The Foreign Service Journal, February 2009

F E B R U A R Y 2 0 0 9 / F O R E I G N S E R V I C E J O U R N A L 21 F O C U S O N G L O B A L E N E R G Y C APITALIZING ON A S TRATEGIC O PPORTUNITY ver the last several years the global energy landscape has changed. For the first time in history, new demand for energy coming from developing countries has surpassed demand growth in the developed world. New supplies of energy are harder to access and develop due to increasing demand, tighter state control over resource development, the increased cost of basic ma- terials, price volatility and frozen capital markets. Con- ventional energy resources like oil and natural gas come from a handful of energy-producing regions located out- side the developed world. The United States is no longer the only major energy consumer in terms of overall size or growth potential. Energy markets are being shaped by new producers, shifting consumer priorities and innova- tive ways of doing business. With few major exceptions, the countries with the largest demand growth are not the ones with vast energy supplies. As a consequence, increased energy trade and massive new investment is necessary to produce and de- liver energy to the people who need it. Despite the high- price environment of the last several years and the market’s extreme volatility of late, it does not appear that adequate investment is taking place to meet future demand. All of this leads to greater anxiety over the security and affordability of future energy supplies. To make matters worse, the latest science indicates that current patterns of energy production and use are irrevocably changing the global environment and threatening the sustainability of vital natural resources. The strategic imperative to trans- form the current energy system goes far beyond the tradi- tional concerns. The challenges surrounding our collective energy fu- ture are linked to our economic and environmental well- being, as well as our national security. Absent a major strategic shift in policy, U.S. influence in global markets B Y TAKING THE LEAD TO ADDRESS CLIMATE CHANGE , THE U.S. CAN SHIFT GLOBAL ECONOMIC AND ENVIRONMENTAL DYNAMICS . B Y S ARAH L ADISLAW O Sarah Ladislaw is a fellow in the Energy and National Se- curity Program at the Center for Strategic and Interna- tional Studies, where she concentrates on the geopolitical implications of energy production and use, energy security, energy technology, sustainable development and climate change. She is actively engaged in a joint project with the World Resources Institute on balancing energy security and climate change priorities, and another project on climate change, security and earth observation. She has also been involved with CSIS’s work on the geopolitics portion of the National Petroleum Council study and with the Smart Power Commission, focusing on energy security and cli- mate issues. Before joining CSIS, Ladislaw worked in the Office of Policy and International Affairs at the U.S. De- partment of Energy. This piece is adapted from several pre- vious papers.