MODERATOR: Greetings from the U.S. Department of State’s Asia Pacific Media Hub. I would like to welcome journalists to today’s on-the-record briefing with Geoffrey R. Pyatt, Assistant Secretary for Energy Resources. Assistant Secretary Pyatt will discuss U.S. energy priorities and the importance of the Indo-Pacific region in achieving shared goals of energy security and an accelerated equitable energy transition. This includes issues and progress related to key clean energy sectors, critical mineral supply chains, methane abatement, and the Inflation Reduction Act.
With that, let’s get started. Assistant Secretary Pyatt, I’ll turn it over to you for your opening remarks.
ASSISTANT SECRETARY PYATT: Great, thank you. Thanks very much to the Bangkok Media hub for putting this together, and good morning to everybody in Asia. Let me just set the stage a little bit by recalling that last December I was in Tokyo for the launch of what was then a brand-new U.S.-Japan Energy Security Dialogue. This is an effort by the Department of State and the Energy Resources Bureau to really elevate the conversation that we have with Japan, a critical Asian ally. And I was especially glad that we were able to do this last year, right at the opening of what has been a very consequential Japanese G7 presidency here.
So I’m really delighted that next week, from the 16th to 18th, I’m going to be hosting counterparts from METI and MOFA in Palo Alto, at Stanford University, at the Hoover Institution, in order to showcase the depth and breadth of the energy relationship between our two countries and the way in which we are together really at the forefront of the global energy transition and central actors in helping the whole Indo-Pacific region to achieve our goals in terms of both energy transition and energy security.
Doing this in California, at Stanford’s Hoover Institution, is unusual. But what that really reflects is both the seriousness with which we are approaching this alliance with Japan, but also the fact that the partnership between our countries is importantly impacted by the private sector as well – and the tremendous opportunities that we’re hoping to highlight when we’re out in California in terms of what’s happening with development and deployment of new energy technologies, the ways in which that’s bolstering energy security, the way in which that’s bringing benefits to the whole Indo-Pacific region, and also a chance for us to share with our Japanese colleagues some of what’s happening in the research and development sector in California, including a cutting-edge battery firm and some of the other research-based efforts that are underway in order to accelerate the energy transition.
Let me talk for just a second about why we think it’s so important to invest in this dialogue with Japan. It reflects the tremendous impact that that the Asia Pacific region more broadly is going to have on the future of the international energy system. You only need to look at the IEA data, which points to something like 40 percent of global growth in energy demand coming from that region by 2050.
So how our two countries invest now in meeting our energy needs is going to impact the world for literally decades to come. So we’ve been working very closely with Japan in a variety of fora – the Indo-Pacific quad, G7, G20, the Indo-Pacific Economic Framework. And of course we are also leveraging and taking full advantage of the fact that we are the APEC hosts this year. So in just a couple of weeks we’re all going to be back in San Francisco for that occasion.
So we want to make sure that we’re working as closely together as we possibly can to meet the challenge of climate change, but also to build the energy security of our countries and our societies.
We’ve seen very clearly in Europe, especially over the past couple of years, both the risks of dependence on energy from a single source but also the fact that the best way to build energy security and eliminate dependence on malign actors is to diversify our energy systems and accelerate our energy transitions. And we are really convinced the United States and Japan are uniquely positioned to advance that agenda. We have a very important energy security relationship with Japan, a strong shared stake in the global LNG market, and we of course welcome the continued investment by Japanese companies and the Japanese private sector in midstream projects here in the United States. And we want to encourage Japan’s continued efforts to decouple from Russian energy supplies along with others in the G7.
We both understand very clearly that the surest route to energy security is energy transition, and of course in California we’ll have an opportunity to see how rapidly that transition is unfolding here in the United States, but also some of the emerging challenges around issues like critical minerals and de-risking of clean technology supply chains.
So the role that our companies and our scientists are going to play on solar, wind, small module reactor technology – all of these are absolutely vital.
I also wanted to flag in particular the focus that we want to have in our dialogue with Japan on some emerging technologies in areas like carbon capture, utilization, and storage – CCUS – and of course clean hydrogen, where Japan has been a global leader and where the sector is accelerating very rapidly in the United States. And I’m happy to talk about that a little bit as well.
Finally, I just want to note an issue that I know we will talk about with colleagues while we’re in Palo Alto is the tremendous leadership that Japan has shown on Ukraine, an issue of global consequence where Japan, really since the first days of Russia’s brutal invasion, has been a leader and especially since last winter when the Russian attacks on Ukraine’s energy system stepped up.
Japan has been a key donor supporting our collective efforts through the G7 to ensure that Putin will fail in this effort to weaponize the winter just as he has failed on the battlefield. So I’m sure we’ll talk about that as well, and frankly, also the repercussions of the terrible events that have unfolded with the terrorist attacks against Israel over the past couple of days.
So let me stop there, and I very much look forward to the conversation. But if I can leave you with one headline from this conversation, it’s just our very strong commitment to the energy partnership, the energy alliance with Japan, the sense of ambition that we bring to this Energy Security Dialogue, and the commitment from the State Department, from the U.S. Government, to thinking ambitiously. And doing this event in this special format at one of our premier research universities on the West Coast is a way to really highlight that commitment from the U.S. side.
So thank you for the opportunity to have an exchange, and I look forward to your questions.
MODERATOR: Thank you, Assistant Secretary Pyatt. We will now turn to the question-and-answer portion of today’s briefing.
Our first question goes to Peter Landers of The Wall Street Journal, based in Tokyo, Japan. “Some countries in Asia, including Japan, are purchasing Russian LNG. What is your view of this?”
ASSISTANT SECRETARY PYATT: Peter, thank you. Thank you for the question. And let me start with two principal points. First of all, as the G7, we are committed to working in lockstep both to impose a price on Russia for its brutal invasion, but also to ensure that we deny Putin the resources that he is using in order to prosecute this terrible war against the people of Ukraine.
So we have a collective commitment as part of the G7 to the phase-out of Russian energy in all of its forms. The United States – but we also recognize that different countries will move at different paces in this regard. There – unlike for crude oil, there is no G7 sanctions regime on gas. So this is a matter of how different countries accommodate their energy mix and seek to reduce their exposure to Russia, to Russian supplies.
We’ve had a good dialogue with Japan on this issue. I expect that dialogue will continue. Frankly, this is an issue that I discuss every time I’m in Europe as well. I had the opportunity to do so just last week while I was in Spain; had a similar conversation when I was in Rome a couple of weeks before that. In all those conversations, it’s very clear to me that Russia is never again going to be viewed as a reliable energy supplier. So the question is how best to phase out our exposure to Russian supplies.
And in the case of our G7 partners in particular, we are also committed to working jointly to deny Russia future energy revenues and to target in particular investments and projects which are aimed at growing Russia’s future energy revenue. That is the reason, for instance, why you saw our last sanctions package including measures specifically targeting the Arctic LNG 2 project in Russia. Our aim there, again, is to deny Russia future energy revenue.
I’m happy to elaborate more on this, and I hope you also saw the very important announcements by the U.S. Treasury today both in terms of our advisory to ship owners and operators, but also the sanctions action that the United States has taken against two specific ships and companies which were found to be operating outside of the price cap regime. So we see that as a very, very important partnership between all of us as part of the G7.
I should note that the – I will always remember one aspect of the dialogue that I had in Tokyo last December was that we finished up on a Friday afternoon, which was the Friday when the price cap was scheduled to go into force. And we didn’t know exactly how Europe was going to manage the EU aspects of this. And I think it’s clear, almost a year later, that the price cap is working to meet its intended goals and we are committed to maintaining an intensive level of dialogue with Japan and our other G7 partners to ensure that that continues to be the case.
MODERATOR: The next question goes to Maki Iwasaki from the Jiji Press News Agency in Tokyo, Japan. “How does the Inflation Reduction Act, the IRA, impact the world EV supply chain?”
ASSISTANT SECRETARY PYATT: Well, thank you, and it’s a terrific question. And again, it’s a reminder for me of why this dialogue with Tokyo is so important and how much the international energy system has changed in the year since we first launched this dialogue in Tokyo.
You can see in the United States how the Inflation Reduction Act is supercharging our own domestic energy transition. And I want to emphasize, as I think you know, that the Inflation Reduction Act is domestic legislation in the United States. It is aimed at accelerating our own energy transition and creating incentives for faster deployment of electric vehicles, for accelerated deployment of renewable power projects, for new investments in cutting-edge technologies like clean hydrogen and carbon sequestration.
So that aspect of the Inflation Reduction Act is clearly working. I had the opportunity two weeks ago when I was – when I was in Spain, I was with Fatih Birol and the team from the IEA around the launch of their updated path to net zero report. And one of the good pieces of news in that report was that the – our energy transition is proceeding even faster than anticipated around the world, in part because of the innovations that are happening across the board.
I think we have a particularly important energy transition partnership with Japan because of the leading role that Japanese companies play on the technology and manufacturing side, including on key aspects of electric vehicle technology like batteries, and batteries’ – and power storage systems.
So we’re going to continue that conversation. I would also put a spotlight on the State Department’s Minerals Security Partnership, which is our flagship international initiative to build resilience and diversity in critical mineral and battery mineral supply chains. Japan has been an extraordinarily important partner in that effort. And you will see that we just had a meeting of MSP principals hosted by the UK, in London, where we published, among other things, an update on a number of MSP projects which are moving towards investment status and where we are working together with Japan and other G7 partners and allies to figure out how to encourage the progress on these projects faster than the markets alone would produce.
So we see Japan as a critically important partner on the electrification of transport; also because of Japan’s technology leadership. Japan, as I pointed out when I was in Tokyo last year, has been well ahead of the curve on technologies like hydrogen fuel cells and the application of that energy storage technology to transport requirements that are not optimized for traditional batteries. So especially in the United States, things like long-haul trucking, where the chemistry and the physics of an EV battery system don’t really apply.
So we’re going to continue to see investments in these areas. I think you’re going to see an even faster pace of deployment in the United States in the next few years, precisely because of the incentives that the Inflation Reduction Act has provided. But I’m also convinced, having discussed this issue with partners around the world, that the innovation that the IRA is going to stimulate and the acceleration of investment which will drive down costs as a result of the IRA, that those two factors will bring benefits not just to America and to American consumers but really to global markets as well.
MODERATOR: Next question goes to Nhu Nguyen of OEC, based in Danang, Vietnam. “What are your comments with regard to the recent request made by the Taliban’s rulers that urged Japan to invest in Afghanistan and exploit mineral and metal mines in order to compete with rival Chinese investors in this country?”
ASSISTANT SECRETARY PYATT: So I came to South Asia for the first time in my career in 1992. So I’ve been listening to various parties talking expansively about mineral opportunities in Afghanistan for a very long time. I think one has to be profoundly skeptical about those possibilities right now with the Taliban behaving as it is and with the lack of security that the Taliban regime has created.
So while there may be some long term prospects, and I certainly hope the conditions would eventually allow for the commercial development of some of Afghanistan’s reported resources, that doesn’t seem like a very smart investment to me right now.
MODERATOR: And now, Assistant Secretary Pyatt, if you have any closing remarks, I’ll turn it back over to you.
ASSISTANT SECRETARY PYATT: Sure. Well, again, thank you to everybody for the conversation and for the questions. Very much look forward to having some significant outcomes from the dialogue that we have with Japan. I think it’s very important that we’re gathering in Palo Alto in an interagency context. So I will be joined by colleagues from across the U.S. Government. And in the same way, we appreciate very much that we’ll be able to host officials – not just my senior counterparts from METI and MOFA, but from various parts of the Japanese Government and from the Japanese consulate in San Francisco.
We see, this as a globally significant relationship as we work together to tackle the climate crisis, but also to build the architecture of a new clean energy future which both of our governments are committed to. And we want to make sure – we want to do this not just for the benefit of our two countries, but for the wider region. So we will talk about how Japan and the United States are working together across the Indo-Pacific and the benefits to the whole Indo-Pacific region that we see deriving from our energy alliance with Japan. And I’m particularly proud as a native Californian that we’re doing this in my home state, which has been such a leader in the United States in terms of driving forward the pace of clean energy deployment and helping us all to think more ambitiously about what a clean energy future might look like.
So we’ll have more news for you, I’m sure, next week, and thank everybody for the conversation this evening.
MODERATOR: That brings us to the end of our time for today. Thank you for your questions and thank you to Assistant Secretary Pyatt for joining us. We will provide a transcript of this briefing to participating journalists as soon as it is available. We’d also love to hear your feedback, and you can contact us at any time at AsiaPacMedia@state.gov. Thank you again for your participation, and we hope you can join us for another briefing soon.