Two years ago, U.S. Secretary of Energy Rick Perry attended Africa Oil Week (www.Africa-OilWeek.com) to promote his country’s policies for energy on the continent. This the U.S. Assistant Secretary for Fossil Energy, Steven Winberg, attended to highlight the importance the United States places on fostering relationships with the continent.
The first question on everyone’s lips was how the recent announcement of Secretary Perry’s resignation would affect the U.S. outlook towards Africa. “If you are asking if there is going to be an Africa policy change, the answer is clearly no,” he says. “As you know, Deputy Secretary Brouillette has been nominated by the President, and he will go through the confirmation hearing. But I can tell you that the Secretary and the Deputy Secretary are in lockstep, as is the President, with policies such as Prosper Africa and Power Africa. The objective for the United States is not changing as it relates to Africa.”
Supporting U.S. Businesses in Africa
Winberg points to the fact that Prosper Africa is a cross-government initiative that involved the Department of Energy and the State Department. It is designed to support United States business and energy activities in Africa. “There are 54 countries in the continent of Africa, and we think that there are great opportunities for the United States to bring our technology and our capital to bear, especially in the energy space. I think we also have the opportunity to counter malign actor influence. And finally, and probably most importantly, Prosper Africa provides opportunities for sustainable economic development and economic development with transparency.”
“That is what the United States brings to Africa, and we are pleased to be here. We are pleased to be at this conference to help develop relationships and help develop understanding between the United States and the 54 countries in Africa.”
The strategy is for the U.S. government to work with U.S. companies that want to do business in Africa and to work with countries in Africa that want to do business with U.S. companies. “We can indeed shine a bright light on these opportunities,” Winberg adds. “We can also assist African enterprise and African countries by introducing them to US companies, and vice versa.”
“We also have opportunities for African countries to come over to the United States and work with some of our departments so they can understand how we do business and how we create a transparent business climate. We have 17 National Labs. And we are very open about what those labs do. Numerous countries send representatives to visit those labs so that they can understand the technologies that we are working on and how those technologies might be applicable to their situation. We are going to continue that activity so that we can become a long-term partner with African nations.”
The Global Role for U.S. Gas
Aside from supporting the work of U.S. businesses in Africa, Winberg is clear that he sees Africa as a prime market for the surplus of gas that the U.S. shale revolution is delivering. “I do believe there is going to be increased oil and natural gas production in Africa, but there is an interim period when African countries may want to avail themselves of our LNG exports,” he explains.
At present, the United States has the capacity to export seven billion cubic feet per day, which will grow to ten billion cubic feet per day by 2020. “In operation or under construction, we will have 15.5 billion cubic feet per day today coming online over the next several years. The Department of Energy has authorised about 35 billion cubic feet a day,” Winberg adds. “There is a lot of headroom there for countries that want to use LNG imports in the interim period while they are developing their own natural gas production.”
According to Winberg, the U.S. shale surplus offers another benefit: stabilising the market and providing security of supply. “About two and a half months ago, the Straits of Hormuz saw some hostile activity,” he says. “If you watched the Brent Crude oil price, it barely moved in and around that hostility.”
“Then on September 14, the Iranians attacked Saudi Arabia – the attack initially took out half of their production. That happened on Saturday; and on Monday when the European markets closed Brent crude was up 9 dollars and within two weeks Brent closed below pre-attack levels. That speaks volumes about the robust nature of this oil and gas market. If that attack had occurred a decade ago, we would have seen a fly up in oil prices, and I think they would have stayed up.”
“The fact that we continue to increase the level of oil that we're producing in the United States and will be a net exporter of energy next year, reduces the impact that those types of attacks can have. And if it's not as impactful as those perpetrators want it to be, then there's not a lot of value. And I think that's the real message here.”
Fighting Climate Change outside the Paris Climate Accord
Much has been made about the United States stepping away from the Paris Climate Accord, but Winberg is clear that does not mean that the U.S. is not serious about reducing carbon emissions. “The answer to reducing greenhouse gas emissions, whether it's methane or CO2, is through technology development,” he explains. “The International Energy Agency (IEA) understands that and talks a lot about the need for carbon capture technology.”
“If you do the math, you know that without technologies such as carbon capture, utilization and storage, none of the countries can meet any of the goals that they aspire to meet. It all comes down to technology. One thing that President Trump and the Administration are adamant about is having an “all of the above” strategy in the United States. I know there are countries that want to eliminate fossil fuel from their energy mix. We do not think that is a wise decision. We think it is wise to develop technology to reduce the environmental impact of those fossil fuels, whether coal, oil or natural gas.”
“Under just about every forecast, and IEA is probably the most influential, 80 per cent of our energy needs globally will be coming from fossil fuels for the next 30 to 40 years. So, eliminating fossil energy is not practical. What is practical, is developing technologies to reduce greenhouse gas emissions and create more efficient, as well as designing a less environmentally impactful use of energy.”
Working with Africa to Deliver Growth
As for foreign policy in Africa, Winberg is clear that the Trump Administration believes that it is up to African countries to resolve whatever internal issues they have. “It is not our role to tell countries what to do,” he concludes. “However, what we can do and what we offer is an opportunity to talk to us about policies that will attract capital and policies that will attract technological investments. We will continue doing that for countries that want to develop their natural resources.”
“That has been a focus of this Administration. I said earlier that the Trump administration absolutely believes in the “all of the above” energy strategy. We want to export our technology and our natural resources. We will do everything we can to work with countries that want to avail themselves of what we have to offer, including working with them on various policy issues that they need to resolve to attract capital and attract technology.”
Distributed by APO Group on behalf of Africa Oil Week.
About Africa Oil Week:
Africa Oil Week (www.Africa-OilWeek.com) is the leading oil and gas event for the continent, with over 1,800 key executives attending from around the world to broker new deals. The global E&P community (government, NOCs, international oil companies, independents, investors and service providers) is brought together in Cape Town each November. This unique event is a hub for deal-making and building networks with senior decision-makers.