US energy diplomacy in Africa emphasizes adaptation, engagement

US government energy diplomacy efforts in Africa are making progress because they emphasize helping governments there adapt to market changes, diversify supply options, and embrace more transparent resource governance, Principal Deputy Assistant Secretary of State for Energy Resources Mary B. Warlick said.

“Globally, and specifically in Africa, our Bureau of Energy Resources is working on helping countries diversify supplies and transportation while making the transition to a low-carbon economy,” she told reporters during a Nov. 10 teleconference. “In this profoundly transformational time, there is a real appetite for harnessing alternative sources and increased efficiency to help developing countries meet their energy needs.”

Strong energy governance is particularly important for African countries with great resource potential, Warlick said. “The unique technical factors associated with natural resource extraction make this sector uniquely susceptible to corruption and mismanagement,” she said. “Governments need the skills to manage these sectors responsibly and effective.”

She said the bureau has worked since 2010 in several countries in this regard. This could not have happened at a more critical time since US production of oil and gas from tight shale formations “has absolutely redrawn the energy landscape not just domestically, but around the world,” Warlick said. “Access to US energy provides global security, particularly for many countries which depend on a single supplier.”

By exporting LNG, the US is infusing global energy markets with unprecedented supplies and transparency, Warlick said. “Dozens of tankers have left our shores for destinations around the world. The recent expansion of the Panama Canal will make it easier for US exporters to reach more global markets,” she said.

Technology improvements also have helped LNG suppliers increase consuming countries gas options, she said. “Only a few years ago, gas could only be transported by pipelines, which require multiyear financial commitments. LNG has introduced new flexibility and allowed the commodity to be traded more independently,” she said. “US exports can be very beneficial for countries around the world by increasing their options.”

Many have adopted EITI

Warlick declined to name African countries that are making the most progress in adopting more transparency and best governance practices to attract outside investments in developing their energy resources. She noted that several have adopted the Extractive Industries Transparency Initiative, voluntarily committing to publish reports on how the government manages oil, gas, and mining operations. Thirty-seven African nations are participating.

“Some two dozen sub-Saharan countries are involved. We’re working with many of them bilaterally as well as through EITI,” said Warlick. “We recognize the significant resources base in many African countries and that it’s in their interest to implement the kind of steps that will increase confidence in investors who might want to come in and help develop those resources.”

BER also is working to get countries to include civil society in resource management decisions, and keep governments from changing rules governing contracts and other agreements which can discourage future investments in energy production, she said. It also is helping many countries expand their electricity services to more customers and explore alternative and renewable sources.

“We realize many African countries will need assistance in meeting goals to help combat climate change,” Warlick said. “Fortunately, prices for renewable energy technologies are declining. This is particularly important since so many people in African countries still live without access to electricity. Since 40% of carbon emissions come from the electricity sector, helping them make the transition to renewable sources is very important.”

Many African countries also need to diversify their economies, she noted. “While petroleum sources will continue to be important, they also provide an opportunity for countries to begin phasing out fossil fuel subsidies,” Warlick said. “We have every reason to believe that many African countries can be as optimistic as the US about their energy opportunities, and the US is committed to helping them to reach that goal.”

Contact Nick Snow at nicks@pennwell.com.

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