Deputy Secretary Daniel Poneman
FIESP Energy Conference
Monday, August 15, 2011
Sao Paulo, Brazil
Bom dia. Thank you, Mr. Xavier, for the kind introduction. And thank you, FIESP, for the opportunity to speak here today at this important conference.
Before I begin, I’d like to take a moment to recognize my colleagues joining me on stage: Carlos Henrique de Abreu e Silva, the Director of U.S., Canada and Inter-American Affairs for Brazil’s Ministry of Foreign Affairs; Steven Bipes, the Executive Director of the U.S. Section of the Brazil-U.S. Business Council; and Luiz Gabriel Rico, the CEO of the American Chamber of Commerce for Brazil.
I am also joined today by officials from throughout the United States government, including Ambassador Carlos Pascual, the Department of State’s Special Envoy and Coordinator for International Energy Affairs, as well as my colleagues from the U.S. Department of Commerce, the United States Trade and Development Agency, and the Overseas Private Investment Corporation. We are honored to be here today.
The United States and Brazil share a strong friendship – one based on common values and common interests.
Brazil is a thriving democracy, a vibrant economy, and a close and valued partner. Brazil has emerged as a major financial and economic power on the world stage, and as you prepare to host two of the world’s biggest sporting events, that global leadership will only continue to grow.
As the two largest economies and the two largest democracies in the Western Hemisphere, the United States and Brazil have much in common. The relationships between our people and our businesses, our common economic approaches and our richly multicultural societies, and the shared paths of our histories are important building blocks that serve as the foundation of a growing and deepening bilateral relationship.
From economics and energy to culture and the social agenda, there are countless opportunities for the U.S. and Brazil to cooperate in ways that will promote our mutual prosperity and security, while enriching our daily lives.
We saw that when President Obama visited in March. The broad scope of new agreements and partnerships that were launched during that trip speaks to the wide-ranging agenda for cooperation that we are undertaking.
In the energy arena -- which brings me here today -- we have already begun to strengthen the economic, commercial, and scientific cooperation between our two countries. This is helping to grow our economies, to strengthen our energy security, and to address the challenge of climate change.
But before I delve into some of the specific areas of cooperation between the United States and Brazil in more detail, I want to take a step back, because the energy and climate challenge is a global one that requires international action.
Over the coming years and decades, global energy use and the demand for the world’s limited energy resources will continue to grow. Fueled by the international economic recovery, population growth, and economic development around the world, this demand will place ever-greater pressures on scarce energy supplies.
As a result, it’s likely that concerns about energy security will grow as well. And at the same time, all of us are facing the escalating challenge of climate change.
The change in the global climate expected over the coming decades could have devastating consequences around the world, from droughts and floods, to severe storms and rising sea levels. To address it, we will need to invest in more efficient technologies and find new, low-carbon energy resources that will satisfy growing global demand.
But it’s also important to note that tackling the energy and climate challenge offers tremendous opportunities for people and businesses around the world. It offers the potential to expand into new commercial markets, to create new industries and new jobs in the clean energy sector, and to expand the prosperity of our people.
As we look to capitalize on these opportunities and address these growing challenges, cooperation on a range of energy issues is more important than ever. By working together, we can do far more than we can by working alone. And we can do it in a way that benefits workers and families everywhere.
That is why the international community has come together to develop a global framework for reducing carbon pollution and accelerating the transition to a global clean energy economy.
This includes implementing the agreements from last year’s climate change negotiations in Cancun, which are building a global framework focused on reducing carbon emissions. And it includes the wide-ranging initiatives focused on energy and climate that have been highlighted in the G20.
In addition, countries around the world are already taking concrete steps to advance clean energy as part of the Clean Energy Ministerial. The Clean Energy Ministerial – launched in 2010 – brings together energy leaders from more than 20 of the world’s major economies to promote policies and programs that will accelerate the transition to a global clean energy economy.
The countries involved in the Ministerial – including the United States and Brazil – collectively account for more than 80 percent of global energy consumption and more than 90 percent of global investment in clean energy technologies. That means that with these programs, we can help to achieve dramatic reductions in global carbon pollution.
Already, initiatives are underway to improve the efficiency of buildings, appliances and industry; to develop clean, renewable sources of energy; to implement smart grid technologies; to deploy advanced vehicles, and more.
And in the private sector, too, companies around the world are stepping up to the plate to spur innovation, bring new technologies to market, and help develop a clean energy future around the world.
For example, a few years ago, Citibank announced a ten-year, $50 billion initiative to address global climate change through investment, financing, and related activities that are supporting the commercialization and growth of alternative energy resources in markets around the world.
There are also steps under way regionally to advance the development and deployment of innovative, clean energy technologies that will help to combat climate change, to advance sustainable development, and to spur economic prosperity.
At the 2009 Summit of the Americas in Trinidad and Tobago, President Obama invited countries from across the Western Hemisphere to join the Energy and Climate Partnership of the Americas.
Under this framework, we have joined together as a region to launch close to 40 different initiatives and projects that are already having an impact in communities throughout the Hemisphere.
For example, a new Renewable Energy Center in Chile and a Center for Energy Efficiency in Costa Rica are serving as regional centers of expertise to promote clean energy technologies and policies in the region.
In Central America, leaders are working to integrate their electrical infrastructure through a regional interconnection system.
The United States and Brazil have partnered with the American Planning Association to build out a network of urban planners throughout Latin America and the Caribbean that will help promote green buildings, energy efficient housing, and sustainable transportation in low-income communities across the Hemisphere.
And through the U.S. Trade and Development Agency’s Clean Energy Exchange Program of the Americas, nearly 50 Latin American and Caribbean energy officials have visited the U.S. as part of a series of reverse trade missions focused on clean energy.
Building on a Strong Foundation for U.S.-Brazil Clean Energy Cooperation
These international and regional initiatives are critical to addressing the global energy and climate challenges.
But there is also the need -- and the opportunity -- for bilateral energy cooperation between the region’s two largest economies. By working together to advance clean energy, we can generate jobs in both Brazil and the United States, make energy supplies more secure, and continue to address the challenge of climate change. Indeed, this is our shared responsibility.
On both a government-to-government level as well as a company-to-company level, earlier cooperation across a range of energy technologies has already put in place a strong foundation from which to launch a new phase in our bilateral energy partnership.
For years, our countries have worked together to advance research and development efforts for next generation biofuels, and to promote the expansion of biofuels industries in partner countries around the Hemisphere.
Our nuclear security organizations have been partnering together for more than 15 years to strengthen nuclear safeguards and to reduce the risk that vulnerable nuclear materials could be used to produce nuclear weapons.
In the oil and gas sector, Petrobras has been active in the development of U.S. fossil fuel resources for many years and, in 2007, it brought its first deep-water development in the Gulf of Mexico online.
And in the private sector as well, we are already seeing the benefits of commercial partnerships between our companies.
For example, WindStream, a wind turbine manufacturer based in Indiana, has closed a deal worth more than $10 million with Wind Force Energia, a Brazilian Clean Tech distributor based in Curitiba. Over the next three years, WindStream will deliver 30,000 wind turbine units to Brazil. This partnership will create jobs in the U.S. while helping to provide both on-grid and off-grid energy solutions for Brazil.
Strategic Energy Dialogue
But still, opportunities for further collaboration abound that will advance our common energy goals, enable both of our countries to grow, and enhance regional and global energy security.
That is why Presidents Rousseff and Obama announced a new Strategic Energy Dialogue earlier this year to pursue concrete initiatives that will enhance the cooperation between our two nations’ energy sectors.
In fact, this Wednesday in Brasilia I will be joining with my colleague Dr. Zimmermann, from Brazil’s Ministry of Mines and Energy, to launch the inaugural meeting of this presidential-level partnership.
The dialogue will explore ways to work together to develop safe, secure and affordable energy resources and will be an important mechanism that guides our collaboration on a wide range of energy issues.
The Strategic Energy Dialogue will focus on a number of important areas, including oil and natural gas; energy efficiency; biofuels and clean renewable energy resources; nuclear security and nuclear energy.
I’d like to take a moment to discuss each of these in some detail, and lay out some of the steps that we will be taking together to strengthen our partnership.
Oil and Natural Gas Development
As two of the global leaders in offshore drilling, there are many valuable lessons-learned and best practices that can be shared to help assure that offshore oil and gas resources in both countries, including in Brazil’s offshore pre-salt basins, are developed in a manner that is safe and environmentally responsible.
In fact, we will be hosting our first joint technical workshop this October in Rio de Janeiro, which will focus on the technologies involved in deep water drilling and the techniques that can be used to assure the protection of the environment.
Open collaboration and investment between our nations, in both the Gulf of Mexico and the pre-salt basins, will strengthen our mutual energy security and our economic ties.
Even as we continue to develop our traditional oil and gas resources, however, we must also keep investing in the development and deployment of the clean energy technologies that will ultimately help to solve the energy and climate challenge.
Biofuels, particularly, are an important area for continued cooperation. The U.S. and Brazil are the world’s two largest ethanol producers and both possess tremendous intellectual and scientific expertise.
Under an agreement launched between our two nations in 2007, we have already partnered with Brazil on a range of biofuels initiatives. We have conducted joint R&D projects and hosted scientific exchanges. We have helped identify common international standards for biofuels commoditization. And we have assisted other countries in Latin America, the Caribbean, and Africa in developing their own domestic biofuels industries.
From this ongoing collaboration, we are already seeing tangible results. For example, Amyris, a California-based biofuels company, has established a pilot biofuels facility in Campinas that is opening up a new market for the company and creating jobs here in Brazil.
And during his visit in March, Presidents Obama and Rousseff announced a new partnership that would focus specifically on aviation biofuels. We are looking forward to working with our Brazilian counterparts to get that work underway.
Wind and Solar
Both the U.S. and Brazil are also looking to diversify our electricity portfolios, so the Strategic Energy Dialogue will explore new ways to collaborate in other renewable technologies as well. For example, Brazil has tremendous hydropower resources, but there is also enormous wind and solar potential that could be tapped for both rural and urban electricity applications.
Through roundtables, working groups, reverse trade missions and more, we will be discussing opportunities for increased collaboration and economic cooperation on clean energy development.
President Obama has made clear that nuclear energy also has an important role to play in diversifying U.S. energy supplies and building a low-carbon future.
The accident last March at Fukushima, however, provided a stark reminder of what we already knew: we must only pursue nuclear energy if we can do so safely and responsibly.
Both domestically and internationally, we are continuing to study the accident to generate best practices and lessons learned. Through these efforts, including both bilateral and multilateral partnerships, we will be able to better understand the accident and learn how we can further strengthen our approach to nuclear safety.
The United States, through the Department of Energy, the Nuclear Regulatory Commission, and the Department of Commerce looking forward to working with Brazil on a range of issues related to civil nuclear energy, including how our nuclear industries can work together, what new technologies are available, and how we can develop and implement safety measures that will improve the safety and security of our nuclear facilities.
Equally importantly, we must only pursue the peaceful uses of nuclear energy in a manner that minimizes the threat that dangerous nuclear technologies or materials may fall into the wrong hands.
That is why we welcome Brazil’s contributions to the historic 2010 Nuclear Security Summit in Washington, DC and the upcoming 2012 Nuclear Security Summit in Seoul.
Ongoing discussions about how to enhance screening capabilities at shipping ports and Brazil’s willingness to consider establishing a regional center of excellence to provide training and education for nuclear security officials illustrate the country’s important leadership role in strengthening global nuclear security.
And it is why President Obama has called for a new framework for international civil nuclear cooperation, so that countries can access peaceful power without increasing the risks of proliferation. We should work on this together.
In addition to pursuing new clean energy resources, there are also tremendous opportunities for collaboration that will help both of our countries to use less energy by reducing the energy wasted in our homes, businesses, and factories.
Energy efficiency is one of the lowest cost options for reducing carbon pollution, promoting economic growth, and increasing energy independence, and for both of our countries, there is much more we can do.
As Brazil continues its robust growth – and prepares to host the World Cup and the Olympics – significant energy and cost savings can be realized by upgrading current buildings and making new buildings, factories and power plants highly efficient, right from the start.
Earlier this month, General Electric completed what it calls an energy efficiency “treasure hunt” at the Engenhão soccer stadium in Rio de Janeiro. Working with the Botafogo Soccer Club, the company was able to identify significant opportunities for energy savings that will help reduce the energy needed to power the stadium for the upcoming World Cup and Olympic Games.
We will also be joining together to host a series of workshops and initiatives that will enable us to share best practices in appliance standards, energy efficient buildings, industrial energy efficiency audits, and methods that can be used to finance these energy improvements.
Importance of the Private Sector
It is important to recognize, though, that the Strategic Energy Dialogue will not just be a partnership between the U.S. Department of Energy and the Brazilian Ministry of Mines and Energy. Other federal agencies have important roles to play in each of these areas.
For example, the Overseas Private Investment Corporation – or OPIC – has more than $500 million in potential projects in its pipeline for Brazil. These projects span a wide range of industries, from energy-efficient low-income housing, to IT data centers; from biofuels projects to sustainable forestry.
And none of the government efforts will succeed without the robust participation of the private sector. Indeed, the private sector will make or break our collective efforts to build a new, dynamic, clean energy future.
So we will be looking to you for your help in building a secure, prosperous energy future for both of our countries and the world. It is the private sector and companies like those gathered here today that will be able to bring new technologies to market and spur investments in promising projects, and that will ultimately drive the transition to a clean energy future.
President Obama and President Rousseff have called upon all of us to embrace innovation and the clean energy revolution. For the sake of our children and our children’s children, let us take up that challenge, and win the future together.