Energy in all of its complexity will continue to be “one of the defining issues” of the 21st Century, both domestically and globally, Secretary of State Hillary Clinton told a packed crowd at Georgetown University Thursday.
“The challenges [facing energy]…will only grow more urgent in the years ahead. This will take our nation’s best minds, our most talented public servants [and] our most innovative entrepreneurs. But I believe that we’re up to the challenge,” she told university students and staff members.
“This is a moment of profound change” in the energy markets, and as a result “we are reshaping our foreign policy to reflect that,” Clinton said. “Countries that once weren’t major consumers [of energy] are; countries that used to depend on others for their energy are now producers. How will this shape world events? Who will benefit and who will not…The answers to these questions are being written right now.”
In addition to the change in consumption patterns, “there has been a surge in the global supply of natural gas, creating new opportunities for natural gas producers and lessening the world’s dependence on oil,” Clinton said. “Our use of renewable wind and solar power has doubled in the past four years.”
Moreover, “technology has developed to the point where we can drill for oil and gas in places [that were once thought unreachable] like the Arctic and the South China Sea, opening up new opportunities.”
The United States cannot simply view energy as a domestic issue. “Our country is not and cannot be [an] island when it comes to energy markets,” Clinton said. Oil markets are global; natural gas markets are moving in that direction; and many power grids span national boundaries, she said.
A year ago the State Department created the Bureau of Energy Resources, which oversees the department’s diplomatic efforts on energy. In the coming weeks, “I will be sending policy guidance to every U.S. embassy worldwide, instructing them to elevate their reporting on energy issues and pursue more outreach to private-sector partners,” Clinton said. This is a “signal of a broader commitment by the United States to lead in shaping the global energy future.”
Energy rests at the core of geopolitics “because fundamentally, energy is an issue of wealth and power, which means it can both be a source of conflict and cooperation,” Clinton said. And it is key to political stability. “We have an interest in supporting leaders who invest their nation’s energy wealth back into their economies instead of hoarding it for themselves,” as well as promoting competition overseas and preventing monopolies.
“Consider what’s been happening in Europe. For decades, many European nations received much of their natural gas via pipeline from one country: Russia. Few other sources were available. But that has now changed, in part because of the increased production here in the United States. There’s a lot more natural gas in the global market looking for a home.”
She said the U.S. was able to put economic pressure on Iran this summer due to the fact that producers increased oil output by nearly 700,000 b/d.
The State Department is working with the Department of Energy, which shapes policy on domestic energy issues, noted Clinton. She said the State Department would be sending to Congress “soon” an agreement that it negotiated with Mexico earlier this year to allow oil and gas reservoir development along the two countries’ maritime boundary in the Gulf of Mexico (see NGI, Feb. 27). The transboundary agreement removes a ban on exploration and production activities in nearly 1.5 million acres of U.S. Outer Continental Shelf, which the Interior Department estimates contain as much as 304 Bcf of natural gas and 172 million bbl of oil.
On the electric power side, Clinton said Colombia and the United States have launched an initiative called “Connecting the Americas 2022,” which seeks to link power grids throughout the hemisphere, from Canada all the way down to the southern tip of Chile, as well as extending them to the Caribbean.
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