A/S Pyatt: Good morning, everybody. Let me start by saying thank you to The Economist, and what a huge honor it is to have the opportunity to be speaking this morning along with Chairman Menendez, Foreign Minister Kombos, Governor Tzitzikostas, Deputy Minister Fragkogiannis and so many other friends.
It’s also really wonderful to be here to discuss the important role of the Eastern Mediterranean in furthering European energy security and driving the global energy transition.
I want to start in this context by saying how really delighted I was this morning to hear Senator Menendez’s very strong endorsement of the 3+1 framework for the U.S. relationship with Cyprus, Greece and Israel. And let me assure you that the Biden administration fully shares that support.
This is an incredibly dynamic and complicated time in the geopolitics of energy and it’s been fascinating for me over the past year to play a small role in helping to shape the U.S. approach to these issues.
For instance, I was recently with President Aliyev in Azerbaijan for Baku Energy Week where I was reminded of all the work that we did during my time in Greece to advance the TAP Pipeline and the Southern Gas Corridor which has proven to be so critical in a time in which Russia has sought to weaponize its energy resources as a tool of coercion that it uses also to fund its illegal and brutal war against Ukraine.
In the same vein, I’ve been delighted in my new role to continue to watch progress in the region, for instance, on the Floating Regasification Unit at Alexandroupoli or the Greece-North Macedonia Interconnector Pipeline — both projects that are helping to transform the energy map of Southeastern Europe.
The work of diversifying away from unreliable suppliers continues now in the second year of Putin’s full-scale invasion of Ukraine as it is clear to all of us that we are now entering a completely new era for global energy markets.
The United States sees tremendous opportunities for the Eastern Mediterranean region against this new reality.
First, it’s clearer than ever that global buyers will never again view Russia as a reliable energy supplier. This hole in the global market creates an important opportunity for the Mediterranean region’s natural gas producers to help Europe diversify its supply while ensuring greater transparency around ESG standards such as greenhouse gas emissions and CO2 abatement.
Of course we have two leading American companies in the form of Chevron and ExxonMobil with their off-shore developments around Greece and Cyprus. But also to the south we’ve sought to develop ways in which Libya and Algeria — both major exporters to Europe — can reduce gas flaring and capture fugitive methane emissions, enabling greater exports and helping to meet our climate targets.
In the recent months I’ve had opportunities to engage with energy ministers and national oil company leadership in both of those countries underlying U.S. government support for these efforts.
Second, the volatility and uncertainty caused by Russia’s war have increased global commitment to the clean energy transition for climate, economic and energy security reasons. This commitment to diversifying routes and sources creates an opportunity for the Eastern Mediterranean to leverage its abundant renewable energy resources to help scale clean energy production and drive decarbonization of hard to abate sectors.
These possibilities were on full display when I visited Sharm-el-Shaikh for COP27 last year. I also saw the seeds of these possibilities during my time in Greece where I witnessed first-hand and supported the region’s emergence as an important energy hub from the Balkans all the way to North Africa.
Working my way around the region, one can also point to many examples of how the Eastern Mediterranean is furthering our shared energy and transition goals.
Last October, for example, I was in Sofia to celebrate the start of the IGB Pipeline which will enable LNG from the US and pipeline gas from Azerbaijan to reach Bulgaria, Romania and beyond.
One of my last events as Ambassador in Greece was to celebrate the launch of the Alexandroupoli FSRU project which is a dynamic example of regional cooperation among several countries in the region that are investors in the project.
Further south, Egypt, Israel, Jordan, the Republic of Cyprus, and other countries have come together to cooperate on energy, including through mechanisms like the Eastern Mediterranean Gas Forum. Egypt already plays an important role in liquifying and transporting Israeli and potentially Cypriot gas when it comes on-line as LNG to Europe.
My good friend in Greece, Deputy Minister Fragkogiannis has highlighted energy also as one of the potential areas for cooperation in the positive economic agenda, with Türkiye, which reinforces the United States’ view that energy should be an avenue for cooperation, not conflict.
It’s also fantastic to see so many proposals for energy interconnection projects involving Greece, Israel, the Republic of Cyprus and Egypt. Electricity interconnectors like EuroAsia and those proposed between Egypt and Greece will play a critical role in future energy systems. They allow regions with comparative advantages in wind, solar and other clean energy sources to export electricity in times of high production and to import when needed.
The interconnectors also provide opportunities for regions with comparatively lower costs such as the Middle East and North Africa to export renewable energy to markets where space or cost for renewables are more challenging.
Several of our Gulf partners share this view and have already committed to investing in new renewable power generation in Europe, looking specifically at export markets.
The interconnectors allow greater deployment of renewable energy assets which cannot always be built close to markets they serve due to their large footprints.
Finally, these interconnectors contribute to security of supply by reducing the need for fossil-based generating capacity and improving the utilization of existing assets.
Another important energy cooperation mechanism, of course, is the 3+1 process through which Greece, Israel, the Republic of Cyprus and the United States collaborate on topics such as lower carbon energy infrastructure and renewable energy research and innovation. My bureau is proud to lead the Renewable Energy Working Group under this mechanism, and my team looks forward to reviving the Energy Minister’s pillar of the 3+1 in the coming months. Working with my friend, Greek Minister Skylakakis and Deputy Minister Sdoukou.
I’d like to end by highlighting three other broader priorities that have implications for our shared energy goals in the Eastern Mediterranean. First, given the prominence of the Greek and Cypriot maritime sectors I’d like to focus on the shipping industry’s key role in the global energy transition. From reducing its own greenhouse gas emissions through new zero and near zero emission fuels, to building an international transportation and trade network for new forms of clean energy and the critical minerals that drive them. Progress on reducing shipping emissions can be tremendously beneficial to our global efforts towards 1.5 degrees Celsius by 2035.
An important forum to further this discussion is our annual Our Oceans Conference which facilitates dialogue between governments and industry and fosters new programs. At this year’s Our Oceans Conference in Panama, the United States made 77 announcements from eight agencies and offices totaling nearly $6 billion to cover all types of actions related to maritime resilience including green shipping. And I am so glad that Athens will host the 2024 Our Oceans Conference which will be an important venue to discuss these issues in the larger context of the Eastern Mediterranean.
Second, it is important to highlight that we need sure, reliable supply chains for the energy transition. Critical minerals are at the heart of the clean energy transition and demand for these minerals is rising rapidly. We need to ensure we don’t replace fossil fuel dependencies with critical minerals dependencies. Finding ourselves as CIA Director Bill Burns recently put it, “at the mercy of a cartel of one for critical minerals and technology, especially a country that has demonstrated the will and capacity to deepen and weaponize those dependencies.”
A cautionary example is the recent announcement of China’s metal export controls on gallium and germanium, two key inputs for semiconductors. Initiatives like the Minerals Security Partnership which my bureau manages, will become even more important to diversifying reliable mineral supply chains as countries and companies seek new materials and processing capabilities in response to the steep rise in demand that the energy transition will bring.
Finally, I want to stress that American energy companies are strongly engaged in this region. From large multinationals like GE Vernova, ExxonMobil and Chevron to leaders in new technologies like Advent Technology and Tesla. As part of this point I cannot emphasize enough the importance of the Inflation Reduction Act, the IRA, which is already super-charging the global energy transition. The innovation that the IRA is already spurring among companies in the United States — from clean hydrogen and carbon capture to smart grid innovation, port electrification and storage technologies will reverberate to the benefit of the world.
The Eastern Mediterranean with its strong Diaspora ties to the United States and our innovation ecosystem stands to benefit significantly from the new opportunities that the IRA will unlock.
To conclude, I will appreciate that this has been a challenging year and a half for the global energy market but I think there is a lot of room for optimism. The United States is committed to working with our partners in Southeastern Europe, the Middle East and North Africa and we will support you on all the opportunities I’ve described today.
With that, I’d like to thank The Economist for inviting me to join today, and I look forward to the rest of today’s discussion. Thank you very much.
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