Hillary Clinton’s Energy Strategist

 

AS CARLOS PASCUAL SEES IT, energy is at the core of America's power and influence in the world. The Obama administration and Secretary of State Hillary Clinton have tapped Pascual, the former U.S. ambassador to Mexico, to head a significant ramp up of the resources our government dedicates to advance the combined energy and strategic interests of America.

Clinton this fall established a Bureau of Energy Resources in the Department of State to address energy geopolitics, promote alternative and renewable supplies of power and bring energy resources to poor regions of the world suffering from a chronic lack of energy. Pascual, 53, sat down with EnergyBiz in his Washington office for a wide-ranging discussion of his mission and the global energy issues confronting America. His responses, edited for style and length, are below.

ENERGYBIZ What are the objectives of the Bureau of Energy Resources and what kind of resources will be devoted to it?

PASCUAL Our objective is to bring enhanced energy security to the United States. That means energy that is affordable, supplies that are available and supplies that are reliable. The resources that we bring to bear are the diplomatic and policy capabilities of the U.S. government. We will work with suppliers of oil and gas on how to maintain market stability. We can play a strong role in policy leadership on how to bring commercially viable models to extend energy and electricity services to the 1.3 billion people in the world who don't have access to electricity.

ENERGYBIZ What contributions can the United States make to that effort?

PASCUAL It is necessary to identify the kind of policy environment that will attract private capital. The scale of investment that's needed is on the order of tens of billions of dollars a year. Addressing the problem of energy access for all by 2030 will require a $48 billion a year investment every year through 2030. That is not going to come from development budgets. It's going to come from the private sector. And what the public sector can do is to work with individual countries on the policy environment that gives investors the confidence to invest their money.

ENERGYBIZ How is the situation in China different from the underdeveloped nations of the world?

PASCUAL China has already brought electricity to a large share of its population. It's investing more in renewable energy today than any other country in the world. In 2010, it invested about $49 billion in renewable energy, far exceeding any developing or developed country including the United States. It's also investing massive sums in modernizing its coal plant infrastructure, and it's beginning to look at significant investments in gas production. The issue with China is how to ensure that it undertakes investments in ways that have sound regulatory and environmental frameworks. Shale gas is one of the principle areas that we've talked to China about because, as we've seen here in the United States, it's a huge resource with tremendous potential. But it has regulatory challenges on a whole range of issues such as the use of fluids, its impact on water and its impact on air emissions.

ENERGYBIZ They have a carbon capture and sequestration research effort under way that rivals what's being done in the United States. What is the potential of collaborating with China on energy research?

PASCUAL There have been collaborative efforts on carbon capture and sequestration. The Department of Energy has had a lead role in that. It had a conference earlier this fall that was partly focused on an exchange of lessons and information on CCS. It's particularly important to share lessons and information with other countries that are working in this area, such as Norway and the United Arab Emirates. We all stand to benefit from it because as we look at the fuel mix for the global economy for the next 20 years, fossil fuels under almost any scenario will still make up 70 to 75 percent.

ENERGYBIZ To what extent do you think China is ahead of us technologically in energy?

PASCUAL There's no doubt that the United States is the most advanced and sophisticated country in energy technologies overall, especially if we include appliances and efficiency standards. Individual countries have invested in specific areas. China is investing a tremendous amount in solar technologies and is advancing very quickly. The United States is clearly a leader in wind technologies, although others have great capabilities, especially Spain. Germany has great capabilities in solar because of the price differentials that the Germans put in for solar power. We have to have as free a trade as possible in green technologies, which creates the best opportunity for American suppliers and developers to sell their products. We need adequate protection of intellectual property. Both issues are topics we regularly discuss with our Chinese counterparts, Europeans and others.

ENERGYBIZ How does the State Department work with other government agencies addressing these issues?

PASCUAL When we can work together and combine the different capabilities that we have, we can achieve better results. Regularly, we try to work with the Department of Commerce, the Export-Import Bank, the Overseas Private Investment Corp., the Trade and Development Agency, the U.S. Agency for International Development and developing countries in a way that brings together a complementary set of policies that can support economic growth in other countries and that can create an environment where U.S. products can compete more effectively. The Department of Energy is an especially important partner because of its strong research and technical capability.

ENERGYBIZ Are there any initiatives that can link Mexico, Canada and the United States on the energy front?

PASCUAL Absolutely. One of the issues that we've begun discussing with our Canadian and Mexican counterparts is how to develop the most appropriate and effective power interconnections across the three countries. Mexico has strong power generation capacity, lots of hydro power and a strong commitment to introduce more renewable power, particularly solar and wind.

ENERGYBIZ How closely do you work with Secretary Clinton?

PASCUAL Quite closely. I send her weekly notes on the work that we're doing and what some of the big challenges are. Some of those are focused on specific issues or problems and some of those are focused on broader trends of market stability. She has a profound interest in these questions.

ENERGYBIZ If there's a change in administrations in the next election, do you believe the work you've done will continue on?

PASCUAL One thing that impressed me is the consistent bipartisan interest in having an effective American energy policy. There is little doubt in the minds of most sophisticated policymakers that our international energy policy is not a question of bipartisan dispute. It's something that is fundamental to our national security, it's fundamental to our economic growth, and it's fundamental to our ability to understand and predict how the world is going to change. In the end, energy conveys wealth, and wealth conveys power - and it conveys influence regionally and globally. You have to understand those things to be able to effectively operate and conduct a foreign policy in a way that serves your national interest.