Earl Anthony Wayne Interview: Conversations with History; Institute of International Studies, UC Berkeley

U.S. Economic Policy after 9/11: Conversation with Earl Anthony Wayne, Assistant Secretary for Economic and Business Affairs, U.S. Department of State; December 13, 2004, by Harry Kreisler

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Oil and Energy Policy

Let's talk a little about energy, because you mentioned this earlier. It seems that there's a new importance in assisting the finding and building of the infrastructure for new sources of oil, in addition to the challenges in the Persian Gulf as a result of the Iraq war. How does security and economic policy come together in this energy piece of your portfolio in trying to find new sources of oil in places like the Caspian Sea or South Asia -- not only finding the oil but then putting in place the package that would make its extraction and delivery possible?

There are several different aspects to that. One I might mention to begin with is being able to respond to an energy emergency. In that sense, we work in an international organization called the International Energy Agency. One of the things we do there, with other consuming countries around the world, is to make sure that everybody has emergency energy stocks, so that if there happened to be a crisis -- and the crisis could be because of natural events, or violence, or something else -- countries have the ability to weather those emergency storms. As you know, the United States has been building up its emergency oil stocks, but so have other countries. We've been encouraging new consumers, like China, to develop the same kind of stocks, and to have that ability to weather those short-term emergencies.

Secondly, we have put a great deal of effort into areas like the Caspian Basin. We have worked very hard not to preempt the decision of private-sector oil companies, but to help foster dialogue between the governments of the region for their own mutual benefit, to be able to deal with all those cross-border issues that make pipelines, whether they be natural gas or oil pipelines, possible. We've had a special high representative for a number of years, different ones. In fact, Beth Jones, whom you interviewed a couple of years ago, used to do that. We have another ambassador now who does it. The idea is to facilitate the agreement between companies and governments to help make it possible for those petroleum reserves to leave that region.

Similarly, in other corners of the world [such as] West Africa -- much development going on there -- or Latin America, we try to encourage the governments to take steps that will improve the investment climate in those countries. We're arguing that it's in their interest to do that, too, because it will bring the potential of much more wealth to those countries.

An interesting other angle that we have taken is to work to find ways to increase transparency and thus limit the opportunities for corruption in those countries, so that when money arrives from a company to a government, it actually gets from that government to specific projects to help the people in the country. One of the main criticisms, not only from Western NGOs but in those countries, is, "We aren't getting the results of all this wealth. Where's it going?" We realized that in the long run, that's not conducive to a good supply of energy or stability in that part of the world. So we're working hard on that too.

One gets the sense that a part of the government is moving along very rationally, trying to adopt procedures that would combine issues like economic development with equity and stability and, on the other hand, getting energy reserves. But the world is a lot messier. For example, in the Caspian Basin and South Asia you confront ethnic conflict which crosses borders, you confront human rights issues. So you're dealing with a government that you want oil from, but there may be human [costs].

I'm not asking you to settle all this, which is a lifetime's work, but I'm curious: building on your background, the ideas that matter to you, how do you sort all this out? Where does hope lie, and how do you continue moving the process along? In the long term, this is the right way to go; but in the short-term, there are a lot of contradictions in what you're doing. Politics is about making choices, and the choices and the goals conflict, and you have to weigh which is more important. Talk about that a little and how you sort that out as a diplomat.

You're exactly right, that there are a lot of problems along the way, a lot of fires, and a lot of frustration that sometimes we think we've got something worked out and then the government will take your decision, and "Oh, no, we want to revisit that." Or they'll do something for other reasons that, as you say, affect the human rights situation or affect the stability or the relations with their neighbors.

Part of the challenge is keeping that long-term vision in mind and trying to be creative in finding ways to deal with the best of whatever you're facing at that moment. Sometimes we get frustrated and just say, "Okay, we have to wait." Not that we're frustrated, but we can't move it forward for a month or two, or we'll just have to wait until things cool off. Other times, we're able to come at it from other angles, to get other partners to work with us to persuade people to move forward. Sometimes it takes getting all the people to talk to each other, and to sit down and calmly discuss things -- it usually doesn't mean that we're in the room, but it might mean we've talked to both sides and tried to coax them to get together.

You're right, it often calls on all the wisdom that we can possibly pull together from our embassies overseas, from our colleagues in other parts of the State Department and other agencies, revising the tactical plan that we had. "Okay, that won't work so what can we now do to go forward?'

I don't mean to give the sense that this is all a smooth flow forward. There are many fits and starts along the way. But in part, the work of diplomacy is to when you run into those pits, how do you get them to start again?

Next page: Conclusion

See also the Elizabeth Jones interview, U.S. Foreign Policy: Continuity and Change after 9/11 (2002)

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