Remarks at the Inter-American Dialogue
Deputy Assistant Secretary, Bureau of Energy Resources
And so it is a real pleasure – as the Ambassador said, you know, the current situation presents opportunities and challenges, and I think that I want to focus for a few minutes on the opportunities because I think they are real and I think it is going to change the picture significantly over the next decade. I think when we are sitting here talking about Argentina in ten years from now, it is going to be a radically different conversation.
So starting with – we have talked a lot already about what the President has done with the establishment of a new ministry, applying a qualified minister who is dedicated to reforming the energy sector, reducing subsidies, increasing the incentives for private investment – all of the steps that have already been taken.
The question is then, now that you have started taking those steps, how do you really move the process forward?
We have several initiatives in Latin America, the State Department and the U.S. government does, focused on energy sector reform. One is our Caribbean Energy Security Initiative, which I think I have talked about here before. We also have the Caribbean and Central American Energy Task Force, but we also have bilateral initiatives with Mexico, Colombia, Chile, and now I think we’ll be entering a new era of significant energy cooperation with Argentina.
The Vice President and President Macri had a very good conversation in Davos last month, where energy was an important part of the conversation and they agreed on the importance of getting the energy mix right for our climate goals, leadership on renewable integration, and the potential for increased hydro – natural gas production in Argentina.
The President, as we already mentioned, is going out there next week and energy will definitely be a focus of the President’s agenda and conversation when he’s in Argentina – it will be part of the conversation.
And, finally, in January, my boss, our Special Envoy for Energy, Amos Hochstein had a very good conversation with Energy Minister Aranguren, and we have followed that conversation up by sending a delegation of experts down to Argentina in January to look at where we might cooperate. And I think if I could maybe just talk about three specific areas where I see U.S. – at least from the State Department’s perspective – let me mention too that it is not just a new era of cooperation between State Department and Argentina in energy, clearly our Department of Energy and our EPA will also have new, I think, initiatives and cooperation, but I’m just going to speak from the State Department’s perspective.
So I want to talk about three areas in particular.
The first is looking at renewable energy integration and the power sector. We have already talked here a little bit about some of the challenges with integrating renewables. Argentina has enormous potential – above ground and below ground – in solar, small hydro, but you cannot just turn on the switch and start, as we all know, start cranking up new wind farms and solar farms, and integrate them into your grid and have it work perfectly. You have to design effective options. You have to put in place the right kind of incentives that do not discourage investment. You have to make sure your grid is resilient and you can integrate renewals with having a firm base load to allow for the intermittent generation, but you also need to be able to shave off peak production that’s the most costly and often the dirtiest. All of this takes real technical capacity and I think that there are some areas where U.S. and Argentina can really work together, both – I think Argentina has much to offer because of its own resource potential, but we also have a lot of experience from some of our integration of renewables over the last ten years.
Looking at our climate objectives, I applaud President Macri and commitment to – he has said he wants to even revise and have more ambitious goals than what Argentina committed to in the run-up to the Paris Agreement. We are trying to do the same thing. We have an ambitious agenda. We are looking at, through the Clean Power Plan – the President’s Clean Power Plan – even increasing our solar and wind generation more than we already have. We’ve doubled – doubled wind and tripled solar over the last five or eight years. We have put in place longer tax incentives. We have the Clean Power Plan that would deal with old and new power plants, but as we work to do that, we have some of the similar challenges that Argentina has, and I think working together in those areas offers a real potential for both of us, and that’s one area that I hope the President will be able to discuss next week. But the worst thing for me to do would be to preempt what the President is going to say next week, so please stay tuned for his visit and look at what he announces next week.
So that is the power sector and renewable integration.
The second area is unconventional gas development, and I do urge you to read the report. It is excellent and I could not agree more. We should be sharing best practices and, in fact, our bureau has a program called the Unconventional Gas Technical Engagement Program – the extremely unfortunate acronym of UGTEP, that under that program we do exactly that. We don’t advocate. It is not the United States’ position to tell another country this should be your energy mix, right? Our policy is all of the above. We have important hydrocarbons, renewables, energy efficiency measures, nuclear – every country decides its own mix. But if you are going to develop your unconventional resources, then here is what we have learned over the last decade and we have learned a lot. We have learned a lot about how to work with local communities. We have learned a lot about environmental best practices. We have learned a lot about how to structure concession agreements; how to deal with competing laws and regulations between local communities, provinces and federal governments. And we have developed a cadre of experts that we have used in conferences, seminars and technical exchanges around the world to do exactly that – share best practices. I think it is an excellent program and it really does – it really does provide an objective sort of neutral pro or con view on – if you are going to do this, here is what we learned about doing it right. And it is an area where I would love to see cooperation between Argentina and the United States going forward; an area where we are certainly prepared to do more over the next decade.
And the third area – and then I will wrap up so we have time for questions – and you already alluded to this Ambassador, but it is with the participation of U.S. companies. On the renewables side, on the hydrocarbon side, U.S. companies have some of the most advanced, cleanest, safest technology on the planet, and we would love to see more U.S. company participation in unconventional gas development in Argentina, in the hydrocarbon sector more broadly, and in wind, solar, small hydro – we would love to see that, and it is certainly an area where we are working already on increasing business.