Remarks as Prepared for Secretary Bodman
Thank you. I appreciate the opportunity to be here with you this afternoon.
Thank you, Rick & Ed for that generous introduction usually one person is in excess of sufficient to do the job of introducing me.
I'd also like to extend my thanks to Texas A&M University, The Chinese People's Association for Friendship with Foreign Countries, the George Bush Presidential Library Foundation and the George Bush School of Government and Public Service for their support and sponsorship of this very important conference.
The relationship between the U.S. and the People's Republic of China is critical for both our countries. As 2 of the world's biggest economies and 2 of the biggest energy consumers we face similar challenges because of the projected increase in global energy demand.
It is my belief that we can and should find ways to confront these challenges together. The U.S. and the People's Republic of China are not competing, one against the other, for increasingly scarce energy resources. The projected rise in global energy demand presents common problems for all nations. And these problems require global solutions.
We believe the answer lies in the development of energy alternatives and new technologies. We need to make America more energy efficient. We need to make America less dependent on imported energy, particularly that which comes from politically unstable areas of the world. And so, through the President's 20 in ten project to reduce projected gasoline consumption by 20 percent in ten years, through his Advanced Energy Initiative and in other ways, we are taking steps to diversify America's energy supplies and energy suppliers.
It is also true that a dramatic rise in energy demand has within it the potential to increase global tensions. In the U.S. we believe we need to project for this by taking steps to become more energy secure. President Bush asked me to make this a central focus of my tenure at the Department.
It took America a long time to create the energy problems now on its horizon; we're not going to overcome them in the blink of an eye. And this means our need for improved energy security is also a countrywide security concern. In my view, we are not the only nation that has reached this conclusion. Fortunately, I believe the U.S. and China both recognize this.
As the old saying goes, where some people see problems, others see opportunities. We both recognize that increased energy security, continued economic prosperity and countrywide security are inextricably intertwined. The need to enhance our energy security presents an opportunity for us to work together, with a common purpose, toward common goals.
At the end of the day no country not the United States, not the People's Republic of China can pursue its own energy security without, in my judgment, considering the global context. Access to secure, reliable and affordable energy sources are fundamental to both of our countries and to the world.
I think we have the responsibility to do what we can, to act globally as well as in our traditional spheres of influence, to work together to bring stability and security to the world's energy future. And when you consider the projected changes in the world energy market over the next several decades, I think it is in our best interests to do so. For example, global energy consumption will increase by close to 50 percent by 2030 with 70 percent of that growth coming from the world's emerging economies; 30 percent of that growth will come from China alone.
The demand for electricity is expected to rise by in excess of 100 percent over the next 25 years even though, today, 1.6 billion people around the world today do not have access to it. And the International Energy Agency estimates that the investment needed to meet projected demand growth is in excess of $20 trillion between now and 2030 with 60 percent of that investment coming in the power sector and 40 percent in oil and gas;
This is just one part of the global "New Energy Reality." The large Asian economies all have legitimate energy needs. But, whether they are developed, for example South Korea's and Japan's, or those like India's and China's, that are still developing those economies must come to terms with the need for greater global energy efficiency, the need for environmentally responsible energy production and the need for new energy technologies.
We are doing this in the U.S. and we welcome the opportunity to help other nations, including China, do this too.
It is my belief that the U.S. and China, because of our relative positions in the global market, can lead the world toward a shared, secure energy future that includes traditional energy sources as well as clean, renewable and alternative sources of energy.
And, because of changing world conditions, our countries must find ways to work together to confront resource nationalism, limited access and infrastructure constraints that effectively limit production to something less than what the world requires and what the world will require. And all of this must be done in a manner that accounts for global climate change and, as a result, a carbon-constrained future.
The U.S. is making a sustained strategic investment to surmount these challenges. To that end, we approach China as a potential partner, a partner that can help us resolve the global energy issues that we collectively face. And we are doing this in a number of ways, multi-lateral and bi-lateral, with, I must add, encouraging results.
China has joined with us and what are now 5 other nations Australia, India, Japan, South Korea and Canada in an Asia-Pacific Partnership on Clean Development (APP). The purpose of the APP is to allow member countries to develop and accelerate deployment of cleaner, more efficient energy technologies to address pollution reduction, energy security, and climate change concerns in ways that reduce poverty and promote economic development.
At the most recent APP meeting, which occurred last week, the member nations endorsed task force work projects with 110 plans and approved 18 new flagship plans that exemplify the partnership's focus and commitment.
In part because of the APP, we've seen U.S. companies take the lead in bringing combined heat and power and distributed generation technologies to China. Through the partnership, Solar Turbines producing 35 megawatts of clean energy were installed in China's Shanxi province in less than a year's time. This represents some progress, but we must do more.
And we are cooperating on securing the expansion of clean, safe nuclear power throughout Asia and the world. Expanding the availability of nuclear power is a critical part of any attempt to meet projected global demands for electricity in an environmentally responsible way.
As one positive sign, the Chinese opted last December to buy several new nuclear reactors from Westinghouse. This is, I believe, a portent that our new strategic relationship on energy is of benefit to both countries. China is making nuclear power a critical part of its energy future; it will be a major player in the world civilian nuclear power market. We, the United States, are ready to assist them with our technologies and our experts to help bring this about.
That, in my judgment, is a good deal for both countries. But it is only part of the total picture. Again, there is much more to do.
Through President Bush's Global Nuclear Energy Partnership (GNEP) we have launched an international framework for sharing nuclear power with the developing world. This framework will allow for a greater global reliance on civilian nuclear power to produce the electricity needed to meet the expected growth in demand. And it does it in a way that safeguards against proliferation of materials and deals responsibly with spent fuel.
China, along with Japan, France, Russia and the United States, is a founding member of the GNEP partnership.
GNEP represents the future of global nuclear power cooperation. At the 2nd GNEP ministerial in Vienna, Austria, we tripled the size of the partnership from the original 5 to 16. The partners were joined by 19 observing nations and we expect several of those countries to join the partnership soon.
The need to find ways to share nuclear power with the rest of the world in a responsible way means we must address the issue of North Korea's nuclear program. China is working with us here as well.
China has also joined us in the International Partnership for the Hydrogen Economy, the Carbon Sequestration Leadership Forum, the GenIV International Forum, and the International Thermonuclear Experimental Reactor or ITER. All of these efforts are intended to help us find ways to solve the shared problems our combined energy future presents.
Equally important are our bi-lateral efforts, including the U.S.-China Energy Policy Dialogue, established in May 2004, and the Strategic Economic Dialogue, which began in December 2006. These efforts have allowed us to strengthen and deepen our energy relationship.
There is also the U.S.-China Oil and Gas Industry Forum, begun in 1998, which serves to facilitate opportunities for government and industry leaders from both our countries to talk about our oil and gas-related energy needs.
And these efforts are, as I said a moment ago, bearing fruit. Last year I went to Asia for five-party talks with the world's biggest energy consumers: Japan, South Korea, India and China. One of the items up for discussion was the need for each nation to establish its own Strategic Petroleum Reserve to protect against supply disruptions. And, partially because of these talks, I believe China has embraced this idea and is now moving in the right direction and we will continue to support them in this effort.
We've also found a way to cooperate on energy issues related to the 2008 Beijing Summer Olympic Games. In January 2004 our 2 countries signed a protocol to promote the use of U.S. clean energy technologies to enhance Beijing's environmental requirements by the time the games begin. This includes the development of a renewable hydrogen facility that will provide fuel for a fleet of 5 hydrogen natural gas buses that will be cost-shared by the D.O.E., U.S. industry and the Chinese government.
Our 2 countries have established a working framework for future cooperation, but there is still a lot left to discuss, both where energy issues are concerned and on environmental issues related to energy. I believe we are well on our way to the strategic partnership that, in my judgment, is in our best interests. But there is still much to be done. We must find ways to work together to confront issues like resource nationalism, pollution and market transparency that I mentioned earlier.
As far as the latter in concerned though, I do want to note that China is one of 96 countries participating in the International Energy Forum's Joint Oil Data Initiative (JODI). We welcome their membership in this effort to create a more transparent world oil market by providing, comprehensive oil data to the international JODI database.
But we must continually be mindful of the energy-related environmental challenges ahead.
As China's economy continues to grow, so will its energy consumption. China is projected to use eleven percent more energy than the U.S. by 2030 making it the world's single biggest energy consumer. That same year, China's CO2 emissions are projected to account for 26 percent of the world's total and will exceed those of the United States' by 41 percent.
If China wishes to demonstrate its responsiveness to world concerns, this would be a good place to do it and the U.S. is ready and willing to assist in providing access to clean energy technologies. Indeed we have the opportunity to share expertise, to share science and to share in our commitment to finding ways to develop energy solutions that allow for economic growth with minimal environmental damage. We have the opportunity for China to partner with us, for example, in a push for a worldwide reduction or removal of tariffs on clean energy technologies through the World Trade Organization and the Doha round of trade talks.
We have much to do and many challenges ahead of us. The areas where our 2 countries are now working together put us on the right road to a stronger partnership; a partnership that will help us overcome our common energy obstacles and achieve energy security. But in excess of that, I believe it will take us to a brighter future, for our countries and for our children. And that, I believe, is our most important goal.
Thank you.
