Comments have already been made by several of the ranking 
members and chairs about the BIRD, the Binational Industrial 
Research and Development, Foundation and its energy component 
in particular. BIRD Energy has approved 32 projects, with a 
total of $21.6 million combined from the U.S. and Israeli 
Governments and matching dollars on a greater-than-one-to-one 
match from the private sector.
    Energy cybersecurity is a top concern for both of our 
countries and was a featured topic in the October 2015 U.S.-
Israel Energy Dialogue and was also a point of great focus when 
Secretary Moniz visited Israel earlier in the current year and 
spoke about this topic with the Israeli cyber coordinator, with 
Energy Minister Steinitz, and with Prime Minister Netanyahu.
    To institutionalize our energy research engagements, DOE is 
now establishing a Virtual Center of Excellence for Joint 
Research. And I would be happy to provide more information 
about that in the question-and-answer, if desired.
    Again, I appreciate the opportunity to be with you here 
today. Thank you for the opportunity.
    [The prepared statement of Mr. Elkind follows:]

    Ms. Ros-Lehtinen. Thank you to both gentlemen for excellent 
    We will begin our question-and-answer period.
    Israel and Cyprus are both relatively new to natural gas 
production. In Israel, we saw robust debate on the domestic 
level as well as Supreme Court challenges, regulatory burdens 
to overcome. Most of these have been cleared, but there are 
still some disputes.
    Cyprus is obviously ideally suited to be a focal point of 
sorts for the region, with pipelines headed in all directions. 
Cyprus can simultaneously be connected to Israel, Egypt, 
Greece, Turkey, but not all of these connections will be 
established at once.
    So what comes first? What is the U.S. priority in that 
    Mr. Hochstein. Madam Chair, I think you described it 
correctly. And as the entire region has, as we articulated, 
both Mr. Elkind and myself, the resources discovered in 
different countries. If this was just about common sense and 
you took out all politics and all the geopolitics, we would 
have a great hub that was humming with pipelines going in 
different directions and cooperation.
    So I think when you ask the question, what comes first, I 
think you have to look at where the advancement on geopolitics 
is advancing in line with the technical and the economic 
    Noble Energy and its Israeli partners already negotiated a 
deal with Jordan that started in 2012. And it started as quiet 
discussions and ended up in a pipeline signing agreement that 
will bring gas from Noble to two private companies at the Dead 
Sea area in Jordan. That is already in construction now and 
will be complete. That is a very small amount of gas, but it is 
the first marker and, by the way, the first infrastructure 
project that connects the two countries in a 20-year peace.
    You now have a chicken and an egg. We have to get some of 
the disagreements to move away. Israel has a pipeline that 
connects it to Egypt, goes through the Sinai, as was mentioned 
by several of the members. It was blown up, I think we are now 
at 32 times in the last few years. It can be reverse-flowed so 
it can take gas from Israel to Egypt, but it has a dispute over 
it that is in international arbitration courts. So, until that 
is resolved, it cannot be used. As was also mentioned, we can 
have an offshore pipeline under the sea connecting it to Egypt.
    I think what we have to see now with the normalization 
between Israel and Turkey and if a solution can be reached on 
the island of Cyprus that will allow the unlocking of the 
ability to build a pipeline from Israel via Cyprus to Turkey, 
as well as cooperation with Egypt to allow Israel to use and 
have access not only to the Egyptian domestic market that is 
still thirsty for gas but also for their idle LNG terminals 
that can reach Europe.
    So I have the same question; what comes first? We are 
trying to work on all different fronts to see whatever can come 
first. What is clear is that the United States needs to 
continue to play an active role in trying to find what the 
geopolitical solution is, find the stumbling blocks and remove 
those, so that the private sector can find the economic 
solutions to be able to move forward.
    Ms. Ros-Lehtinen. Thank you very much.
    And, Mr. Elkind, one thing that we don't hear too much 
about when discussing the Eastern Mediterranean energy future 
is the role of the Palestinian Authority.
    Could you tell us, have there been any discussions in the 
administration about the role of the PA in the Eastern 
Mediterranean energy development and what would that role be? 
And how do you deal with Israel and the PA while Hamas still 
controls Gaza?
    Mr. Elkind. Madam Chair, I am happy to start an answer to 
that, but some elements of what you have just posed as a 
question to me fit, I would say, perhaps a little bit more 
naturally in the State Department's lane, so my colleague may 
wish to add.
    The discussions around the development of these resources 
go to the monetization of the resource. These are, after all, 
economic undertakings first and foremost. And without benefits 
to simultaneously, as I said before, to the investors and to 
the host countries, then the idea of these projects remains 
theoretical and doesn't progress beyond that.
    Now, the very obvious political difficulty that exists 
between the state of Israel and the Palestinian Authority is 
one that I think nobody on any side hopes will persist any day 
longer than absolutely necessary. On the contrary, a peaceful 
settlement is in everybody's interest.
    But the specific terms and the degree to which natural gas 
resources from Israel's offshore would be provided to the 
Palestinian Authority is something that is hugely sensitive, as 
the chair will appreciate. There are from time to time 
discussions about this, but I wouldn't feel it appropriate for 
me to go farther than what I have said.
    Ms. Ros-Lehtinen. Well, thank you.
    And Mr. Hochstein?
    Mr. Hochstein. There was an agreement that was signed that 
would allow some of the offshore gas to come into the 
Palestinian Authority to fuel a potential power plant in Jenin, 
which would work for all sides.
    Additionally, there is right near the original Noble 
discovery, the smallest one, called Mari-B, there is a field on 
the Palestinian side of the waters called Gaza Marine that is 
owned by the Palestinian Authority and was leased out 
originally to British Gas, which was purchased recently by 
Shell. There is a strong interest to be able to develop that 
field. I think we need some advancement on the politics to be 
able to move forward, but it would be of great advantage both 
to Israel and to the Palestinian Authority for them to be able 
to develop that field.
    Clearly, there would have to be cooperation, as the gas 
would have to come onshore in Israel, not in Gaza, and then be 
able to be fed into the Palestinian Authority territories. As 
Ranking Member Deutch mentioned earlier, there was some reports 
of a change toward a gas pipeline to Gaza. I think we are still 
trying to work on that. This is a longer-term plan. But what is 
clear is we want to be able to work with the Israelis on 
identifying a way to get the Gaza power plant back online in a 
way that both allows for electricity restoration in a reliable 
manner, as well as allowing for it to be done in a secure 
manner, from Israel's perspective.
    We are also working with them on some renewable energy 
options, which would allow the Palestinian Authority to spur 
investment and economic activity. And my team will be out there 
shortly to work with them on that.
    Ms. Ros-Lehtinen. Thank you. Thank you very much.
    And one last question. Mr. Deutch had brought up the U.S.-
Israel energy center that was authorized in the U.S.-Israel 
Strategic Partnership Act, a bill that Mr. Deutch and I worked 
on which became law in December 2014. It has been nearly 2 
years. Why has this not come online yet? And what needs to 
happen to make it happen?
    Mr. Elkind. Thank you, Madam Chair.
    Indeed, this is something that we are working on 
formulating right now. I will note simply as a statement of 
fact that, while the bill did authorize the creation of the 
center, there were no resources associated with that, and so we 
have had to go through the exercise of identifying those 
resources. We have now done so.
    We think that there is a beneficial function to be played 
by a virtual center that helps to create stronger ties between 
researchers in Israel and in the United States. If you permit 
me, I would note that this would build on literally decades of 
such ties. My father, who at an earlier stage--well, when he 
was still alive--at an early stage in his career was at both 
Brookhaven National Laboratory and then Argonne National 
Laboratory and, in his cancer research work, had exceptionally 
close ties with collaborators from Israel.
    So this is building on a very long and storied history. We 
think there is more important work to be done, and we are now 
working on doing precisely that.
    Ms. Ros-Lehtinen. Sounds good. Thank you so much.
    Ranking Member Deutch is recognized.
    Mr. Deutch. Thank you very much.
    Just to follow up on that point, Secretary Elkind, this 
virtual center that you described, there are now resources to 
create it. Do you have a sense of when that might actually move 
    Mr. Elkind. So we have to work through some of the details 
with our Israeli counterparts, and we have not done that yet. 
But there was a prerequisite feature, which was to identify 
resources, and that has now happened. So I expect that this 
will be operational in 2017, but that is an estimate, it is not 
a commitment.
    Mr. Deutch. Okay. Thank you. Understood.
    Mr. Hochstein, I know you recently traveled with the Vice 
President to Turkey. This is a question perhaps for both of 
you, but I will start with you.
    Many of us have concerns about the direction that Turkey is 
headed, and I am concerned about human rights and freedom of 
speech, long-term security. But I want to believe that 
President Erdogan understands the importance of regional energy 
cooperation. And so I would ask, to what extent during your 
visit did you discuss energy issues, including an Israel-Cyprus 
    I also just had a couple of followups. The recent repair of 
relations between Turkey and Russia has revived talk of the 
Turk Stream project that would carry Russian gas to Southern 
Europe while bypassing Ukraine. And if that happens, are you 
still committed to Turkey as an energy hub, or do other 
routes--Egypt for one; potential pipeline from Israel to Cyprus 
to Greece another--become higher priorities?
    Mr. Hochstein. Thank you, sir. Yes, I did travel with the 
Vice President, and I thank you, sir, for asking me the 
question about the energy part of the discussion.
    We did touch on the energy issues, as we have in previous 
meetings in Turkey, in the Vice President's trips there and in 
meetings in Davos. I think President Erdogan does understand 
and I think the Energy Minister and Prime Minister have a keen 
understanding of the advantages that energy security provides 
for Turkey.
    But let me connect the two pieces of your question. Turkey 
today gets just above 50 percent of its natural gas from 
Russia. It gets another piece from Iran as well. So the 
vulnerability in the dependence on a Russian source is an 
economic vulnerability that Turkey is keen to overcome. As a 
result, you have seen an effort to diversify its resources, 
one, through an intention to lease floating LNG terminals to be 
able to import more from the market, and the second, embarking 
on discussions around the region to see how it can diversify 
its sources. The normalization with Israel obviously had a lot 
to do with security issues, but the energy security piece was 
clearly a critical role, as was stated by both countries 
    But to complete that project, in order to be able to 
realize the economic benefit of energy security from the 
normalization, you have to have an agreement in Cyprus, because 
the pipeline that would go from Israel to Turkey goes through 
the EEZ of Cyprus. And I truly hope and believe that Turkey 
understands the critical nature and the strategic nature or the 
element that has been added in on the Cyprus discussions--that 
is, energy.
    But let me connect that to the second question on Turk 
Stream. On the same day of the announcement of the 
normalization with Israel, there was an announcement of 
discussions between Turkey and Russia and then followed by a 
meeting in Saint Petersburg on August 9 between the two 
leaders. And Turk Stream was heavily featured in the press 
releases coming out from Moscow. Turk Stream, or its 
predecessor South Stream combined with Nord Stream 2, are the 
Russian attempt and insistence on continuing to dominate their 
monopoly in natural gas in a significant portion of Europe. The 
Turk Stream that we are talking about now originally was four 
pipelines that would replace Ukraine, the transit through 
Ukraine, that would have a devastating impact on Ukraine. Turk 
Stream today is, first of all, a discussion of one pipeline 
that would essentially swap what Turkey gets from Russia via 
the Balkans with a different route. So that is a little bit 
different from the full Turk Stream that we had talked about in 
the past.
    Still, our view is that we don't need geopolitical projects 
that Russia is financing as it is a national security threat to 
Europe. So I think that there is a lot of room here.
    Mr. Deutch. So, just going back to something you said 
earlier in your answer, are you suggesting that President 
Erdogan, understanding these regional issues, that the desire 
to move forward on these energy issues may actually contribute 
to the likelihood of reunification of Cyprus?
    And if that happens, then, given the concerns about Russia, 
does that become the focus of these energy discussions?
    Mr. Hochstein. Like I said in my testimony, the energy 
piece is not a replacement for solving geopolitical problems 
and disputes that have existed for a very long time throughout 
the region. What they do provide is an incentive, I believe, 
and potentially a catalyst.
    I do believe that all countries in the region--Turkey, 
Cyprus, Greece, Israel--understand what the benefits would be 
for energy security, cooperation, and prosperity if a solution 
could be found in Cyprus. Whether or not one is going to be 
found, I don't know, and there are others that are going to be 
smarter than I am and more informed on that. But it is clear to 
me that throughout the region there is an understanding of the 
linkage between what the benefits are and would be for all 
parties. And that is why I think we are at a critical time.
    Mr. Deutch. And then, finally, Madam Chairwoman, if it is 
okay, just to circle back, given the Zohr discovery and the 
recent Cyprus-Egypt deal and the existing infrastructure in 
Egypt, if a deal in Cyprus--if there isn't reunification this 
year, does that make the Egyptian option essentially phase one 
for the Eastern Med?
    Mr. Hochstein. I certainly think that there can be multiple 
phases here. I think it is not a zero-sum game. There is enough 
gas already discovered in Israel and Cyprus and Egypt to allow 
for gas to flow in both directions.
    I think the cost is going to feature. So the cost of a 
pipeline to Turkey via Cyprus through the island is far cheaper 
than some of the other options, surely than the one that was 
mentioned before to Europe, which is extraordinarily expensive.
    So I think the economics do allow for both options. And I 
think they compete a little bit differently, because one would 
be LNG from Egypt to Europe or to the other parts of the 
international market; to Turkey, it would be pipeline gas, 
which is priced differently. So it provides even more 
flexibility, more options for both Cyprus and for Israel.
    Mr. Deutch. Great.
    Thank you to both the witnesses.
    Ms. Ros-Lehtinen. Thank you very much.
    Chairman Randy Weber is recognized.
    Mr. Weber. Thank you.
    Wow. You know, we have two LNG plants in my district in 
Texas. I am kind of wondering maybe if Texas ought to just 
annex Cyprus and take care of this whole issue, because we know 
how to export LNG.
    So many questions.
    Ms. Ros-Lehtinen. Forget it.
    Mr. Weber. Yeah, I know.
    Mr. Hochstein, you said--I think it was you--in response to 
the chairman's question, it is kind of a chicken and an egg 
thing going on. Well, I would submit, if you can get gas 
production and you can get somebody producing that gas, then 
the egg will follow.
    Because once one country gets that energy security--and you 
can tell me, both of you gentlemen, if you think that is a 
correct assessment--if you can just get your toehold in there, 
if you can just start that production and get somebody 
producing it, don't you think the other countries would see the 
reliability, the affordability, and would follow suit and would 
actually get in gear and do something?
    Mr. Elkind, you look like you are----
    Mr. Elkind. Well, Chairman Weber, we have seen around the 
globe a lot of times instances where backbone infrastructure 
that started--and you can look at Alaska as an example--helps 
to spur other developments in a very constructive way.
    But I go back to the comments about how the global natural 
gas market is changing, and the story in your district is a 
huge part of that. We are talking about a 40-percent increase 
globally in the capacity to liquefy natural gas. And so this is 
a competitive marketplace. And one of the conclusions that has 
for the Eastern Med is that it is going to have to be investors 
who are able to look at a long game.
    So would initial success help? Yes, that has already 
helped, if you look at the case of the early production 
offshore Israel, which has brought a lot of benefits to the 
state of Israel. But the market that surrounds the Eastern Med 
is not simple. It is competitive. It is going to get more so.
    Mr. Hochstein. So I think, to add just the element of the 
chicken and the egg that I mean, so, of course, you are right. 
If somebody starts developing the gas--Israel has developed 
gas, but it is really for the domestic market. It hasn't yet 
developed Leviathan. The reason they haven't developed 
Leviathan is because they had all these concerns and they were 
stuck in court and everything else.
    Mr. Weber. Yeah.
    Mr. Hochstein. They finally get rid of that issue, and we 
are now ready, but here is the issue: A company like Noble or 
any other company, in order to be able to approve and to commit 
to billions of dollars of development of a field the size of 
Leviathan, need to have some contracts for exports that will 
allow them to justify the investment ahead of time. And that is 
when you get to this chicken and the egg.
    Mr. Weber. Well, I think that is what he called predictable 
regulatory regulations to develop this--in your remarks.
    Go ahead.
    Mr. Hochstein. Yeah. So they now have the regulatory 
system, but they need to be able to find markets to sell to. 
They need to be able to conclude arrangements with Jordan or 
Egypt or Turkey or others. Israel doesn't have its own LNG 
facilities, and, therefore, it has to rely on a neighbor to be 
able to get the gas to the international markets.
    So when you say that doesn't one of them need to start 
developing, they do, but they also need to be able to conclude 
arrangements to sell it in order to be able to justify the 
    Mr. Weber. I am aware.
    Mr. Hochstein. That is where we are coming in and trying to 
figure out how do we help that process along, of removing the 
geopolitical stumbling blocks to be able to have the economics 
drive it.
    Mr. Weber. Do you think that the unrest--well, it is 
actually a two-part, I guess, as it pertains to Turkey.
    The chairwoman, by the way, puts on an excellent 
congressional delegation. If you want to go over there and 
learn a lot, she is the ticket.
    Ms. Ros-Lehtinen. Lots of Halloumi.
    Mr. Weber. And she likes the good cheese over there too.
    Ms. Ros-Lehtinen. That is the cheese, not booze.
    Mr. Weber. Yeah. I wanted to get that on the record.
    Do you think that the--I mean, we were over there trying to 
foster a better relationship between the Cypriot Greeks and the 
Cypriot Turks, and then all this stuff happened in Turkey. So 
now you have not just one unrest to deal with, you actually 
have two.
    Elaborate on how important you think the purported coup--
how long you think that is going to take to play out. Is it 
going to have a long-term effect on these negotiations?
    Mr. Hochstein. I really couldn't say the effect, the 
political effect, of the post-coup environment. Obviously, 
Turkey went through a devastating time of recovering from, you 
know, a radical event that they see as their 9/11.
    Mr. Weber. Well, then let me ask you a specific question, 
if I can. I know that is broad and open-ended. Their Minister 
of Energy--because I know there was, like, 60,000 people that 
were kind of arrested and detained and spirited away, if you 
will--was he or she one of them?
    Mr. Hochstein. No. The Minister of Energy is still there--
    Mr. Weber. Okay.
    Mr. Hochstein [continuing]. And I speak to him regularly.
    Mr. Weber. So, in essence, that line of communication is 
still in place.
    Mr. Hochstein. Yeah, I have not seen any disruption--since 
those, you know, 50 days or so ago of the coup, I have not seen 
any disruption in the energy relationship. And especially in 
the region--the conversations, regionally, are continuing. I 
have seen the Minister a couple times since then and spoken to 
him on the phone almost weekly.
    So I think that, while there is a lot of churn going on 
politically in the country and they are trying to get back to 
normal, on the energy front there has not been a change in 
    Mr. Weber. Okay.
    And, Mr. Elkind, did you want to weigh in on that as well?
    Mr. Elkind. Thank you, Mr. Weber.
    The only thing that I would add to this that hasn't been 
covered by Mr. Hochstein is a little bit of the long view.
    We have been engaged with Turkey on these energy issues, 
energy transportation issues, for a long time, back to the 
1990s and the first development of the Caspian Sea resources 
offshore from Azerbaijan.
    And I would say it has been my observation from my time 
inside government in the 1990s, outside governments, working 
with some of the energy companies myself, that there have been 
ebbs and flows in Turkish policy. There have been times where 
our Turkish colleagues really, with a sense of incredible 
purpose, moved forward on the kind of backbone infrastructure 
that I was remarking on before. The Baku-Tbilisi-Ceyhan 
pipeline comes to mind, the South Caucasus gas pipeline.
    I am confident that Turkey will continue to play that role 
of being an important partner in this, in the energy projects. 
I will leave the politics to others. But, again, I stress that 
there have been ebbs and flows. There have been times where we 
wondered, was Turkey still committed to this vision of being a 
key link from----
    Mr. Weber. A connector, if you will?
    Mr. Elkind. Yes. And we will see. I think that that is 
still where their intention is, but that is for the Turks to 
determine and for them to show.
    Mr. Weber. All right. Thank you.
    And, Madam Chair, I yield back.
    Ms. Ros-Lehtinen. Thank you, Mr. Weber.
    I am so pleased to yield to Coach Perlmutter because he is 
an outstanding Member of Congress, but his real claim to fame 
is that he goes out there every morning with the congressional 
women's bipartisan softball team and coaches us on to victory. 
So thank you. He is recognized for all the time that he cares 
to have.
    Mr. Perlmutter. Well, now that I know your nickname is 
Lily, you are going to be doing wind sprints when I say, 
``Lily, hit it.''
    No, thank you, Madam Chair, and it is a pleasure to 
participate with your committee. And this is a fascinating 
conversation, obviously very complicated. And, Mr. Hochstein, 
when you talk about geopolitics, I don't know whether it is 
geographic politics or geologic politics, because it is both. 
And there are a couple big players in the region you haven't 
talked about much: Iran and Saudi Arabia.
    You also mentioned energy security and energy prosperity. 
And I think we have to break this down into a couple, three 
phases for me to even absorb anything you guys are talking 
about: National security; sort of the foreign policy 
international relationship, friendship, alliances; and then 
global markets. Because at the price of natural gas today and 
the price of oil today--which, you know, they sort of run in 
tandem--there isn't much of incentive to develop expensive 
fields in dangerous places.
    And so the question then is, Israel developing for their 
own domestic use and their own national security and maybe 
working some of this, these pipelines and things like that, to 
develop international friendships that they might not otherwise 
    So I guess my question to both of you is, with Saudi Arabia 
pumping into a glut and just having an oversupply, and the 
demand has sort of stayed the same out there, so prices have 
dropped, how do you see things developing? Has everything come 
to a screeching halt at these prices? Or what actually is 
happening out there, in this part of the world, as they are 
trying to develop this new resource?
    Mr. Elkind. Thank you, Congressman.
    Has everything come to a screeching halt? Well, no, but 
none of the companies that are involved in any of these 
projects in any of the countries that you have mentioned can 
afford to try to defy gravity. The market creates a backdrop 
that is not favorable and friendly to the kind of large, 
capital-intensive projects that we are talking about.
    But the companies we are talking about also understand from 
the beginning that these are multidecadal projects. And so they 
take a long view that looks not only at today's price 
environment but also an expectation of what that may be for 25 
to 40 years. And that is where I think that there is a general 
sense that, although we have this abrupt change that is 
happening in natural gas markets right now, with new production 
in the United States, first and foremost, but also in other 
places around the globe--there is also a skyrocketing demand 
for a natural gas as a lower-carbon and lower-polluting, in 
terms of air quality, urban air quality, fuel.
    So these companies that we are talking about, by their 
nature, take the long view. They will look at today's reality 
with a sense of caution. You will have read, of course, about 
the reductions in capital budgets that almost every global 
hydrocarbon company is experiencing right now.
    I would say that it is not easy to be new to the 
hydrocarbon business. And Mr. Hochstein commented before about 
some of the bumps in the road that have been experienced as 
Israel tried on various approaches to its interaction as a 
state, with the investor. But we perceive that there is 
progress that is being made. We are optimistic that this 
necessity of creating a predictable pathway into which 
companies can put enormous quantities of resources, of 
investment, we think that this is on a much better trajectory 
now, where we are optimistic because, at base, we hear optimism 
from the companies.
    Mr. Perlmutter. Thank you.
    I mean, I guess--and my time has expired--but you have this 
international, you know, cover that sometimes you have 
alliances, sometimes you are fighting with each other over 
there, and that is a political risk that any company has to 
consider. So that is getting straightened out. So kind of to 
Mr. Weber's question, you know, those kind of things are 
getting ironed out.
    But that price risk, that a Saudi Arabia can drive the 
prices down in the 1980s and drive everybody out of business, 
or they do the same thing at 107 bucks a barrel for whatever 
their goal is, to increase their market share or to keep Iran 
out of business or to try to shut the Russians down, that price 
risk is going to be something that both the bankers as well as 
the oil companies are going to say, whoa, you know, you have 
the international risk tamed, but that price risk is too much 
for us to overcome our worry.
    That is what I see. But I was also a bankruptcy attorney 
and did a lot of oil and gas bankruptcy, so that is kind of my 
mindset on this.
    Anyway, thank you very much.
    I yield back.
    Ms. Ros-Lehtinen. Thank you, Coach.
    Mr. Neugebauer.
    Mr. Neugebauer. Thank you, Madam Chairman, for holding this 
    You know, we have been talking about the increased capacity 
in the region and, obviously, the increased capacity that is 
happening domestically here in the U.S. And when you start 
talking about that infrastructure, you know, I think I hear two 
different dialogues going on. One dialogue is the ability for 
those countries to export, you know, natural gas, but then the 
other is the utilization domestically within their own 
    And I think, Mr. Hochstein, you mentioned that Israel had 
gone from using, like, 11 percent natural gas to, like, I 
think, was it 30 percent? Yeah.
    So the investment to increase the distribution system 
within their own country is a different investment than someone 
coming in and wanting to build export capacity in there. Which 
one of those are you all most focused on now?
    Mr. Hochstein. Well, first of all, I think it is both. 
Israel went through a process of very quickly increasing their 
capacity. And recently--they have reached a certain limit due 
to their existing infrastructure--but as recently, I think, as 
last week, Minister Steinitz announced that they were going to 
do more conversions of three additional coal plants to gas in 
order to be able to take advantage of gas.
    I think this is still an issue for them in their 
negotiations with private sector, because the private sector 
would like to have the guarantee of exports beyond--even if 
there is an increase in the domestic market, they still want 
the certainty of having the optionality of--if they are going 
to be investing, again, in the $6 billion to $10 billion to $12 
billion in developing this field, that they have access to the 
broader market. So there is a cap there.
    In Egypt, we are deeply engaged with the Egyptians on 
trying to work with them on getting a better handle on the 
power sector. Because they are such a historic gas producer, 
they had most--all their power comes from gas, and they ended 
up with plateauing their production, but their demand increased 
    So they had power shortages in the summer during Ramadan 
over the last several years. This past summer is probably the 
best summer they have had, and partly due to a lot of 
engagement by bringing in some American companies to do 
emergency power--with GE, and Siemens was there as well--but 
also thinking through what is the investment strategy 
    Egypt is interesting because, as a result of actually 
changing the investment climate, meaning being willing to 
increase the price that they are going to be buying the gas, 
they ended up with, immediately upon doing that, significant 
new investments, in the billions of dollars. The Zohr field 
discovery was done as a result of that, as was BP's onshore 
discoveries. They also increased their ability to transform 
from an exporter to an importer and bought first one, then 
another, LNG floating terminals to be able to import gas, and 
are looking to--with us and how we can work with the Ministry 
of Electricity and Power--to rationalize the inefficiency in 
the power sector so that they can get more with less. But they 
have had a real struggle in that capacity.
    So, even with the discovery of Zohr, 30 TCF, which is the 
largest in the area, that still, even if it comes online, won't 
be enough to cover the domestic market, which means there is 
still an ability to take Israeli gas or Cypriot gas, deliver it 
to the LNG terminals in Egypt, and use that as an export 
vehicle from Egypt to other markets.
    Mr. Neugebauer. What is----
    Mr. Elkind. If I might just jump in for a second----
    Mr. Neugebauer. Absolutely.
    Mr. Elkind [continuing]. I mean, to your question about 
domestic consumption versus export, part of the calculus for 
all of the potential domestic consumers has to be whether there 
is reliable supply available. And I think about discussions 
that one heard in the United States up until even the early 
1990s, where a standard reaction was, well, why would you use 
natural gas in power plants? Today, the answer is simple: 
Because it is very affordable. It is a clean, cheap, 
inexpensive, and plentiful fuel.
    Now, we have worked with the Israelis on natural gas 
utilization issues that are of interest to them, such as 
natural gas vehicles, which can help to alleviate the 
transportation fuels challenges. They also, as Israel has, have 
some particular challenges in this space, where security 
concerns which would not be front of mind, necessarily, for a 
natural-gas-powered bus in a city in the United States is 
absolutely front of mind to our colleagues in Israel. And so we 
have worked through some of those issues with some of the very 
deep expertise in the DOE lab system. But then, also, 
combination systems. They intend to have a much greater share 
of renewables in their total fuel mix. And the pairing of 
variable renewables resources and quick-ramping natural gas 
generation capacity creates some very interesting opportunities 
for Israel as well.
    Mr. Neugebauer. The power plants in Israel, are they public 
or private plants?
    Mr. Hochstein. There has been a liberalization of the 
market. So, traditionally, the utility company, the IEC, the 
Israel Electricity Company, is government-owned. Recently, they 
have opened up the market in stages to allow for private 
investment to have their own generation. It is still, though, 
overwhelmingly dominant by the IEC, it has sort of a 
controlling board, the PUA, which controls the policy and the 
price setting. So the overwhelming negotiator with Noble and 
its Israeli partners, and Delek, was the PUA, because whatever 
is established there will essentially set the stage for the 
private developers.
    The private developers are now trying to take advantage of 
gas, but they are also trying to take advantage of renewable 
energy and other things. But it is in the early stages of the 
privatization and liberalization.
    Mr. Neugebauer. Well, that will certainly provide 
additional capital, if they will, you know, open up those 
    Thank you. I yield back.
    Ms. Ros-Lehtinen. Thank you so much.
    Dr. Yoho?
    Mr. Yoho. Thank you, Madam Chair.
    I find this fascinating. You know, I was really excited 
when they found those gas supplies in the Mediterranean. And 
then my concerns kind of go along with my colleagues Mr. Weber 
and Mr. Perlmutter. With the geopolitical landscape, this is a 
game changer, obviously. You know, you have this tremendous 
supply of natural gas that is there. And, you know, down the 
road, they might find petroleum, you know, oil there.
    And when you look at the Russian market and what happened 
with the Ukraine as they were looking to go into the EU and 
Russia put the screws on them and tightened down and said, 
well, we are going to hold up your gas, and they threatened 
them, how is this going to affect the Russian market? When you 
see the price of the natural gas and the hit they have taken 
economically--and I know we have talked a little bit about 
that--but how do you see Russia coming into this? And what kind 
of influence are they going to have on the Baltic states there 
and those other ones and teaming up with Iran and putting more 
pressure on that area not to develop this?
    Mr. Hochstein. I think they are following it very closely. 
I think they are very concerned about the change in the market 
because of the history of the cold war, the pipelines that go 
through Ukraine and primarily the Ukraine route delivers gas to 
a significant amount of countries that have the Russian gas as 
100 percent of their supplies. And, in some cases, it is less 
than 100 percent but the other sources are Russian gas that is 
coming through a different venue, so----
    Mr. Yoho. Right.
    Mr. Hochstein [continuing]. It adds up.
    The concern there is that they want to keep this leverage, 
this political leverage. It is not just about selling gas to 
Bulgaria or to Serbia or Croatia or Hungary, et cetera. It is 
about keeping the political leverage that is very strong.
    And every 4 to 5 years, we have seen the utilization of 
that leverage--meaning, in 2005, they shut off the gas to 
Ukraine; in 2006, the chairman of the Senate Foreign Relations 
Committee created my position as a result; in 2009, they shut 
off the gas first to Ukraine, then to the rest of Europe that 
gets its gas through Ukraine; in 2014, they shut off the gas in 
June to Ukraine yet again.
    But we have adapted. And the European Union passed certain 
legislation that makes it more difficult for them. So, in June 
2014, unlike in the past, we were able to reverse-flow gas from 
Poland, from Hungary, and from Slovakia back into Ukraine.
    But what we need, the problem to solve this, it will only 
be solved if there is new infrastructure at critical nodes in 
Eastern and Central Europe that will create a capability to 
import gas. Right now, there is none. All the LNG capability is 
in Western Europe or, for instance, in Spain and Portugal, but 
France doesn't allow any natural gas to flow into France from 
Spain and Portugal, so it is essentially stranded.
    So we have worked with Greece and Bulgaria about creating 
the IGB, the Interconnector Greece-Bulgaria, to see if we can 
help accelerate and develop an LNG terminal in the waters in 
Alexandropoulos in Greece to be able to feed into that, to 
ensure that the gas pipeline from Azerbaijan through Turkey 
into Greece could also go into Bulgaria, to do the same in 
Croatia and Krk island.
    The Eastern Mediterranean, if it is developed, if we are 
successful in what we are trying to do and the Eastern 
Mediterranean develops, it won't only be American gas or 
Australian gas or whomever. It will also be a very close, from 
a transportation cost perspective, for Egyptian LNG to reach in 
or for Turkey to carry that gas because it already has the 
interconnecting infrastructure. So you don't have to pay for 
any new infrastructure.
    So this can really not only create new geopolitical 
relationships in the region--and I mean both geological and 
geographic--but it will also create an ability for Europe to 
use that gas to begin to free itself from the dependency on 
Russian gas and political----
    Mr. Yoho. And that is what I want because that leads into, 
I think, the more serious thing, because as Russia gets 
squeezed more, we know they are going to react in some way, 
more than likely.
    What would you recommend on a U.S. foreign policy, 
something we can do to help--I don't want to say stabilize that 
area--but secure that area with our ally like Israel? You know, 
I mean, more bases, more military equipment, or just a presence 
in that area without overstepping our boundary, but just to let 
them know we are here to help protect our allies.
    Mr. Hochstein. Well, two things. One, I think they already 
would like us to continue the role that we are playing 
diplomatically in creating the connections so that they can 
have an export market into the global market and especially 
into Europe. That is something that they have asked for 
continued support, and we will continue to do that.
    The second, though--and this is not only the 
administration, but Congress as well--is to continue to stand 
steadfast against the Russian projects. The way they will 
undermine these kinds of developments is by building projects 
where they will dump a lot of money--that a normal economic 
project wouldn't allow--to build new infrastructure that 
connects Russia to Europe, that solidifies the monopoly status 
for the next generation or two, and would lock out Israeli gas, 
American gas, others----
    Dr. Yoho. Sure.
    Mr. Hochstein [continuing]. And force them into costlier 
markets further out.
    So we need to continue this work beyond this administration 
and to work with our allies in Western and Eastern Europe to be 
able to block those kinds of political projects that the 
Russians are promoting in Eastern and Central Europe.
    Mr. Yoho. All right. I appreciate it. I am out of time. 
Thank you.
    Ms. Ros-Lehtinen. Thank you so much, Dr. Yoho.
    And I would like to recognize for our last question-and-
answer period Mr. Bilirakis.
    But I want to point out that we have--we are so honored to 
have the Cypriot Ambassador here with us.
    So thank you, sir. Sorry that I did not call you out first.
    Mr. Bilirakis?
    Mr. Bilirakis. Thank you, Madam Chair. I appreciate it so 
    A question for Mr. Hochstein: The U.S. administration in a 
number of previous instances has upheld the right of the 
Republic of Cyprus to exercise its sovereign rights in its 
exclusive economic zone and continental shelf.
    And I have asked this question when I was a member of the 
Foreign Affairs Committee a few years ago, and I received 
confirmation at that time from the State Department. Could you 
reconfirm the above position and inform us, in what practical 
ways can the administration support the effective exercise of 
that right?
    Mr. Hochstein. I don't know what has been said in the past, 
so I will just speak to what is our policy today. And I think 
we have stated it clearly, and I will try to be as clear as I 
    Mr. Bilirakis. Fair enough.
    Mr. Hochstein. We strongly support the Republic of Cyprus' 
rights to develop natural resources in its offshore. I think I 
have said that publicly, both when I was in Cyprus and in 
travels around the region. We have continuously, when there has 
been any obstacle to them, we have worked to clear that and to 
make sure that everybody understands the U.S. position.
    We support American companies and international companies 
in working in all the blocks that have been tendered thus far. 
We supported the third energy--the third bid round that was 
announced just a few weeks ago so successfully. But--not 
``but''--and we also believe that a political solution on the 
island will enhance the modernization of those discoveries.
    So I can tell you that I, personally, am a frequent and 
public cheerleader for discoveries in the offshore in Cyprus. I 
speak weekly with Minister Lakkotrypis and other ministers in 
Cyprus on seeing how we can be in a position to support Cyprus. 
I hope that that answers you as clearly as one can answer that.
    Mr. Bilirakis. Thank you so much. I appreciate it.
    Next question, again for you, Mr. Hochstein: If a 
settlement cannot be reached to unify Cyprus, is the option of 
shipping Cypriot and Israeli gas to Egypt and perhaps utilizing 
the LNG terminals for export elsewhere the most likely phase 
one in the Eastern Mediterranean, in your opinion?
    Mr. Hochstein. Absent other developments that could happen 
between now and then, I think that is the most likely of 
scenarios for phase one.
    But, as we just discussed, Cyprus just had a new bid round. 
ExxonMobil is one of the companies, together with Qatargas, 
that has bid. We have to see if new discoveries will be made.
    Based on what we know today, with the current volumes that 
have been confirmed, the 4\1/2\ to 5 TCF that Noble has 
discovered, I would say that is the most likely option. How 
exactly we do that, there are a number of different options, 
but that is probably the most likely.
    If a settlement is reached, then I think it becomes a phase 
one of two phases or a concurrent.
    Mr. Bilirakis. Thank you.
    All right. Last question. With the recent coup attempt--and 
I know Representative Weber touched on this, but I would like 
to touch this question again--with the recent coup attempt in 
Turkey, how has this changed the dynamics of the region and the 
ongoing Cyprus reunification negotiations?
    Mr. Hochstein. Again, as I have said before, I think I will 
leave the questions about the political implications to others.
    On the energy front, I have not seen a change. I think we 
continue to work together with Turkey on energy in an 
uninterrupted way. And I hope that the developments in the 
region on energy will continue to contribute as a motivator and 
accelerator to provide an incentive for the different parties, 
including Turkey, to reach a just and lasting agreement in 
    Mr. Bilirakis. Mr. Elkind, do you want to touch on that?
    Mr. Elkind. Congressman, thank you, but I don't really have 
anything to add, other than what I have said previously about 
kind of the long view of our engagements with Turkey on energy 
    Mr. Bilirakis. All right. Thank you.
    I yield back. Appreciate it.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Bilirakis.
    And we have 4 minutes to get to a series of votes. So we 
thank our witnesses. Thank you to all the members, and thank 
you to the audience as well.
    And, with that, the subcommittee is adjourned.
    [Whereupon, at 3:58 p.m., the subcommittees were 


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