Sec. 506. Caribbean Energy Initiative
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/bill/117/s/1201/is/section-506·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Congress makes the following findings: The countries of the Caribbean are heavily reliant upon imported oil to provide for approximately 90 percent of their energy production. The level of dependence is even higher including— Jamaica, which relies on oil for 95.9 percent of its electricity; Barbados, which relies on oil for 96 percent of its electricity; The Virgin Islands, which relies on oil for nearly 100 percent of its electricity; and St. Lucia, which relies on oil for 100 percent of its electricity.
Overreliance on imported fossil fuels has had a detrimental effect on economic development, growth, and competitiveness in the Caribbean. Since 1970, more than 80 percent of Caribbean coral reefs have been lost due to coastal development and pollution. Soot particulates and climate change caused by burning fossil fuels have seriously damaged coral reefs, which are a significant source of tourism dollars, fishing, biodiversity, and natural beauty. Air pollution caused by burning oil for electricity— has serious health impacts in the form of higher rates of asthma and other lung ailments; and can also exacerbate climate change.
The Caribbean region is particularly vulnerable to sea level rise and stronger storms. Between 2005 and 2018, the dependence of the countries of the Caribbean on oil was perpetuated by the Venezuelan-led Petrocaribe oil alliance, which— offered preferential terms for oil sales; and supplies some countries with up to 40 percent of their energy production needs. The ongoing domestic economic crisis and political turmoil in Venezuela has forced the Government of Venezuela to retract its commitments to the Petrocaribe oil alliance and step away as a regional power.
Only Cuba still receives preferential Petrocaribe pricing on fuel exports from Venezuela, while other Petrocaribe member countries are experiencing a destabilized flow of oil. China has spent more than $244,000,000,000 on energy projects worldwide since 2000, 25 percent of which was spent in Latin America and the Caribbean. Although the majority of this spending was for oil, gas, and coal, China has also been the largest investor in clean energy globally for almost a decade. The World Bank estimates that the Caribbean will need $12,000,000,000 in power investments through 2035.
Renewable energy technology costs have decreased dramatically in recent years, offering a more viable economic alternative for energy production. Solar energy prices have fallen by 80 percent since 2008, causing significant market growth, and according to data released by the International Renewable Energy Agency, 1/3 of global power capacity is based in renewable energy. In 2016, the International Monetary Fund estimated that transportation accounted for 36 percent of the total primary energy consumed in the Caribbean subregion.
According to the United Nations Environment Programme, Latin America and the Caribbean could achieve annual savings of $621,000,000,000 and a reduction of 1,100,000,000 tons of CO 2 by 2050 if the region’s energy and transport sectors reach net zero emissions. The Caribbean has an abundance of onshore and offshore resources needed for renewable energy, including sun, wind, geothermal, and some hydropower production capacity. The United States Government is deeply engaged in providing technical and policy assistance to countries of the Caribbean on energy issues through— the Energy and Climate Partnership of the Americas;
Connecting the Americas 2022; and bilateral assistance programs. On February 19, 2014, at the North American Leaders’ Summit, President Barack Obama, Prime Minister Stephen Harper of Canada, and President Enrique Peña Nieto of Mexico reaffirmed their commitment to bring affordable, reliable, and increasingly renewable power to the Caribbean, while opening wider markets for clean energy and green technology. On June 19, 2015, President Barack Obama announced the Caribbean Energy Security Initiative, which would partner with individual countries— to transform its energy sector; to work to increase access to finance, good governance, and diversification; and to maximize the impact of existing donor effects.
On May 4, 2016, at the United States-Caribbean-Central American Energy Summit, the energy security task force formally launched the Caribbean Sustainable Energy Roadmap and Strategy (C–SERMS) as a mechanism to manage regional coordination and action on energy security and agreed to expand the regional market and transmission system. The United States has an important opportunity— to deepen this engagement; to work as a partner with Caribbean countries on a more regional and coordinated basis; to help ease the region’s dependence on imported oil; and to promote affordable alternative sources of energy.
In this section: The term Caribbean countries means countries in the Caribbean region, but does not including Cuba or Venezuela. The term Caribbean governments means the national governments of the Caribbean countries. It is the policy of the United States to help Caribbean countries— achieve greater energy security and improve domestic energy resource mobilization; lower their dependence on imported fuels; eliminate the use of diesel, heavy fuel oil, other petroleum products, and coal for the generation of electricity; increase production of renewable energy; and meet the greenhouse gas mitigation goals of their national determined contributions to the Paris Agreement.
Not later than 120 days after the date of the enactment of this Act, the Secretary of State shall submit a multi-year strategy to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives that describes how the Department of State will promote regional cooperation with Caribbean countries— to lower dependence on imported fuels, grow domestic clean energy production in the region, strengthen regional energy security, and lower energy sector greenhouse gas emissions; to decrease dependence on oil in the transportation sector; to increase energy efficiency, energy conservation, and investment in alternatives to imported fuels; to improve grid reliability and modernize electricity transmission networks; to advance deployment of innovative solutions to expand community and individuals’ access to electricity; to help reform energy markets to encourage good regulatory governance and to promote a climate of private sector investment; and to mitigate greenhouse gas emissions from the energy and transportation sector.
The strategy required under subsection
(a)shall include— a thorough review and inventory of United States Government activities that are being carried out bilaterally, regionally, and in coordination with multilateral institutions— to promote energy and climate security in the Caribbean region; and to reduce the region’s reliance on oil for electricity generation; opportunities for marshaling regional cooperation— to overcome market barriers resulting from the small size of Caribbean energy markets; to address the high transportation and infrastructure costs faced by Caribbean countries; to ensure greater donor coordination between governments, multilateral institutions, multilateral banks, and private investors; and to expand regional financing opportunities to allow for lower cost energy entrepreneurship; measures to ensure that each Caribbean government has— an independent utility regulator or equivalent; affordable access by third-party investors to its electrical grid with minimal regulatory interference; effective energy efficiency and energy conservation; programs to address technical and nontechnical issues; a plan to eliminate major market distortions; cost-reflective tariffs; and no tariffs or other taxes on clean energy solutions; and recommendations for how United States policy, technical, and economic assistance can be used in the Caribbean region— to advance renewable energy development and the incorporation of renewable technologies into existing energy grids and the development and deployment of micro-grids where appropriate and feasible to boost energy security and reliability, particularly to underserved communities; to increase the generation of clean energy sufficiently to replace and allow for the retirement of obsolete fossil fuel energy generation units in Caribbean countries; to create regional financing opportunities to allow for lower cost energy entrepreneurship; to deploy transaction advisors in the region to help attract private investment and break down any market or regulatory barriers; and to establish a mechanism for each host government to have access to independent legal advice— to speed the development of energy-related contracts; and to better protect the interests of Caribbean governments and citizens. In devising the strategy under this subsection, the Secretary of State shall work with the Secretary of Energy and shall consult with— the Secretary of the Interior; the Secretary of Commerce; the Secretary of the Treasury; the Board of Directors of the Export-Import Bank of the United States; the Board of Directors of the Development Finance Corporation; the Administrator of the United States Agency for International Development; the Caribbean governments; the Inter-American Development Bank; the World Bank Group; and the Caribbean Electric Utility Services Corporation.