fueling the future - Woodrow Wilson International Center for Scholars

The Role of the U.S. Private Sector in Meeting Pakistan’s EnergyRequirementsAmerican Electric Power (AEP), Amoco, Bechtel, Besicorp, Coastal,Destec, Enron, General Electric, Houston Industries, K&M Engineering,Mission Energy, NRG Energy, Occidental, Ogden Products, SCECorp,Smith Cogeneration, and Southwestern Public Service. These companieswere primarily interested in independent power projects.However, in more recent times the situation regarding U.S. investmentin Pakistan has changed. The number of American energy companiescurrently involved in Pakistan has shrunk to a mere five or six. Themajor catalysts for this change have been competition from a strong U.S.market; the restructuring of the U.S. energy industry; and increased politicaland security concerns relating to Pakistan.U.S. Domestic Energy CompetitionA strong domestic market has captured the attention of most Americancompanies. U.S. energy needs for power, gas, oil imports, and other energyinfrastructure have soared. By 2030, as the chart below indicates,North American power investments are expected to reach $3.5 trillion.Major investment areas include nuclear power (25 plants); transmission($28 billion, 2003-2008); natural gas distribution ($8 billion per year);and oil ($622 billion, 2001-2030).There are also roughly 25 liquefied natural gas (LNG) terminalsplanned in North America, of which 5 or 6 are expected to be developedin the near future. Additionally, the 2005 Energy Policy Act has createdtax incentives in the amounts of $2.6 billion for the oil and gas sectors;$9 billion for electricity reliability; and $2.6 billion for renewables, efficiency,and conservation.Finally, many new power plants in the United States are now experiencinga shift away from using natural gas and toward using coal. Thisshift necessitates investments in replacing existing mining operationswith new mines, expanding existing mines, or simply sustaining existingmining operations.U.S. Power Industry RestructuringRestructuring in the power industry has significantly reduced the industry’sappetite for international investments. An economic downturn inthe domestic industry has led to mergers and acquisitions and a return totraditional business lines, such as investments in domestic power plants,| 151 |