I’m pleased to be able to participate in this meeting because we are living in a period of unprecedented energy transformations, both in terms of energy supply and demand patterns, and rapidly innovating technologies to meet that demand. This has profound geopolitical implications.
Energy issues continue to play an important role in U.S. foreign policy. Energy’s prominence as a proxy for geopolitical issues took hold during the 1970s oil crisis. Then-Secretary of State Henry Kissinger noted that these events helped to catalyze the modern interdependency of states.
In founding the International Energy Agency, Kissinger helped establish a new international architecture to ensure resilient energy supplies. IEA remains important today. Yet we are entering a new era of energy abundance across energy types. The tremendous expansion of renewable energy is taking place at the same time as new technologies have unlocked vast new reserves of oil and gas.
The United States is now the largest oil and gas producer in the world, and the second largest producer of renewables. This energy abundance has profound implications for economies and foreign policy.
Why? Because energy is fundamental to economic development. It’s a prerequisite to security, and facilitates political stability. Moreover, access to energy strengthens sovereignty, deepens trade and commercial ties.
And as the Commission’s report puts it, the energy transformation is not just about moving from one set of fuels to another, it’s about the broader social, economic, and political implications of this transformation.
But if this new era of energy abundance is to become reality for all nations, there are critical challenges that must be met.
Director General La Camera’s vision for IRENA to increase its work catalyzing the development of energy projects on the ground is the right step to make this transformation a reality.
Given the important geopolitical implications of this transformation, the Global Commission report is particularly timely. We must now work together to address the issues it identified.
The report notes that growing public demand for cleaner forms of energy is expanding. The global middle class will grow from the current 3.5 billion people to 5.3 billion people in just a decade. These populations are demanding that their countries provide cleaner forms of energy, catalyzing the energy transition. This is, my friends, very much a bottom-up phenomenon, globally.
We must work to ensure that this transformation does not lead to unintended consequences. The Commission’s report noted that renewable energy and batteries are minerals intensive.
The scale of the growth in projected demand for energy minerals is dramatic. The World Bank in 2017 projected that demand for some of the minerals that go into battery storage technologies could increase over a thousand percent. The drive for clean energy has initiated a global race to secure new mineral resources.
This is positive if it spurs economic development in countries where it is most needed. But as the report notes, the harm can be significant if extraction is done poorly. It seems that media stories covering the dark side of mineral mining’s contribution to “clean” energy are on the rise. Reports of child or forced labor, environmental degradation, and corruption are casting a cloud over certain countries and regions.
If resources are developed improperly, it can exacerbate inequality, corruption and other problems and lead to a consumer and investor backlash. This would be the worst of all outcomes – developing countries would be denied their ability to drive their economies forward, and the world would be denied the clean energy materials, when it needs them the most.
Mineral-rich developing countries have an opportunity to become part of the global production and value chains of renewable energies, provided they put the right policies and governance frameworks in place.
The United States has a long record of managing mineral resources and has developed a set of best practices over time. But we’re not alone. We’re partnering with other countries with similar strong records of responsible sourcing, such as Australia, Canada, Botswana, and Peru—to form the Energy Resource Governance Initiative or ERGI.
Through ERGI, we will examine how our respective countries – spanning four continents with diverse histories, regulatory environments and cultures – have been successful over time. We’ll develop a toolkit to assist resource-rich countries to develop their own best practices, and contribute to clean energy transformations.
ERGI complements IRENA’s work in showing best practices for renewable energy projects that promote economic development.
Stakeholders must be mindful that clean energy technologies require large shovels at the beginning of their life cycle. We must work together to ensure sound mining governance and resilient supply chains that advance human rights, environmental protections, and support local communities.
The United States is committed to the mission and looks forward to working in partnership with other countries and other critical stakeholders such as IRENA.