Mutual Needs Fuel Cooperative Efforts Between the United States and
Africa
by Samuel Wright Bodman
U. S. Secretary of Energy
We all agree that we must have a plentiful, reliable and affordable mix
of energy sources, produced both at home and abroad, and transmitted and
consumed in an environmentally sound manner for the future. Energy security
is essential to economic growth and prosperity.
America’s commitment to a multilateral approach to energy security
was spelled out in the comprehensive, groundbreaking national energy policy
that President George W. Bush released shortly after taking office in
2001.
The plan he unveiled contained detailed recommendations for action on
everything from domestic energy production and energy efficiency to renewable
energy and environmental practices.
But the most striking aspect of the policy is that more than one-third
of the recommendations addressed enhanced international relationships.
It recommended working more closely with our Canadian and Mexican neighbors
through the North American Working Group, with the rest of the nations
of the Americas through the Hemispheric Energy Initiative, with the G8
nations through the energy ministerial process, with Russia and the nations
of the Caucasus and Caspian Region, and with the countries of Asia through
bilateral agreements and the Asia Pacific Economic Cooperation forum.
Focus on Africa
The policy specifically recommended that we "reinvigorate the U.S.-African
Energy Ministerial Process ... deepening bilateral and multilateral engagement
to promote a more receptive environment for U.S. oil and gas trade, investment
and operations ... and promoting geographic diversification of energy
supplies, addressing such issues as transparency, sanctity of contracts
and security."
Free trade and free markets are at the heart of our vision of a healthy
international energy system because experience has shown they are the
best at delivering the outcomes that are most favorable for producers
and consumers. Specifically, we want to see more African countries engaged
in programs with the United States under the African Growth and Opportunity
Act (AGOA) and other trade-enabling mechanisms. A reliable energy infrastructure
and a developed energy services sector are critical to developing oil
and gas resources and expanding trade and investment.
Markets and trading partnerships reward participants for efficiency and
innovation. And they deliver what the consumer needs and wants: fair prices,
reliable supplies and a clean environment. They’re the very foundation
blocks of energy security.
So whether you’re talking about Africa or the United States, it’s
clear we each need to take a multilateral approach to resolving our energy
security challenges. The differences are matters of scale. We must meet
rapidly increasing demand for energy by producing or importing reliable,
affordable supplies of energy from many sources and implementing effective
resource management.
We estimate that energy demand in the United States will increase by 33
percent by the year 2025. At the same time, African energy demand is projected
to increase by more than 100 percent, from nearly 10 quadrillion Btus
to more than 20 quadrillion. Same challenge, different scale.
We all must maintain, modernize and expand our energy infrastructure.
We recognize that today’s energy infrastructure in the United States
is aging and inadequate to deliver the increased supplies of electrical
power, natural gas and oil to meet our increasing energy demand.
Africa’s nations and regions each have different energy requirements
and are in different stages of energy infrastructure development. But
they, too, face the challenge of dramatically expanding infrastructure
to meet huge increases in energy demand to fuel economic development.
Same challenge, different scale.
We must also all reconcile energy growth with protection of the environment.
Every nation in the world must protect its environment as it works to
ensure a reliable, affordable energy supply.
For the United States, that means the continued application of advanced
technology and pollution prevention techniques to every step of the energy
process, from production to consumption.
For many regions of Africa, the environmental improvements to land and
air will be spectacular as the switch is made to commercial fuels from
the biomass that nearly two-thirds of the continent’s population
still relies on exclusively for energy, and as it harnesses its vast natural
gas and sustainable renewable resources. Again, same challenge, different
scale.
And finally, we must all work together. No nation can go it alone. Regional
integration and energy interdependence are not options, they are fundamental
to achieving energy security.
• For the United States, multilateralism means reaching across borders
to our two neighbors, Canada and Mexico, and across continents and oceans
to the rest of the world.
• For Africa, it means forging cooperative energy agreements with
dozens of regional and continental neighbors as well as with potential
partners around the world. Same challenge, different scale.
Africa already plays an important role in world oil markets, contributing
more than 10 million barrels per day (MMbd) to the world’s oil supply
of about 84 MMbd. With ongoing exploration, including in deepwater and
ultra-deepwater regions and favorable political and investment climates,
Africa will likely be the source of significant additional oil supplies
over the next 20 years. And, importantly, it is the incremental barrels
that help set the market and increase energy security.
Shared Goals and Cooperative Efforts
I would like to mention briefly some important steps that the United States
has taken with partners in Africa to get us started on our way to achieving
our shared goals of energy security and African economic development.
I’ll begin with the largest infrastructure project in sub-Saharan
Africa, the $4 billion Chad-Cameroon Pipeline Project. Through an international
consortium led by ExxonMobil, it was begun five years ago to deliver up
to 225,000 barrels of oil a day from Chad’s oilfields via underground
pipeline to the coast of Cameroon.
The United States government and my department have been actively involved
in the project, helping to create conditions in which the project can
succeed through programs that monitor implementation of the revenue and
environmental management plans, and by conducting oil spill response training.
With the completion of the 650-mile pipeline in July 2003, Chad has become
a significant energy producer. The pipeline has also created new opportunities
for Cameroon to revive its declining petroleum sector. A share of this
oil even has been exported to the United States, clearly illustrating
the role that African nations can play in the global energy market.
Progress on this huge pipeline project can greatly influence other development
projects, as well. A case in point is the West African Gas Pipeline project.
Scheduled to be ready one year from now, this project will deliver 140
million cubic feet of natural gas per day from Nigeria to commercially
viable markets in Benin, Togo and Ghana.
When complete, the open-access pipeline is expected to help commercialize
much of the region’s natural gas. At a time when the United States
is working to foster a more robust global market for natural gas, the
West African Gas Pipeline is poised to help meet the needs of African
businesses and consumers.
This is an excellent example of the public and private sectors working
in partnership to move a needed project forward.
Numerous natural gas projects are being planned in. Nigeria and Algeria
already export gas, including to the United States. I am pleased to note
that a number of other nations are poised to join their ranks as gas exporters.
Equatorial Guinea, for instance, is building a liquefied natural gas facility,
and Angola has plans for one in the works.
With close proximity to various markets, including the Atlantic Basin,
Africa is positioned to play a greater role in the energy trade and investment
equation. The Department of Energy encourages these developments, and
we pledge to work with all parties to seek ways to develop resources,
promote prosperity and enhance energy security. There are several promising
emerging producers in Africa. Notably, West Africa is a promising exploration
and production region with some of the most favorable rates of return
on investment for companies.
Cross-continental Projects
Beyond the projects just mentioned, we are active on many other fronts.
For example, we are working:
• With Angola and Equatorial Guinea on policy reforms to enhance
development of their oil and gas resources and to facilitate expanded
electrification;
• With Nigeria on policy and regulatory issues, including for the
power sector and liquid fuels sector;
• With South Africa on nuclear energy technology;
• With Botswana on clean-coal technology;
• With Egypt on science and technology cooperation;
• With Algeria on renewable and energy efficiency technologies;
• With countries in East Africa (particularly Djibouti, Ethiopia
and Kenya) on the commercialization of geothermal technology; and
• With Morocco on a groundbreaking renewable energy center in Marrakech.
That is just a partial list of the work the United States is doing with
its African partners in pursuit of our shared goals of energy security
and economic development. Each of these projects is enormously consequential.
Each is designed to strengthen the energy sector in whichever country
it is located. Each is meant to serve consumers for whom access to reliable,
affordable supplies of energy will be of paramount importance in coming
decades.
But, I would add, more important than any particular project are the market-based
principles I mentioned earlier as being the heart of a successful vision
of a healthy international energy system.
The experience of human history has shown that free and fair markets are
the best vehicles for developing and allocating resources, for generating
wealth, for enriching the populations and nations they serve and, in the
case of energy, for a nation to foster a secure and stable energy sector.
Indeed, not only are freely operating markets the best vehicles for accomplishing
these worthy goals, they are the only way to accomplish them.
So I encourage energy ministers throughout Africa to take steps in their
nations that will enhance the ability of markets to develop natural resources
and deliver them to customers. I encourage them to take the steps that
will attract private investment and expertise.
These steps include a commitment to intellectual property protections,
a fundamental commitment to private property rights, honoring the sanctity
of contracts, market transparency and a dedication to regulatory certainty
and the rule of law.
Only when these pillars are in place will private companies feel confident
enough to invest on the scale necessary to help fully develop the abundant
resources found in so many African nations.
That has been the experience in the United States. Over the last century
and a half, our nation has developed the most resilient energy sector
on the planet. It has produced astounding amounts of reliable and affordable
energy that, in turn, have helped create untold wealth.
This fact owes not to any native genius we possess, nor to the oil or
gas or coal resources with which we’ve been blessed, nor to any
other factor as much as our country’s dedication to basic market
principles that have allowed our energy sector to develop organically.
An Infusion of New Capital
Even today, we see the benefits of fostering an environment that encourages
risk-takers to invest in the projects that will help enhance our national
energy security. I was recently informed by Floyd Kvamme of an interesting
development regarding America’s energy position. Floyd is a well-known
venture capitalist who also serves as co-chair of President Bush’s
Council of Advisors on Science and Technology. He told me that for the
first time in history we are seeing venture capital in the billions of
dollars being poured into some very ambitious energy endeavors. In 2005
alone, hundreds of millions were invested in a host of cutting-edge renewable
and clean energy projects. These range from hydrogen fuel-cell storage
and development to solar power to ethanol production.
This infusion of investment capital into such projects is as novel as
it is necessary for helping improve American energy security. Indeed,
the expanding interest by the professional venture capital community is
about the best news I have received since taking on this job.
In years past, of course, we saw the big energy companies make large-scale
investments. Now, in addition, we are seeing new entrepreneurs and new
investors betting on advanced technologies and processes. Their pursuits
are hardly altruistic. They are trying to turn a profit, to get rich.
But the beauty of our system is that if they succeed, we all benefit.
If they win, we all win.
The same can be true of every nation on the continent of Africa. But it
will require a dedication to the bedrock principles of property rights,
contracts, transparency and the rule of law. And it will take a similar
commitment to letting markets take their course.
These are some of the ideas our Congress emphasized in passing the African
Growth and Opportunity Act five years ago. And they are the ideas we will
continue to emphasize in our dealings with African partners in the coming
years.
The Aim: Prosperity and Opportunity
Our aim is for Africa to become a continent of prosperity and opportunity.
Policies like AGOA represent solid progress toward that goal. They represent
progress toward a time when trade and investment is flourishing and everybody
has access to environmentally clean, reliable and affordable energy, modern
and efficient appliances and convenient transportation; when countries
are bound by ties of mutually beneficial trade and other cooperative arrangements
and when overall economic development flourishes alongside energy development,
with all their happy consequences: rising standards of living, education,
training, employment, improved health, freedom and peace.
It is in the interest of everyone that we succeed. With the leaders
of Africa’s nations working together at the highest levels of government
to accelerate cooperation and development, with the deepening of U.S.
relationships with the countries of Africa now an important part of our
national energy policy and with private companies invested in the success
of a developing Africa, I am certain that we will succeed.
Samuel Wright Bodman was sworn in as the 11th secretary of energy on
February 1, 2005, after the U.S. Senate unanimously confirmed him on January
31, 2005. He leads the Department of Energy with a budget in excess of
$23 billion and more than 100,000 federal and contractor employees.
Previously, Secretary Bodman served as deputy secretary of the Treasury
beginning in February 2004. He also served the George W. Bush administration
as deputy secretary of the Department of Commerce beginning in 2001. A
financier and executive by trade, with three decades of experience in
the private sector, Secretary Bodman was well suited to manage the day-to-day
operations of both of these cabinet agencies.
Born in 1938 in Chicago, he graduated in 1961 with a B.S. in chemical
engineering from Cornell University. In 1965 he completed his Sc.D. at
Massachusetts Institute of Technology (MIT). For the next six years he
served as an associate professor of chemical engineering at MIT and began
his work in the financial sector as technical director of the American
Research and Development Corporation, a pioneer venture capital firm.
He and his colleagues provided financial and managerial support to scores
of new business enterprises throughout the United States.
From there, Secretary Bodman went to Fidelity Venture Associates, a
division of Fidelity Investments. In 1983 he was named president and chief
operating officer of Fidelity Investments and a director of the Fidelity
Group of Mutual Funds. In 1987 he joined Cabot Corporation, a Boston-based
Fortune 300 company with global business activities in specialty chemicals
and materials, where he served as chairman, CEO and a director. Over the
years, he has been a director of many other publicly owned corporations.
Secretary Bodman has also been active in public service. He is a former
director of MIT’s School of Engineering Practice and a former member
of the MIT Commission on Education. He also served as a member of the
Executive and Investment Committees at MIT, a member of the American Academy
of Arts and Sciences and a trustee of the Isabella Stewart Gardner Museum
and the New England Aquarium.
Secretary Bodman is married to M. Diane Bodman. He has three children,
two stepchildren and eight grandchildren.
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