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José de Jesús Marroquín

JOSÉ DE JESÚS MARROQUÍN recently obtained a Certificate in Advance International Affairs at the Bush School of Government and Public Service. He is now an executive with a Global 500 corporation where he currently consults for global 50 energy corporations.
Formerly, Mr. Marroquin served in the United States Navy as a Commissioned Line Officer in the Persian Gulf, Adriatic, and South Pacific. He is a 2007 Who’s Who of American Business Leaders, a charter member of the International Association of Energy Economics and holder of numerous military performance and service awards.
 

Towards an Energy Grand Strategy
José de Jesús Marroquín

The economies of the United States, Europe, and Japan comprise 50% of world gross domestic product, 1 and these three economic areas utilize 50% of the world’s energy. [i] Controlling such a large percentage of total world economic output, as well as utilizing a similar percentage of the world’s energy, these three economic areas are vital to the well being of the world economy.  Yet, despite the large utilization of energy, these three areas do not have a coordinated energy strategy.   As examples in the past decade, these regions have disagreed on energy issues ranging from renewable energy supplies, to climate change, to most notably the invasion of Iraq.  Those differences have crystallized to a political and public opinion rift between the United States and the European Union.  Understandably, specific geographic and demographic considerations force the European Union to deal with global terrorism, the Middle East, and Russia differently than the United States.  While the political rift between the United States and Europe has somewhat closed since 2003, global popular approval for the United States remains at an all time low.  As we venture into an ever more complex world, these combined differences and lack of concerted direction threaten the economic vitality of the United States, Europe, and Japan, and this in turn threatens the world economy. 

Today, Iran is pursuing a nuclear program.  North Korea has developed nuclear weapons.  Pakistan is at risk of extremism from Afghanistan.  Iraq is in a precarious position slipping towards an appearing inexorable civil war that threatens to draw in other regional states. The Russian government is reorganizing along a less democratic stand than what both Europe and the United States would ideally desire.  At the same time, we are consuming increasing amounts of energy originating from smaller and smaller geographies, many with unstable political leadership.  This complex world threatens the foundations of our global economic vitality by undermining our joint energy security.  The United States, Europe, and Japan need a coordinated Energy Grand Strategy to address the complex scenarios we face today and future realities that are fast approaching.

Every aspect of the United States, European, and Japanese economies rely on a consistent uninterrupted economically stable flow of energy.  The United States Energy Information Administration (EIA) quantifies that fossil fuels comprise over 80% of the total energy utilization of The United States, Europe, and Japan.  The EIA also projects an increase in The United States, Europe, and Japan consumption from 230 quadrillion Btu to over 300 quadrillion Btu between today and 2030, with our economies still over 80% dependent on fossil fuels through 2030.  In both the US and Europe, renewables (Figure 1) comprise approximately 8% of total energy consumption today and are projected to grow 1% between now and 2030, despite the aggressive initiatives to increase renewable energy sources.  Renewable energy is projected to remain constant at 5% in Japan through 2030.  Nuclear power is projected to decrease slightly in the United States and Europe while in Japan; a slight increase is projected between today and 2030.  Figure 2 denotes a more comprehensive breakdown of energy consumption by economic region and fuel type through 2030.

World energy supplies are shrinking.  In February 2007, The United States General Accounting Office (GAO) released a comprehensive study warning that a global oil production could reach a peak without warning at any time within the next forty years and that the United States is unprepared for such an eventuality.  Domestically on the European continent, the North Seas oil fields are in steep decline at a precipitous 13% per year. [ii]  This decline has forced the United Kingdom to revert from being a net energy exporter to being a net energy importer in the span of a year.  On the other side of the Atlantic, the United States is very rich with respect to coal, but its oil production, vital for transportation, peaked in 1972 and has been declining ever since then.  One of America’s neighbors and vital producers, Mexico and it’s giant Cantarell field, has began showing strong decline at 14% per year. [iii]  Worldwide, no new fields larger than ten billion barrels have been discovered since the mid 1970s [iv].  Today, we are seeing that oil production has peaked in most areas throughout the world and that increasingly modern economies are relying on a smaller and smaller geographic area that includes the Middle East, Africa, South America and Russia, to satisfy the bulk of their energy needs.   In addition, the economies of India and China are growing at very aggressive rates between 6-9% per year, and with their giant populations, they are projected to be the world’s largest consumers of energy and largest polluters in the near future. [v]  This growth in the developing world places additional pressures on the shrinking oil producing geographies of the world.  Domestically in the United States and Europe, the Energy Information Administration (EIA) and the European Commission (EC) project that our economies will be over 80% dependent on fossil fuels for the next thirty years with the majority of the oil and natural gas components needing to be imported.  The sources of this oil and natural gas will be the Middle East, Africa, South America and Russia. [vi]  Many of these areas are politically uncertain and a number of them currently unstable.  Some of these regions are being contested by radical governments that aspire to become regional hegemonies through the development of nuclear weapons. 

Increased global demand for energy, combined with geographically shrinking oil producing areas, will both increase competition for limited energy resources and accelerate consumption.  This may precipitate global political instability, oil supply instability, or oil and gas exhaustion in more areas.  All of these eventualities indicate a supply constrained future world for fossil fuels, barring widespread mining of tar sand in Calgary and Orinoco (which experts agree would have widespread ecological impacts) or a global economic slowdown, both  undesirable scenarios for the United States, Europe, and Japan.

The United States, Europe, and Japan must work to develop a coordinated Energy Grand Strategy for managing the fossil fuels.  I submit that such a strategy should be closely coordinated between the United States, Europe, and Japan and that such a trilateral strategy should be pragmatic, balanced, and real.  It should take into account the realities of today’s complex world and both the strengths and weaknesses of the United States, Europe, and Japan.  Such an Energy Grand Strategy should include the following components:

• Current and Future Physical Energy Security Strategy

• Economic Energy Security Strategy

• Coordinated Energy Communication Plan

• Energy Alternatives & Efficiency Plan

• Pragmatic Climate Change Plan

• Cooperation between US, EU, Japan along with India / China and the major oil producers

• Long Term Energy Plan

Today, the United States is fighting in the Middle East to protect vital energy interests while the European people and governments voice strong disapproval.  Today, Europe has quietly seen an erosion of its energy security and an increasing and silent dependence on Russian gas and oil for Europe’s energy needs. [vii]  We cannot afford to be separate in matters of securing our vital energy interests.  We cannot afford to pursue simplistic and dangerous balance of power schemes with poles and counter-poles that have proven so dangerous in the past to Europe, The United States, Japan, and indeed the world.  The GAO study recommends a comprehensive energy plan for the United States.  The United States, Europe, and Japan must work together to jointly secure our energy future.  We need more than individual energy strategies -- we need to coordinate each country’s strategy into an interregional Energy Grand Strategy.   The geographically diminishing energy supplies, the projected 30% increases in consumption by the United States, Europe, and Japan by 2030, and the rapid industrialization of China and India makes time of the essence in developing and executing this Energy Grand Strategy.

Jose de Jesus Marroquin

Mr. Marroquin is an executive with a Global 500 corporation where he currently consults for global 50 energy corporations.  Formerly, Mr. Marroquin served in the United States Navy as a Commissioned Line Officer in the Persian Gulf, Adriatic, and South Pacific.  He is a 2007 Who’s Who of American Business Leaders, a charter member of the International Association of Energy Economics and holder of numerous military performance and service awards.  He lives in Atlanta and can be reached at  joe_marroquin@hotmail.com.

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