04/14/2012 02:56 pm ET Updated Jun 14, 2012

It's Time to Tango: The Case for a Reinvigorated Western Hemisphere Energy Strategy

Prompted by high gasoline prices, energy policy has become a major battleground issue in the 2012 elections. As President Obama meets with other Western Hemisphere leaders at the Summit of the Americas in Cartagena, Colombia this weekend, there is an opportunity to highlight the enormous potential of a reinvigorated Western Hemisphere energy strategy. A fulsome approach to developing the Western Hemisphere's energy potential would have a profoundly positive impact on America's energy security.

As the second largest energy producer after the Middle East, the Western Hemisphere has become an increasingly important source of U.S. energy supply. In fact, three of the top four oil suppliers to the U.S. are from the Western Hemisphere (Canada, Mexico and Venezuela). The Western Hemisphere also has massive potential for expanded energy production. Thanks in large part to new technologies, the Western Hemisphere has an ample available supply of unconventional oil and natural gas. This energy supply extends beyond traditional carbon-based fuels. Latin America in particular has vast renewable energy potential in biofuels, wind, solar, and hydro.

The Obama Administration understands the importance of the Western Hemisphere's energy potential to U.S. energy security. At the last Summit of the Americas in 2009, the President called for a "new partnership on energy" and launched the Energy and Climate Partnership of the Americas (ECPA). The ECPA aims to foster partnerships across the hemisphere to achieve low carbon economic growth and development. In addition, the ECPA has launched at least 25 new initiatives ranging from a renewable energy research and development center in Chile to a global shale-gas initiative to explore the potential of South America's unconventional gas resources. The administration has also deepened links with Brazil, Latin America's most promising energy producer, through a Strategic Energy Dialogue (SED) that aims to increase energy sector cooperation between the two countries. The SED has focused on exploring bilateral partnerships across diversified energy sources including biofuels, oil and gas, renewable energy, efficiency, and nuclear energy.

While the U.S. has engaged in these multilateral and bilateral initiatives, countries including China and Russia have aggressively invested billions of dollars in Latin America's energy industries. For example, in early 2011, Sinopec, China's largest oil refiner, formalized a $7 billion contract to buy a 40 percent stake in the Brazilian operations of Repsol, Spain's largest energy company. Sinopec's main rival, the China National Offshore Oil Corporation, is now preparing a major offer to take over Repsol's stake in YPT, Argentina's main oil and gas company. Earlier this year, Russia and Venezuela announced a joint venture between Venezuela's state-owned oil company Petroleos de Venezuela and Russia's Gazprombank, a subsidiary of Russian energy giant Gazprom. As part of the deal, Gazprombank took 40 percent ownership of a joint venture that seeks to "strengthen energy operations" in oil-rich eastern Venezuela. These investments, among many others, demonstrate that these countries view Latin America as an important region for their energy security.

For the U.S. to protect its energy security in the Western Hemisphere, it will need to devise a bold public-private strategy to leverage its massive energy consumption market, and its proximate location, into a long term competitive advantage. In addition to deepening existing multilateral and bilateral initiatives, the U.S. can strengthen and expand bilateral energy arrangements across Latin America. According to a 2007 United Nations study, Latin America will require $1.3 trillion in energy sector investment by 2030. In a time of record profits for U.S. energy companies, this presents an opportunity for the U.S. to leverage its ample supply of risk capital, its technological expertise, research institutions, and national laboratories to develop strategic partnerships that invest in Latin America's energy potential. This new energy investment can provide perhaps the most significant engine of growth and development in a region that has continued to defy skeptics by prospering while much of the Western world has faltered in recent years.

Ultimately, any initiative for increased economic ties with Latin America will need to come from the United States. While other issues, including poverty and inequality, public security, and migration will continue to be important themes in U.S.-Latin America relations, America's immediate energy security imperatives motivate serious engagement today. The Western Hemisphere's vast energy potential is on the dance floor. Does the U.S. care to tango?