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July 11, 2007

New Indo-US Energy paradigm explored on Capitol Hill

Young India, Inc. in co-operation with Congressman Jim McDermott (D,WA-7) and Congressman Joe Wilson (R, SC-2), co-chairs of the Congressional India Caucus hosted a briefing on July 11th,2007 on Capitol Hill that brought together a distinguished panel to explore Indo-US co-operation on energy with a focus on building a sustainable relationship. This was the first, in what should be a series of briefings that probe different policy areas on which India and the United States can come together.

Congressman Joe Wilson (R, SC-2), co-chair of the Congressional India Caucus, struck a note of optimism in his opening remarks, saying “I am particularly pleased to see the energy issue addressed”. A long-time and passionate supporter of India, Congressman Wilson, reflecting on his most recent visit to India, expressed confidence that progress could be made between India and the US through enhanced collaboration “on new energy sources, alternative fuels & energy enterprises”. Congressman Jim McDermott (D, WA), a staunch supporter of Indo-US relations, was unable to attend as he was managing legislation on the House Floor at the time of the briefing.

Ms. Daphne Wysham of the Institute for Policy Studies, presented a critique of foreign energy investment in India and India’s current energy portfolio. Her presentation also outlined how the nature and emphasis of investment by the United States in India could be altered to achieve a more environmentally and people friendly energy future. Raising an actionable item for Congress, Ms. Wysham was of the opinion that a positive step down this path could be the diversification of the energy investments in India made by Overseas Private Investment Corporation (OPIC) and EXIM. Such diversification could be brought about by intensifying EXIM’s commitments to renewable and clean energy. Cognizant of the need to make renewable energy economically viable for investors and entrepreneurs she stressed that success could be achieved, saying “if there was a way to generate revenue for clean energy and investing in countries like India with these clean energy projects, we could help by supporting all sorts of small scale projects [making villages & small communities energy self-sufficient]”. She alluded to the example of a West Bengal village where the ingenious use of bamboo technology was at the heart of the village’s energy solution. Ms. Wysham drew the audience’s attention to what she called an “ancilliary” benefit of taking clean energy to rural India by arguing that such a step “would help women and girls [who] are traditionally the ones that spend the time gathering fuel [for cooking and heating]” by allowing them to “spend time in education and economic opportunities.”

Mr. Mark Riedy from Andrews Kurth, LLP shared his expertise on the challenges faced by businesses and entrepreneurs in the alternative energy industry in India today. Drawing on his experience representing numerous clients in this industry, Mr. Reidy said that he was “well aware of the specific challenges faced by the Indian government in needing to revamp its energy policy”. He began by focusing on the systemic and bureaucratic challenges, which included investment constraints, lack of contract transparency, revenue collection and poor arbitration. Continuing on a positive note, he highlighted his successes in setting up profitable renewable energy projects in India in spite of such challenges, saying “for about 25% of the cost of building a plant [in the US], we were able to get 75% rate of return”. Stressing an additional advantage, currently unavailable to such projects in the US, he stated that over and above this rate of return “the venture also received significant carbon credits as well”. Approaching the specific issue of renewable energy from a business standpoint, Mr. Riedy said it was much easier to raise capital for smaller renewable power plants (hyrdo-electric and wind) than for “the so-called Mega/Super Mega Power Stations”. Sharing his recent success in closing two biodiesel deals, Mr. Riedy reported that biofuel projects are now beginning to be financed at sizes of 30 to 100 million annual gallons. Continuing his discussion down a legislative path, he informed the audience of a draft bill on renewable energy that is now being considered by the Indian parliament. Citing this as a positive example he concluded by acknowledging the long journey ahead.

Dr. Arjun Makhijani, President of the Institute for Energy and Environmental Research, focused his talk on two broad themes: clean energy and its impact on geopolitics of the region. He started by questioning the importance placed on nuclear energy in the broader energy context as well as the bilateral relationship between the two “important” democracies of India and the United States. A leading expert in the energy field with a specialization in nuclear physics, Dr. Makhijani spoke with authority on the limitations of nuclear power while stressing the need to “shift Indo-US relations to a new realm in the energy context”. Talking of one of his recent studies Dr. Makhijani said that it was “possible to eliminate both nuclear & fossil fuel sources of energy in the next 40 years at a reasonable cost” and that “both India and the United States should be going down this path.” Dr. Makhijani’s contention was that such a shift in energy policy would give the US more “elbow room for foreign policy” and would give India “much more room in economic and trading policy if the most important thing in India’s balance of payments is not always oil and gas”. Expanding on the larger geopolitical picture of the region Dr. Makhijani brought the Iran-Pakistan-India gas pipeline into sharp focus. He said, “The Iran-Pakistan-India gas pipeline is probably the most important single international energy project [from a transition fuel perspective] that India should be doing”. According to Dr. Makhijani, “[the] pipeline was not only important for energy but also for peace in the region”. His belief was that the establishment of the pipeline would force the three governments to pacify some of the most volatile parts of the region (the Afghan-Pakistan border area among them). He asserted that it was “very difficult to have a secure pipeline without at least a passive assent, and not an active opposition from the United States”. Sounding alarm at Iran’s nuclear program he said it was a “serious issue”. Dr. Makhijani brought the discussion back to the importance of the India – United States relationship by saying that the goodwill generated over the past few years (between India and the United States) should instill faith in India’s ability to secure peace in the region, which would help American interests as well. On a visionary note he concluded that, “If the United States adopts a posture of a zero-CO2 non-nuclear energy economy it could be more transforming of the energy future of the world than the Atoms for Peace [President Eisenhower’s speech to the UN in 1953 that placed nuclear power into the modern mindset] speech was 54 years ago”.

Mr. Rohit Tripathi, President of Young India, Inc. was the last speaker of the briefing and he reminded the audience of the rationale behind the briefing and the vision that inspired it. Mr. Tripathi started by saying that, “It is more important to build a sustainable relationship than it is to build a strategic relationship between India and the United States.” Pointing out the limitation of building a “strategic” Indo-US relationship, Mr. Tripathi questioned why such an important relationship should be held captive to “rapidly changing [geopolitical] interests”. He stressed that a stronger “sustainable” relationship could emerge if, “issues of common interest were addressed collectively leading to changes in the lives of ordinary citizens on both sides.” In searching for a basis for a sustainable relationship Mr. Tripathi acknowledged that India and the United States did not share the same cultural kinship that the United States has with Britain, however, both nations had gone through the same “intellectual evolution” to reach the promised land of democracy. According to Mr. Tripathi, this democratic evolution, and that too through movements which placed nonviolence at the “epicenter of the most important movements in their histiory (Indian Independence Movement and the US Civil Rights Movement)” automatically binds these great democracies. Mr. Tripathi opined that it was all but natural that from here on out the pursuit for better democracies for the people of India and the USA would be a collective endeavor. Mr. Tripathi closed by reminding the audience of the philosophical underpinnings of Young India’s efforts that inspired the briefing – nonviolence. Defining nonviolence beyond its ‘traditional context’ of war and peace, Mr. Tripathi said that nonviolence in policy meant policymaking with a focus on “empowerment” of citizens to fight the various forms of violence (institutional, economic, environmental) faced today. He was hopeful that energy was one area through which empowerment was possible and a sustainable relationship could be strengthened.

This event was moderated by Mr. Seejo Sebastine, a Young India, Inc. board member. Special thanks to Mr. Sean Hughes, senior Legislative Assistant to Congressman Jim McDermott (D, WA) for conceptualizing this event. Mr. Paul Callahan, Legislative Assistant to Congressman Joe Wilson (R,SC) was instrumental in addressing the organizational and outreach challenges. We are grateful to Paul and Congressman Joe Wilson, who spared his precious time to show his solidarity with Young India’s work. Mr. Dino Teppara, Chief of Staff for Congressman Joe Wilson, continued his support for better Indo-US relations by availing his office’s resources to put together this event. We are thankful to him as well. Stay tuned for more on this issue in the coming days and months as this is a multi-dimensional issue yet an issue that needs to be dealt with now.

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