Mr. Deputy Secretary, six months ago, the International Energy Agency described the United States as a “game changer” on the international energy market. What have been the most significant changes to date?
The United States has seen dramatic changes in its energy portfolio. In the last year, American oil production reached its highest level since 1995. Net petroleum imports into the U.S. are down from 57 percent in 2008 to 42 percent today. This means that not only is the U.S. on track to meet President Obama’s original goal of cutting oil imports by one-third by 2025, we are actually on our way to cutting our oil imports in half by 2020.
We have also seen remarkable progress in the U.S. natural gas market. Total U.S. natural gas production is at the highest level in more than 30 years. And in 2009, we became the world’s leading producer of natural gas. This increase in natural gas production has been led by advances in shale gas extraction. Shale gas increased from 2% of total natural gas production in 2000 to over 35% today.
The promise of clean and renewable energy is already being realized across the United States. Our investments in renewable energy not only help reduce our carbon footprint, they are helping to forge entire new industries here in America. Over the past four years, we have doubled our use of renewable energy sources -- including solar, wind, and geothermal. In fact, the fastest growing energy source in America is wind, representing 44 percent of all new U.S. electrical generating capacity in 2012.
And on the nuclear energy front, the United States is working to reinvigorate our nuclear industry to develop a new generation of safe, clean nuclear power plants in the United States. As President Obama said recently in his speech outlining our Nation’s climate action plan, we are building the first commercial nuclear power stations in more than three decades.
International commentary has tended to view the shale boom in the US either as a transient bubble or as an opportunity for America to become a major energy exporter. Based on your current knowledge, what do you see as the most realistic projections? What can we realistically expect of unconventional forms of energy extraction?
We believe that we have a nearly 100 year supply of natural gas, so we do not view it as a transient bubble. Our unconventional oil development also figures to rise in the years ahead. Of course to gain the benefit of that extensive opportunity, we need constant focus on the safe and responsible development of those resources. President Obama has said that he believes the U.S. could be a net exporter of all fossil energy in the next couple of decades.
In which ways is increased US competitiveness as a result of low energy prices already apparent? What forms of re-industrialization have you been able to observe?
One of the more notable developments is the rebound of domestic manufacturing we’ve experienced recently. Over the past three years or so, we have seen some of the strongest growth in manufacturing since the mid-1980s. Among other factors - like various Obama Administration policies - low energy prices have been very helpful to this sector of the U.S. economy.
What impact will these developments have on the climate goals that President Obama has most recently announced at Georgetown University? Will renewable energy sources play any substantial role in the US energy mix, given especially recent EIA projections that growth in renewables will be minimal through 2040?
As the President has consistently made clear, we need an all-of-the-above approach to develop home-grown energy and steady, responsible steps to cut carbon pollution, so that we can protect our children’s health and begin to slow the effects of climate change.
Every year President Obama has been in office, domestic oil and natural gas production increased. During that same time, the United States more than doubled electricity generation from wind and solar energy. And in 2012, U.S. carbon pollution from the energy sector fell to the lowest level in two decades even as the economy continued to grow.
To continue the momentum on renewable energy, the Administration has set a goal to double renewable power generation once again by 2020. So renewables will continue to play a critical and growing role in our energy portfolio, even as we invest in other low-carbon energy sources like nuclear power and clean coal.
Decisions regarding future US exports of LNG are of great interest not only to Europe. Which considerations will govern such decisions? As you see it, within which timeframe and on what scale are future LNG exports likely to proceed?
Today the United States is the number one natural gas producer in the world, and the increase in domestic natural gas production is expected to continue.
US law requires us to look at the applications on a case-by-case basis, and each on its own merits. This May, the Department announced that it has conditionally authorized the second proposed facility to export domestically produced liquefied natural gas to a country without a free-trade agreement with the United States. We are committed to expeditiously working through the remaining applications, reviewing each one on a case-by-case basis while carefully monitoring market developments.
How important and realistic are energy ‘independence’ and ‘self-sufficiency’ as guides for US policy? Would achieving these objectives, if desirable, not reduce the security of the global energy system?
What Americans care about is that we have energy security, so that our national interests in every dimension – security, economic and environment – can be advanced. Energy diversity supports energy security, and therefore the increases in U.S. oil and natural gas production since President Obama assumed office has strengthened the Nation. We will continue to promote responsible production of our domestic resources. Time will tell how independent or self-sufficient we become, which will also depend on how global markets develop. In any event, more energy resources developed in the United States and elsewhere can lower costs and increase prosperity for everyone, which would therefore increase rather than decrease the security of the global energy system.
Many experts predict a partial withdrawal of the US from international energy markets and a decreasing interest on the part of the US in securing international energy transport corridors. What, if anything, about such predictions do you see as justified?
The United States views diversifying and securing its domestic energy resources as a priority and is taking steps to accomplish this through President Obama's all-of-the-above energy approach. We are doing everything we can to promote a resilient energy supply for our country and our world, and we are working with other countries to collaborate on energy technologies and to reduce the world's carbon footprint. None of this means that we will – or should – withdraw from our global engagements. The President’s National Security Advisor, Tom Donilon, spoke clearly on this topic in his recent speech at Columbia University, where he said explicitly that “reduced energy imports do not mean the United States can or should disengage from the Middle East or the world.” Mr. Donilon emphasized the diverse national security interests that we have around the world, explained how these are intertwined with energy issues, and noted that “the United States continues to have an enduring interest in stable supplies of energy and the free flow of commerce everywhere.”
What role will the IEA play in the future? Will the US reduce its obligations to holding strategic stocks within the IEA regime?
Some of us remember the creation of the IEA in the 1970s, and we have seen it grow from an entity focused on responding to the Middle East oil crisis into an organization that not only provides an important emergency response function, but also generates important data and analysis on the world’s most pressing energy challenges. We anticipate that the IEA will continue to play an important role as countries around the world seek to secure their energy futures and collectively combat climate change.
What new geo-strategic alliances do you see forming on the level of international energy policy and what role could be played by transatlantic ties?
I can only speak from the perspective of the United States, but I will say that the United States has seen many important partnerships develop and strengthen around the world due to shared interests in diversifying and securing domestic energy resources. Trans-Atlantic ties are obviously strong already in many dimensions, and we see those and other ties continuing to strengthen.
What do you expect of the EU? What role do you see energy playing in the current efforts to establish the Transatlantic Trade and Investment Partnership?
The E.U. is already an important partner on energy issues. Our companies work closely back and forth across the Atlantic. Our researchers collaborate as partners on countless projects. In 2009 we created the US-EU Energy Council as a means of enhancing our collaborations on energy policy, energy technology, and energy research; I had the opportunity to travel twice to Europe to join Secretary Clinton for those meetings. Today we are working closely on areas such as technical standards for smart grids, inter-operability of electric vehicles and charging systems, and energy efficiency. As to TTIP, we are working toward a comprehensive agreement that strengthens our transatlantic partnership all across our economies.
Daniel B. Poneman has been US Deputy Secretary of Energy since 2009.