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Energy in the Western Hemisphere: Issues and Strategies

January 12, 2007 - 4:00 pm

Energy Policy and Investment Strategies. The Limits of Oil and Gas. Biofuels and Renewable Energy. Sustainable Development and Regional Cooperation. Forecasts.

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Welcome and Introduction:
Mauricio Font, Bildner Center for Western Hemisphere Studies

Opening Remarks:
Sidney Weintraub, CSIS

Panel I: Energy Policy and Strategies in North America (Canada, Mexico, and the United States)
• Energy in the United States: Needs, Vulnerabilities and the Battle for Market Shares: Alberto Cisneros-Lavaller, Global Business Consultants
• Robert Ebel, Chairman, Energy Program, CSIS
• Canada: Annette Hester, CSIS
• Kathy Sendall, Canadian Association of Petroleum Producers
• Moderator: Sidney Weintraub, CSIS

Panel II: Hemispheric Energy Policy and Investment Strategies
• Brazil and Biofuels: A New Energy Paradigm: Minister Antonio Simões, Director, Department of Energy, Ministry of Foreign Affairs (Brazil)
• Albert Bressand, Center on Energy, Marine Transportation, and Public Policy, Columbia University
• John Kingston, Global Director of Oil, Platts
• Moderator: Mauricio Font, Bildner Center for Western Hemisphere Studies

Lunch Keynote Speakers:
• Luis Giusti, CSIS
• Edward L. Morse, Managing Director and Chief Energy Economist at Lehman Brothers

INTRODUCTION

This seminar explores the energy sector in the Western Hemisphere, with a focus on new policy dynamics, strategies and investment opportunities. The United States and most of the countries in the hemisphere rely on regional sources of energy. While some countries in the region rely on energy production and revenues to drive investments and economic growth, most find themselves pressed by volatile conditions in the world market and supply sources. How to address imbalances and tap opportunities is a top priority for countries and businesses. Increasingly, they are designing fresh strategies. The seminar identifies the new approaches, paying attention to opportunities for collaboration.

The seminar draws heavily from distinguished experts from different countries in the region. We rely heavily on a new study by Sidney Weintraub and associates at the Center for Strategic International Studies. Their Energy Cooperation in the Western Hemisphere: Benefits and Impediments recognizes the need for an international political economic approach and country-based analysis to address challenges and opportunities in the energy sector. Impediments to hemispheric agreement and the urgent need to better understand them receive attention. The Bildner seminar also features renowned regional specialists Alberto Cisneros and others, who will discuss energy-related infrastructure projects under consideration and implementation in several parts of the hemisphere. This event will be of interest to policymakers, business, and academics.

Many countries of the Western Hemisphere are implementing or designing new mechanisms for energy cooperation to secure the kinds of investments and infrastructure required for large-scale energy projects. The workshop considers these opportunities and prospects for cooperation, taking into account the factors that have impeded cooperation in the past. Cooperation will enhance the stability of hemispheric demand for producing countries and further develop capabilities to meet rising demands and satisfy social, economic, and political needs.

THE CSIS STUDY

“Energy Cooperation in the Western Hemisphere: Benefits and Impediments” is based on a two-year research project on energy in the hemisphere. The study draws on country political analyses and the challenges countries face. It probes historical factors (such as Bolivia’s unwillingness to build a gas pipeline through Chile because of historical grievances), political divisions such as Mexico’s inability to reach agreement on private equity investment in gas exploitation), technical challenges (including the capacity to ship more liquefied natural gas or LNG from Trinidad and Tobago and other sources to U.S. ports), dangerous conditions (especially in the Colombian case where large oil reserves conflict with guerilla activity), ideological fervor ( currently creating political tensions in Venezuela), and intra-hemisphere political disagreements which have historically hampered the countries’ ability to successfully forge hemispheric cooperation. Dr. Weintraub is The William E. Simon Chair in Political Economy at CSIS.

The team used a three-pronged approach in its examination of energy in the Western Hemisphere: 1) extensive in country- country research and interviews which set the empirical basis for the analyses of current arrangements, infrastructure, and existing impediments to cooperative understandings; 2) interviews and feedback from key stakeholders, including governments, major oil interests and other relevant actors were crucial for further analyses of current conditions and future projects, and analyses of political will for hemispheric cooperation; and 3) convening a working group of experts and practitioners to discuss findings and ways to overcome challenges that will build consensus around policy recommendations for the future of energy in the region.

At the Bildner Center conference, Sidney Weintraub and his team will present their findings and offer forecasts in hopes of creating a more stable, energy cooperative Western Hemisphere.

REGIONAL DEVELOPMENTS AND ISSUES

Many experts forecast that rising consumption will bring about major energy shortages in the Western Hemisphere within 30 years. Faced with the prospects of shortages and the eventual depletion of oil sources, the rush is on for discovering new hydrocarbon reserves or developing new technologies. Policymakers and investors are examining alternative sources of energy. Brazil’s project for converting biomass into energy and that of deriving fuel ethanol from sugarcane presents is a noteworthy example in the development of an alternative source of energy for sustainable development. Brazil appears to have arrived at a successful formula for stabilizing its energy supply and promoting an environmentally conscious source of fuel – while also creating a substantial number of jobs (approximately 700,000 jobs with its large-scale production of fuel ethanol from sugar cane). The Bildner Center’s meeting will explore this and other cases in a discussion of sustainable development in the energy sector.

Underground resources are the patrimony of national governments and hence subject to political as well as market forces. Currently, Bolivia and Ecuador have initiated processes renegotiating contracts with foreign producers. Some aim at the redesign of energy sectors. What are regional implications of these moves? How will they affect investment patterns? What is the role of cooperation and integration? Natural gas, the fastest growing primary energy source in Latin America and in the entire world, presents an opportunity for regional energy integration. Regional integration may provide protection against dependency risks. But, are Latin American countries ready to participate in transnational energy projects? What risks and dynamics do these projects pose?