Remarks at the U.S. Gas Infrastructure Exports Initiative Launch Event

Remarks
John McCarrick, Deputy Assistant Secretary, Bureau of Energy Resources
Washington, DC
November 17, 2017


As Prepared for Delivery:

First I would like to thank Thomas Hardy and the U.S. Trade and Development Agency (USTDA), Karen Harbert and the U.S. Chamber of Commerce Institute for 21st Century Energy, Fred Hutchinson and LNG Allies, and Jay Copan and the 27th World Gas Conference Coordination Team. 

We are here today because the U.S. oil and gas landscape has rapidly evolved over the past decade. In ten years the United States has nearly doubled its oil production; increased natural gas production by 40 percent; and transformed from being a natural gas importer to a natural gas exporter, including in liquefied natural gas (LNG).

According to the International Energy Agency’s (IEA) 2017 World Energy Outlook, released this week, the resilience of shale gas and tight oil in the United States cements the U.S. position as the biggest oil and gas producer in the world even at lower prices. Today we are producing 775 billion cubic meters (bcm) of natural gas annually.

According to the U.S. Energy Information Association (EIA), U.S. natural gas production is on its way to nearly 1 trillion cubic meters a year as soon as 2025. The United States’ tremendous energy resource allows us to serve as a faithful and dependable partner in the export and sale of our high-quality and low-cost energy resources, technologies, and services.

Indeed, in less than two years, more than 200 cargoes have left Sabine Pass reaching more than two dozen countries – with a remarkably global footprint. This has occurred with only one-fifth of U.S. liquefaction in production.

From a U.S. foreign policy perspective, we see enormous opportunities stemming from the U.S. contributions to a rapidly evolving—and globalizing—LNG market. Well-functioning competitive and efficient gas markets strengthen global energy security, foster environmental stewardship, and the economic and commercial interests of the U.S. and our allies and partners.

The bottom line is that the strength of the U.S. energy sector impacts how we approach foreign affairs.

When it comes to energy, the Trump Administration’s foreign policy focuses on three core tenets: opening markets and removing trade barriers; promoting exports of energy supplies, technology, and services; and—importantly—ensuring the economic and energy security of the United States and our allies and partners.

Complementing efforts like USTDA’s new program on U.S. Gas Infrastructure Development, the Bureau of Energy Resources (ENR) at the State Department is working with governments to craft sound regulations and policies as they pursue LNG imports as a partial solution to their energy needs.

For example, we have a team in Croatia this week exploring how we can assist the government with its desired Floating Storage Regasification Unit (FSRU) on Krk Island, which if constructed would help diversify Croatia and Europe’s energy supply, strengthening its energy security.

Of course, U.S. energy exports are just one part of the story.

The initiative that will be launched today seeks to connect U.S. companies to opportunities across the natural gas value chain in emerging economies. Well-governed energy sectors allow industry-leading U.S. companies to better compete on a level playing field for new business opportunities around the world. They can also lead to greater global energy security.

That is why the State Department helps countries to establish the fiscal, regulatory, legal, and policy frameworks needed to attract investment for energy projects.

For example, the United States is a staunch supporter of European energy security, which is critical for ensuring Europe’s role as a forceful partner with the United States in meeting global challenges. This includes Ukraine, where natural gas is key to the country’s national security. That is why we assist corporate governance reforms of Ukraine’s state owned energy companies to reduce reliance on Russian gas imports, promote privatization of inefficient state-owned-enterprises, accelerate reforms to combat corruption, and assist Ukraine in meeting European Union standards and commitments.

Our efforts in Ukraine are taking place as Europe continues to expand infrastructure and implement market rules to take advantage of the more competitive global gas environment. The successful start of LNG import terminals in Lithuania and Poland have increased regional supply optionality and allow these countries to partially wean themselves from Russian pipeline gas with LNG. Croatia, Bulgaria, and Greece are planning import terminals and pipeline investments that, like the Polish terminal, could supply gas to Central and Eastern Europe, including to Hungary and Ukraine.

Interconnecting infrastructure and developing market rules that encourage regional trade is also critical for energy security and economic development. Doing so enables competitive energy trade that lower energy costs, while also enabling markets greater access to a diversified mix of fuel types, technologies, supply sources, and deliver routes.

For example, the pipelines between the United States, Mexico, and Canada have driven down the cost of doing business, spurred economic growth, and increased regional energy security.

Most people do not realize the scale of North American oil and gas integration. More than 100 cross-border pipelines transport crude oil, refined products, and natural gas between the United States, Canada, and Mexico. This amounts to more than $200 billion in annual energy trade.

In closing, the Department of State will continue to invest our diplomatic capital and technical assistance resources in ensuring that countries achieve their own goals for energy security and economic development. Doing so makes for a stronger and safer global community, while providing opportunities for U.S. companies to excel.

The United States has a competitive advantage when it comes to energy technologies. And this advantage translates into American jobs and investments into U.S. infrastructure. That is certainly the case with natural gas.

We look forward to working closely with USTDA and others in the Administration to continue highlight the competitiveness of U.S. energy exports.

Thank you.