Foreign Policy Aspects of Energy Security B' Glenn Griffin, Jr' U'S' Department of State Texas A

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Foreign Policy Aspects of Energy Security B.
Glenn Griffin, Jr.U.S. Department of
StateTexas AM UniversityFebruary 5, 2007
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Near Term Energy Security is an Oil Issue

• Oil used increasingly in transport sector
• Gasoline, Diesel, Jet Fuel
• Oil accounts for 97 of transport fuel
• 90 of U.S. Electricity from Domestic sources
• Coal, Natural Gas, Nuclear, Hydropower,
  Renewables
• Oil accounts for less than 3 of power generation

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The Presidents State of the Union Strengthening
America's Energy Security Twenty in Ten

• Reduce U.S. gasoline usage by 20 in the next 10
  years by
• Setting a mandatory fuels standard to require 35
  billion gallons of Renewable and Alternative
  Fuels in 2017
• Reforming and Modernizing Corporate Average Fuel
  Economy (CAFE) standards for cars and extending
  the current light truck rule.
• Step Up Domestic Oil Production In
  Environmentally Sensitive Ways.
• Double the current capacity of the Strategic
  Petroleum Reserve (SPR) to 1.5 billion barrels by
  2027.

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Foreign PolicyChallenges

• Volatility in Markets
• Growing Dependence on Imported Oil
• Instability in Oil Producing Regions
• Uncertainties (Future Prices, climate change,
  technologies)

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Addressing EnergyChallenges

• Engagement with allies, producers, consumers,
  NGOs, bilaterally multilaterally, to
• Encourage More Production
• Diversify Supply Sources
• Develop Alternatives to Oil

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Whats Driving the Oil Market?

• Rising Demand (China U.S.)
• Geopolitical Concerns (Iran, Iraq, Venezuela,
  Nigeria)
• Uncertainty over future prices (speculation?)
• Lack of surplus production capacity (Saudi
  Arabia)
• Shortage of Refining Capacity

Market Solution?
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Another commodity price cycle?from WSJ January
19,2007
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The Importance of the Middle East

• 2/3rds of worlds oil in Middle East

• 1/2 of worlds oil in the Northern Gulf

• 1/3 of oil trade through Straits of Hormuz

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Encouraging New Middle East Supplies

• USG Strategic Dialogue with Saudi Arabia
• Encourage production, investment, cooperation
  with U.S. firms
• February 3, 2007 in Riyadh
• Dialogues with other key producers.

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Promoting North American Cooperation

• North American Energy Working Group
• Energy portion of broader Security Prosperity
  Partnership
• Closer cooperation with Canada and Mexico
• Two of four largest oil suppliers to U.S.
• Canada largest natural gas exporter to U.S.
• Facilitate cross-border energy trade

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Diversification West African Oil

• Nigeria, Angola, Equatorial Guinea
• Deepwater Technology
• Crude can move to Atlantic or Asian markets
• Production 7 mbd by 2010
• Concerns Corruption, destabilizing effects of
  oil money
• G-8 Initiative to improve transparency

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Diversification Caspian Energy

• Recognized potential source of new oil and gas
  supplies
• Russian monopoly on oil gas export routes
• Bosphorus a potential chokepoint and source of
  conflict

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Energy Engagement with China

• China is second-largest energy consumer, and
  growing.
• Chinese demand affects world prices and GHG
  levels.
• Many Cooperative Mechanisms
• Five Party Energy Ministerial (China, India,
  Japan, South Korea, USA)
• China-U.S. Strategic Energy Dialogue (Treasury
  leads)
• U.S.-China Energy Policy Dialogue (DOE leads)
• Asia Pacific Partnership on Clean Development and
  Climate (APP)
• APEC Energy Working Group
• International Partnership for the Hydrogen
  Economy (IPHE)
• Carbon Sequestration Leadership Forum (CSLF)
• International Thermal Nuclear Experimental
  Reactor (ITER)
• IEA Fusion Agreement
• Methane to Markets
• DOE ST Agreements.

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International Energy Agency

• Established in response to the energy crisis of
  the 1970s.
• 26 Members, 19 in Europe.
• Collects and manages data, research.
• Manages Strategic Petroleum Reserves.
• Helped calm petroleum markets following the
  impacts of Hurricanes Katrina and Rita in 2005 -
  60 million barrels of oil put on the market over
  60 days.
• State Department Budget Includes 6 million for
  IEA, about 25 of IEA budget.

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U.S. EU Cooperation

• Energy Security Cooperation Dialogue
• Efforts to develop new Caspian/Central Asia gas
  supplies.
• Exploration of options for helping Ukraine boost
  end-use energy efficiency and its improve energy
  infrastructure.
• High Level Dialogue on Climate Change, Clean
  Energy and Sustainable Development
• Advances the 2005 G8 Gleneagles Plan of Action
  for Climate Change, Clean Energy and Sustainable
  Development.
• Guided by the ultimate objective of the UN
  Framework Convention on Climate Change.

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U.S. EU Cooperationcontd

• Energy Efficiency Working Group
• Dialogue between EPA and Commission on the
  possibility of expanding the US/EU Agreement on
  ENERGY STAR to include other globally traded
  products such as consumer electronics
• Identify cooperative efforts in energy
  conservation in buildings and housing.
• Biofuels Working Group
• Examine RD agendas to identify research gaps and
  potential collaboration

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International Technology Partnerships

• Carbon Sequestration Leadership Forum (CSLF)
• advances technologies for capture, transport, and
  storage of carbon dioxide to mitigate greenhouse
  gas emissions 17 members.
• International Partnership for a Hydrogen Economy
  (IPHE)
• transition to the hydrogen economy, with the
  goal of making fuel cell vehicles commercially
  available by 2020.
• GenIV International Forum (GIF) Policy Group
• RD for the next generation of nuclear energy
  systems.
• Methane-to-Markets Partnership (M2M)
• international cooperation on the recovery and use
  of methane as a clean energy source.
• works closely with the private sector to develop
  methods to recapture wasted methane escaping
  from landfills, leaking from poorly maintained
  oil and gas systems, and vented from underground
  coal mines.

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Extractive Industries Transparency Initiative
(EITI)

• Over 20 governments, plus International Oil
  Companies, Industry Associations, and NGOs.
• Promotes financial transparency in oil, mining
  sectors in resource-rich countries.
• Intended to prevent corruption and promote wise
  use of resources.
• Participants agree to implement transparency
  principles.

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Beyond Petroleum

• Non Traditional Sources oil shale, heavy oil
• Biofuels
• Natural Gas Abundant world wide, LNG, CNG
  options.
• Coal Abundant in U.S., but need to address GHG
  problem.
• Hydrogen moving forward