Saying that the geography of global energy has changed dramatically in terms of both supply and demand, the United States of America today said it has made significant improvements in energy efficiency and greater domestic production.
In his keynote address at the Pacific Energy Summit, Under Secretary Robert D. Hormats for Economic Growth, Energy, and the Environment reported U.S. oil imports have fallen to their lowest level since 1987.
He indicates oil imports as a share of total U.S. consumption have dropped from a 60 percent in 2005 to below 40 percent today.
“The shift has been even more dramatic for natural gas.” – Mr. Hormats
He adds that in the 2005 before the gas boom experts predicted that U.S. LNG imports would rise to 180 billion cubic meters by 2025.
He indicates that the U.S. Energy Information Administration now predicts that U.S. gas production will exceed consumption before 2020.
“This is leading American companies to invest in terminals to export rather than import LNG.” – Mr. Hormats
And, LNG once destined for the United States from places like Qatar, is now fueling economies in Europe and Asia, he noted.
To say that they have seen major changes in the global energy landscape in recent years is, surely, an understatement, he said.
Georgraphy of global energy changes dramatically
According to Mr. Hormats, the geography of global energy has changed dramatically in terms of both supply and demand.
He says the world’s energy mix has changed dramatically as well.
“And, of course, the interaction between energy and environment has emerged as an area of critical importance.” – Mr. Hormats
With these developments, both new opportunities and challenges particularly to the Asia-Pacific region also emerged.
What causes the change?
Mr. Hormats points out that rapid developments in unconventional gas, greater attention to alternative energy, the emergence of large new energy exporters, new oil and gas finds of considerable magnitude, and the meteoric rise in energy demand from emerging economies in Asia have sharply altered where energy comes from, where energy goes, and what kind of energy is produced and used.
The geography of energy has changed for the United States and, indeed, for most of the world as well, he added.
He notes that for much of the period since the oil embargoes and disruptions of the 1970’s and early 1980’s, the United States received the bulk of its oil imports from the Middle East, and more broadly from OPEC.
“This is no longer true.” – Mr. Hormats
He says the majority of its oil imports now come from the United States, in Canada and from Latin America.
“We have especially strong energy partnerships with Canada and Mexico.” – Mr. Hormats
United States cannot successfully guarantee global energy security, efficiency, and market stability on its own
However, Mr. Hormats points out that America’s growing energy self-sufficiency raises a number of geo-political and geo-economic questions.
He says these developments present enormous opportunities not just for strengthening the U.S. economy, and reducing U.S. financial outflows, but also for enabling the United States to pursue new kinds of energy diplomacy.
Mr. Hormats notes that the world’s new energy geography and increased American self-sufficiency should not be seen in the United States or abroad as foreshadowing, or justifying, an American pullback from the rest of the world.
“We live in an interdependent global economy, with interdependent energy markets.” – Mr. Hormats
Energy shortages, price volatility, or disruptions anywhere can threaten economic growth everywhere, he said.
US continues to work with other partners when it comes to energy security
“Therefore, we want to work with participants in this new geography with its traditional partners plus major emerging economiesto help ensure stability and transparency in energy markets, the development of alternative fuels, freedom of navigation, and good environmental practices.” – Mr. Hormats
Mr. Hormats underlined that the United States has seen and will continue to see global energy security, market efficiency, stability, and cooperation to be in our economic, foreign policy, and national security interests.
“But, the United States cannot successfully guarantee global energy security, efficiency, and market stability on its own.” – Mr. Hormats
He says this is especially true today, with so many new or rapidly growing players, who account for ever increasing amounts of the energy consumption and production.
World needs a new vision, a new path forward amid broad sweep of change in the energy arena
According to Mr. Hormats, countries need to focus on producing greater amounts of energy from renewable sources, such as wind, solar, geothermal, and hydro.
In addition, there is a need to continue developing nuclear power, which also offers a source of electricity free of CO2 emissions.
“Accelerating the development and deployment of clean energy technologies will require a renewed commitment to innovation.” – Mr. Hormats
Mr. Hormats also cites that the ongoing natural gas revolution presents an intermediate or bridge fuel opportunity.
The global landscape has changed markedly because of new shale technologies, as well as major conventional gas finds in Africa, the Mediterranean, Australia, and other regions, he stressed.
The United States has organized dialogues with a number of large emerging countries to discuss the development of their gas resources, he said
The State Department’s Unconventional Gas Technical Engagement Program, in particular, is helping countries develop their gas resources safely and reasonably.
Countries should pursue higher environmental standards
Mr. Hormats say, as countries take advantage of dramatic new opportunities stemming from the global gas revolution, they cannot lose momentum in pursuing higher environmental standards.
“This can be done with great effect.” – Mr. Hormats
He cites that in the 1970’s, the United States Congress passed the Clean Air Act.
Owing to this legislation, the United States enjoys some of the cleanest air in the world today, he pointed out.
“Some feared that that the economy would be weakened from clean air regulations. It was not.” – Mr. Hormats
He says national air quality standards for the emission of sulfur dioxide and nitrous oxides from power plants spurred an environment control technology industry that created large numbers of jobs and produced over $37 billion in exports in 2010.
Using energy more efficiently.
Mr. Hormats says the energy intensity which is a measure of energy use per dollar of GDP of the U.S. economy is expected to decline by 42 percent between 2010 and 2035.
He says companies are striving for efficiency not simply to advance good environmental practices, but also because it is good business.
“Being more efficient makes them more competitive.” – Mr. Hormats
Some governments, unfortunately, have gone down a path of providing large fossil-fuel subsidies for their citizens. Although intended to support poor citizens, energy subsidies are, by and large, counter-productive, he noted.
He says these subsidies impose substantial fiscal, economic, and environmental costs.
Several studies have shown that fossil-fuel subsidies benefit high-income households more than the poor, he added.
In addition, removing or reducing energy subsidies would incentivize energy efficiency and lower energy consumption.
US continues to work with countries on energy
Mr. Hormats says facing a rapidly changing worldwide energy picture, the State Department will continue to work across the globe in partnership with others to help countries develop and bolster a variety of new supplies and suppliers, find opportunities to manage the growing global thirst for energy, ensure secure and efficient means of energy transport and transmission, and mitigate environmental damage and climate change.
He states that US own political, economic, environmental, and national security interests depend on a robust energy diplomacy and strong partnerships to seize the opportunities and address the challenges the world faces.
US Launches New Initiative to Bring Clean Energy to Africa
With only one in four households in Africa has access to electricity today, the United States has launched a new initiative and partnership to bring clean energy to Africa.
Africa is lifting off economically, with some of the fastest growing economies in the world.
US asserts that in the midst of what is still a very precarious global economy, that clean energy will bring new jobs, create new livelihoods, support education, new businesses, healthier and more productive lives, as well as reducing the emissions that contribute to climate change.
Too many people and too many places cannot get reliable access to affordable electricity even as abundant energy sources, clean energy sources, remain unused.
Africa is blessed with vast geothermal resources in the East, the world’s largest hydropower resources in the heart of the continent, and bright sunlight everywhere.
Only one in four households in Africa has access to electricity today.
That is 600 million men, women, and children living without power that can’t turn on the lights, can’t use a machine in a factory.
The U.S.-Africa Clean Energy Finance Initiative helps clean energy projects in Africa get started.
It is an innovative partnership between three United States Government entities like the State Department, OPIC, and the U.S. Trade and Development Agency.
The United States planned to use an initial $20 million grant fund to leverage much larger investment flows from OPIC. This will open the door then for hundreds of millions of dollars of OPIC financing, plus hundreds of millions of more dollars from the private sector for projects that otherwise would never get off the drawing board.
This new initiative is part of an across-the-board push by the United States to make clean energy and energy security cornerstones of our foreign policy.
OPIC has scaled up investments in clean energy from 130 million to 1.1 billion as well.
This effort also reflects the United States commitment to the UN’s Sustainable Energy for All Initiative, which seeks to give all people everywhere access to clean energy.
The US government will contribute $2 billion in funds and authorities that Congress made available in 2011 to support clean energy programs and projects in developing countries.
The US government believes this will leverage far more in private investment.
In addition, Bank of America has announced it will invest $50 billion in clean energy over the next decade.
Over the next 20 years, electric power infrastructure will be a $10 trillion industry.
The United States understands that sustainable development
holds the key to shared future to both economic success and its environmental security.
The United States recognizes that governments alone cannot solve all the problems countries face, from climate change to persistent poverty to chronic energy shortages.
In Rio, the United States has announced a wide range of new projects and partnerships. It is joining Brazil to drum up support for urban sustainability programs.
The US is also partnering with the World Bank and others to reduce harmful emissions from solid waste. Currently, the US government is working with companies like Coca-Cola, Unilever, and the rest of the Consumer Goods Forum to combat deforestation through sustainable supply chains.
More than 40,000 people including heads of State and government, parliamentarians, mayors, UN officials, business and civil society leaders attended Rio+20. It seeks to shape new policies to promote global prosperity, reduce poverty and advance social equity and environmental protection.
