Remarks by Steven White, Deputy Chief of Mission at USAID SARI/Energy, Global Energy Markets Trade Program, The Sheraton Hotel, Saket, New Delhi

February 25, 2008

“Deputy Chief of Mission, Steven White, gives a speech at USAID sponsored conference on global energy markets – particularly energy trade in South Asia.” Photo Credit: USAID/India

Good Morning.

On behalf of the U.S. Mission in India, I am pleased to welcome all of you to New Delhi for this important conference on global energy markets, and particularly energy trade in South Asia. I would like to extend a warm welcome to the distinguished guests from the South Asian countries and from the United States. I would also like to acknowledge the U.S. Agency for International Development, or USAID, for sponsoring this event through the South Asia Regional Initiative for Energy. This gathering is a valuable opportunity to bring together representatives from the region to discuss international energy trade and cross-border arrangements for energy service. The United States hopes that this event will help promote increased energy trading and greater energy security for South Asia.

Today I would like to speak to you about the importance of regional cooperation and energy security. All South Asian countries stand to benefit by expanding energy markets within their country or globally. The United States stands ready to support efforts to boost energy markets, increase investment and strengthen trade linkages within South Asia.

The U.S. partnership with South Asia has strengthened over the last several years. The U.S. believes that regional cooperation and integration are key elements of long-term energy security in this region. Energy security, the ability to secure sufficient energy supplies at a reasonable cost to the economy and with minimal social impact, has become a policy imperative throughout the region. The United States Government supports this policy and has been a willing partner in these efforts because we are confident that it will benefit the economy and security of all South Asian countries. It will create stronger partners and bring member countries closer together.

Our government places great importance on this part of the world as indicated by our increased initiatives and investments in the region. Here in India we support Indian partners to increase viability in the power sector, conserve resources, and promote clean technologies and renewable energy. These efforts are key building blocks of the U.S.-India Energy Dialogue, and also further the objectives of the Asia-Pacific Partnership for Clean Development, of which India is a member. USAID’s Regional Development Mission for Asia is implementing clean energy initiatives under the program in China, which is also an APP member country. In Afghanistan, the US is providing major support for the reconstruction and expansion of the Afghan power sector. Finally, the USAID South Asia Regional Initiative for Energy, known as SARI/Energy, has sponsored this event to raise the awareness of Global Energy Markets Trade and to encourage collaborative efforts among your countries to increase energy security.

The USAID SARI/Energy program is assisting the nations of South Asia in meeting their energy security needs through increased trade, investment and access to clean energy. As well as institutional and regulatory strengthening in countries throughout the region, the program has also helped to bring several cross-border deals closer to fruition.

The partnerships the United States has forged in the region are based on shared interests in building stable democracies, combating terrorism and the proliferation of weapons of mass destruction, and expanding free markets. Activities to expand economic freedom and prosperity such as ensuring plentiful sources of clean, safe and reliable energy are essential to meeting these goals.

Transparent energy markets coupled with the opening of cross border trade have provided direct benefits to many national economies. For example, the U.S. received 34% of its imported crude petroleum from its neighbors, Canada and Mexico, in 2007. And the United States imported 3,555 billion cubic feet of natural gas from Canada last year. Strong economic linkages across borders also help build political stability.

Power shortages are a persistent and leading constraint to economic growth and development in South Asia. Yet, the actual energy resources of South Asia are significant and possibly sufficient to meet rising demand. Energy sources differ significantly among South Asian countries. Each source of energy has different costs for extraction, seasonal availability and impact on the economy. This makes a combined, diversified regional approach to resource-use critical to energy security. Cross-border interconnections to trade energy are necessary to accomplish this.

South Asia lags behind other economic regions of the world in energy trade, with only three of the eight countries sharing any energy infrastructure. Worldwide, integration of electricity systems reduces average generation investment needs. With the planned expansion of South Asia’s power sector, this would amount to significant savings 2020.

Currently constraints to proper market and pricing signals continue to hamper progress in the energy sector in South Asia. Interconnections among neighboring countries offer the opportunity to diversify sources of energy supply, while access to energy markets can in turn drive accelerated economic growth in South Asian countries. Continued efforts on clean and efficient energy access remain essential to sustainable development in the region.

Electricity trade increases sector revenues and avoids generation costs. Estimates show that the South Asian region could earn additional revenue, increase security of regional energy supply, and optimize natural resources within the next five to ten years if the projects currently under discussion are realized.

The discussion over the next five days is highly ambitious and commendable. I am pleased to see key international leaders are here to review the economic benefits and advantages that improved market structures and commercial practices present to South Asia.

I wish you a successful conference. I am sure you will have many provocative discussions that will inform energy market development for each of the nations of South Asia. We are pleased to be associated with this event and hope that your participation will raise awareness of the importance of regional energy trade, and the impacts of world energy markets on this dynamic region.

Thank You.