Energy Diplomacy in the 21st Century

By:  Hillary Clinton
Date: Oct. 18, 2012
Location: Washington, DC



So I came here because it's not only that young people have a great stake in our policies at home and abroad about energy, but because we all have to work together to find answers to some of the challenges that it poses. Energy cuts across the entirety of U.S. foreign policy. It's a matter of national security and global stability. It's at the heart of the global economy. It's also an issue of democracy and human rights. And it's been a top concern of mine for years, but certainly these last four years as Secretary of State, and it is sure to be the same for the next Secretary.

So here today, I want to talk about the vast changes taking place regarding energy worldwide and what they will mean for us. America's objectives for our energy security and our progress in other places is critical, and the steps that we are taking to try to achieve those objectives are ones that I want briefly to outline to you.


Second, energy is essential to how we will power our economy and manage our environment in the 21st century. We therefore have an interest in promoting new technologies and sources of energy -- especially including renewables -- to reduce pollution, to diversify the global energy supply, to create jobs, and to address the very real threat of climate change.

And third, energy is key to economic development and political stability. And we have an interest in helping the 1.3 billion people worldwide who don't have access to energy. We believe the more they can access power, the better their chances of starting businesses, educating their children, increasing their incomes, joining the global economy -- all of which is good for them and for us. And because corruption is often a factor in energy poverty as well as political instability, we have an interest in supporting leaders who invest their nations' energy wealth back into their economies instead of hoarding it for themselves.


Right now, for example, in a dramatic reversal, developing countries are consuming more of the world's energy than developed countries. China and India's energy needs are growing rapidly along with their economies. Demand is also rising across Central Asia and South America too. There's been a surge in the global supply of natural gas, creating new opportunities for gas producers and lessening the world's dependence on oil. And technology has developed to the point where we can drill for oil and gas in places like the Arctic and the South China Sea, opening up new opportunities but also raising questions about our environment and catalyzing sources of tension.

Now, who will benefit from these changes? Where will we get the energy to meet the world's growing needs? How can we make sure that the institutions that kept global energy markets well supplied in the 20th century, like the International Energy Agency, which the United States helped to create after the oil crisis in the 1970s, continue to be relevant and effective in the 21st century?

And then of course, there are changes here at home that affect the international energy outlook. Many Americans don't yet realize the gains that the United States has made. Our use of renewable wind and solar power has doubled in the past four years. Our oil and natural gas production is surging. New auto standards will double how far we drive on a gallon of gas. And for the first time, we've introduced fuel efficiency standards for heavy trucks, vans, and buses, all of which will cut costs. That means we are less reliant on imported energy, which strengthens our global political and economic standing and the world's energy marketplace.


One year ago this week, after a major strategic review of our nation's diplomacy and development efforts, the State Department opened a new bureau. It's called the Bureau of Energy Resources, and it's led, as Dean Lancaster said, by my Special Envoy and Coordinator for International Energy Affairs, Ambassador Carlos Pascual, who is here today. The bureau is charged with leading the State Department's diplomatic efforts on energy. And 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 energy partners.


And by the way, Dean Lancaster, six members of the State Department's energy team are graduates of Georgetown University and they're here with me today as well. So thank you, Georgetown. (Applause.) That's a shameless pitch for the Foreign Service and the State Department. (Laughter.)


Let me speak just briefly about the three pillars of our global energy strategy. First, regarding the geopolitics of energy, we're focused on energy diplomacy. Now some of our energy diplomacy is related to issues in the headlines. You may have read about heated disputes over territorial claims in the South China Sea. Well, why do you think that's happening? There are potentially significant quantities of oil and gas resources right next door to countries with fast-growing energy needs. And you can see why at times the situation is becoming quite tense. We are supporting efforts by the parties themselves to adopt a clear code of conduct to manage those potential resources without conflict.

Now some of our energy diplomacy is focused on remote areas like the Arctic, a frontier of unexplored oil and gas deposits, and a potential environmental catastrophe. The melting icecaps are opening new drilling opportunities as well as new maritime routes, so it's critical that we now act to set rules of the road to avoid conflict over those resources, and protect the Arctic's fragile ecosystem. We're working to strengthen the Arctic Council, which includes all eight Arctic nations, including the United States, so it can promote effective cooperation. Last summer I went up to Tromso, above the Arctic Circle, in Norway, to where the new Secretariat of the Arctic Council will be based, in order to discuss these issues, which four years ago didn't have much currency, but today are being seen as increasingly important.

Another focus of our energy diplomacy is helping to promote competition and prevent 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. Plus, there's natural gas in the Caspian and in Central Asia. They'd like to sell it, and Europe would like to buy it. But first, they need to build pipelines. And that's the goal of a project called the Southern Corridor, which would stretch across the European continent. The United States has been an active partner to all those participants to help move this project to fruition.

Now why have we done this? Well, we want to see countries grow and have stronger economies, but also because energy monopolies create risks. Anywhere in the world, when one nation is overly dependent on another for its energy, that can jeopardize its political and economic independence. It can make a country vulnerable to threats and coercion. And that's why NATO has identified energy security as a key security issue of our time. It's also why we created the U.S.-European Union Energy Council to deepen our cooperation on strategic energy issues. It's not just a matter of economic competition, as important as that is. It's also a matter of national and international security.

Security is also at the heart of perhaps the most important energy diplomacy we have conducted in the Obama Administration. I'm sure you know that the United States and the European Union and other likeminded countries, as well as the United Nations, have imposed sanctions on Iran as part of our dual-track diplomatic effort to persuade or compel Iran to stop its pursuit of a nuclear weapon. You may also know that a major target of these sanctions is Iran's oil industry. What you may not know, because it doesn't make headlines, is how much painstaking diplomacy went into making these sanctions first, adopted, and then, effective.



The approach has worked. The EU put an oil embargo into place in July, and we have certified that every single one of Iran's oil importers have either significantly cut or completely ended their purchases of Iranian oil. We've been able to put unprecedented economic pressure on Iran, while minimizing the burdens on the rest of the world.



We've also worked intensively to support Iraq's energy sector. In 2010, Iraq produced about 2.3 million barrels of oil each day. Today, that number is 3.2 million. And Iraq is now the number two oil producer in OPEC, surpassing Iran. This is a major Iraqi success story, helped by the Departments of State and Energy. We worked with the Iraqis to identify bottlenecks in their energy infrastructure, to improve their investment plans, and get more oil to the market. And there's no question that Iraq's increased production has helped stabilize oil markets at this pivotal moment, and it provides a foundation for a stronger economy to benefit the Iraqi people.


Now, in addition to these examples of energy diplomacy, we're also focused on our second area of engagement: energy transformation -- helping to promote new energy solutions, including renewables and energy efficiency, to meet rising demand, diversify the global energy supply, and address climate change. The transformation to cleaner energy is central to reducing the world's carbon emissions and it is the core of a strong 21st century global economy.




As an example, let me tell you what we're doing with our neighbors in Latin America.






At the same time that we're pursuing energy transformation, however, we have to take on the issue of energy poverty. And that's the third area of engagement I will mention. Because for those 1.3 billion people worldwide who do not have access to a reliable, sustainable supply of energy, it is a daily challenge and struggle. It also runs counter to energy transformation, because these people are burning firewood, coal, dung, charcoal, whatever they can get their hands on. They're using diesel generators, and no electricity is more expensive than that. And besides, these are dirty forms of energy -- bad for people's health, bad for the environment. But it doesn't have to be that way. We have the technology and know-how that can help people leapfrog to energy that is not only reliable and affordable, but clean and efficient. So energy transformation and ending energy poverty really do go hand in hand.


The United States has another initiative that tackles a pernicious aspect of energy poverty: cookstoves. Nearly 3 billion people -- that's almost half the world's population -- don't have access to modern cooking technology. They just have fires, often inside their homes, which cause toxic air pollution, killing nearly 2 million people -- mostly women and children -- every year. Think about that -- millions dying because of something as simple, as ordinary, as vital to their survival as a stove. Now, that's a problem that we are calling on the world to help us solve. Three years ago, I launched the Global Alliance for Clean Cookstoves, which is working with foundations, private companies, and other governments to get clean and affordable stoves into 100 million homes worldwide by the end of this decade.

And finally, we're focused on a key factor in both energy poverty and political instability -- poor governance. History tells a frustrating tale. Countries that are rich with energy resources often have less democracy, more economic instability, more frequent civil wars. They are far more likely to be ruled by dictators, and oil can embolden those dictators to start conflicts with other countries. It's often called the resource curse. But the resources aren't the problem. It's greed. The resources can be used to transform a country's future for the better, but only if they're used the right way for the right purposes. So we need to work to undo the resource curse, especially now as demand for energy guarantees that more developing countries will become oil exporters.





So whatever you're studying here at Georgetown, I hope you'll follow this issue and maybe even consider becoming engaged, because the challenges that I've briefly outlined will only grow more urgent in the years ahead, and we need all the smart people we can possibly muster working to solve them. This will take our nation's best minds, our most talented public servants, our most innovative entrepreneurs, and millions of dedicated citizens. But I believe that we're up to the challenge, that we can, working together, secure a better future when it comes to energy supply and energy sustainability, and a future that by meeting those two objectives provides greater dignity and opportunity for all and protects the planet we all share at the same time.

Thank you very much. (Applause.)

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