REINVENTING USG ENERGY TRAINING

UNCLAS SECTION 01 OF 02 SOFIA 000170

SIPDIS

SIPDIS

FOR DEPT COORDINATOR FOR ENERGY AFFAIRS JEFFREY AND EEB
EURASIAN ENERGY COORDINATOR MANN, EUR DAS BRYZA, FSI FOR
LISA FOX, DOE FOR KATHY FREDRIKSEN

E.O. 12958: N/A
TAGS: ENRG AFSI EPET ECON APER
SUBJECT: REINVENTING USG ENERGY TRAINING

REF: A) 07 SOFIA 1364 (NOTAL) B) STATE 12018


1. Summary: The growing strategic importance of energy in
the 21st century places increased demands on our diplomats to
become experts in areas where, in the past, a generalist's
knowledge would suffice. The training we offer our officers
must therefore evolve to reflect the fact that this complex
issue is emerging as one of our country's defining strategic
interests. This was the conclusion of more than 40 USG
energy officers from 30 posts and agencies who gathered in
Sofia December 6-7 for a conference devoted to midstream
economics and pipeline projects (ref A). This was also a key
conclusion of the Regional Chiefs of Mission Conference on
Energy held in Istanbul in September 2007. Recent changes
announced to FSI's energy course offerings (ref B) are an
important start. This cable offers recommendations,
developed by the more than 40 energy officers at the Sofia
Energy Conference, to further improve USG training on energy
issues. End Summary.

Background


2. Just as U.S. diplomats and civil service employees
working on arms control issues in the 1970s and 80s were
expected to speak the language of throw-weights and boost
phase ratios, today our energy officers need to be able to
calculate netbacks, evaluate undiscovered reserves and
understand the strategic context in which all the
calculations, production sharing agreements, and
intergovernmental protocols fit. With the price of oil at
record highs, increasing world demand, the necessity to
reverse climate change, and moves by certain players to make
energy a game based on political, rather than market, rules,
it has never been more important for our diplomats to be
fluent in the language of energy. Our ability to
successfully navigate the future depends on this fluency and
expertise.

Recommendations


3. Recent changes announced to FSI energy courses are a
welcome start to reinventing USG energy training. The new,
two-day Washington Energy Seminar should be required for all
reporting officers assigned to any key upstream, downstream
or midstream post. It should be highly recommended for other
reporting and PD officers, including those assigned to posts
where energy is not a primary focus. We hope the seminar
will make broad use of the full range of energy experts
available in the U.S. Government and Washington area think
tanks. We also hope that the participants will receive an
overview of current U.S. energy and energy security policy,
including, when possible, talks by key officials at the
Departments of State and Energy and the NSC who make this
policy. For European and Eurasian energy officers, it would
be helpful to receive a short "cheat sheet" on the major
current and proposed pipeline projects and how those fit into
U.S. policy goals. An overview of how to evaluate energy
projects, similar to the one presented at the Sofia
conference by CSIS's Ed Chow, would also be a useful addition
to the Washington Energy Seminar.


4. Real change should be made to the Houston Oil and Gas
Industry Course. While the Petroleum Equipment Suppliers
Association (PESA) has been a valued sponsor of this course
for many years, its desire to focus the agenda on equipment,
drilling techniques, and other specialties of its membership,
while understandable, no longer meets the changing needs of
energy officers who have scarce time for formal training.
Parts of the Houston course are highly relevant and should be
retained: the general overview of how oil and gas go from
the ground to the pipeline to the end user; the tour of an
oil rig; the economics of energy panel including session on
LNG; the interaction with oil and gas industry leaders (and
hearing what they want from the USG in terms of advocacy);
and the seminars at the Baker Institute. Otherwise, the
Houston course should be reformed to focus less on extraction
technologies and more on energy project finance and viability
(from the calculation of netbacks to the evaluation of
political risk); legal aspects of energy agreements
(production sharing agreements, shareholder, host government
and intergovernmental agreements),EU regulations affecting

SOFIA 00000170 002 OF 002


energy, and the intersection between energy and the
environment. One option would be to shorten the Houston
program to three days and combine it with the two-day
Washington Energy Seminar, giving officers one week of
intense, relevant energy training.


5. Many officers suggested the complexity and importance of
energy calls for the USG to offer an educational continuum on
this subject. An introduction to energy issues and policy
could be offered as early as A-100. More generalized courses
could be taken throughout one's career including the current
Washington, Houston, Alaska (which many officers deemed more
valuable than Houston),Denver and Pittsburgh seminars. More
advanced and specialized courses and seminars - on Eurasian
and Asian energy issues, the Southern Corridor, energy
project finance, as well as on nuclear energy, biofuels, and
other renewables, should also be developed.


6. The timing of course offerings is key. Energy officers
present at the Sofia conference suggested that the Washington
policy course be offered several times throughout the year to
allow more officers to attend. Because officers often do not
know what they need to know about energy before getting to
post, training opportunities should be geared not only to
those on summer transfer. To meet this need, training
sessions associated with annual regional energy officer
conferences should be offered. These conferences offer great
"bang for the buck" and give officers an invaluable
opportunity to exchange information and contacts. Additional
instructional materials available on-line would also help
officers once they get to post. In all training courses,
special emphasis should be put on the role of policy,
politics and U.S. diplomats to affect change and influence
outcomes. The use of case studies showing why certain energy
projects succeeded or failed and how U.S. policy influenced
ultimate outcomes would bring energy work to life.


7. The ideas listed above are just a few of the many
suggestions current and former energy officers have on
reinventing USG energy training. We urge course developers
to reach out to energy officers for suggestions on topics and
speakers from the corporate world, academia and think tanks.
We would also like to thank EEB and FSI for their continuing
efforts to offer the best possible training on energy and
energy security.


Beyrle