Thank you, Hadley. It is an honor to be here today.
Your excellencies, distinguished guests, colleagues, ladies and gentlemen, we have heard from several speakers that we are entering an exciting era of energy transition and transformation, of challenges and opportunities. As a result of that, I believe, we are also entering a new era of energy partnerships. This is a reflection more of geopolitical dynamics than a matter of technical recovery.
The Department of State has been involved in energy for a very long time. Yet, we are not a technical agency. We do not view it as a technical issue but as a broader proxy for foreign policy challenges. I’ll be presenting them here. Energy is more than just BTUs or barrels. Energy drives economic development and progress. And energy is foundational to political stability.
Secretary of State Henry Kissinger wrote that the oil shock of the 1970s catalyzed the modern-day interdependency of states. He also created a diplomatic architecture and founded the International Energy Agency to ensure resilient energy supplies and provide for emergency responsibilities.
Since that time, governments, leading companies, and the world over have recognized the importance of stable energy markets. Two months ago, that system was put to the test.
The attack on Saudi Arabia’s energy complex was directed at the kingdom. However, the perpetrator’s target was, in fact, all of us. The global energy consumer. Diplomatic tools like the IEA and Strategic Oil Stocks stood at the ready, and Saudi Aramco’s remarkable response reassured markets. The United States recognizes and commends our partners in the region to make the necessary investments to ensure productive capacity that benefit all citizens.
We are living in a period of unprecedented energy transformations, both in terms of energy supply and demand patterns, and the technologies to meet that demand. ADNOC and other leaders in this room understand this well and are helping to lead that transformation.
We are entering a new era built on partnerships. We heard earlier Dr. Sultan Al Jaber acknowledge this transition during his opening remarks, saying “through creative partnerships, we will drive growth.”
The United States has and continues to transition from energy scarcity to energy abundance. This shift benefits the United States, and also benefits the rest of the world. As a former energy executive, I see it playing out on a daily basis in dramatic deal flows. As Assistant Secretary of State, I see it in the diplomatic, commercial, and security posture of nations.
U.S. energy abundance offers countries with new levels of opportunity to ensure and secure the energy they need. Governments around the world are still coming to terms with this new reality and reconciling the implications. This is understandable.
The U.S. shift from scarcity to abundance occurred with unprecedented speed and scale. It was not a matter of government decree but of federal government restraint.
For more than 40 years U.S. law prohibited oil exports. Congress lifted the oil export ban in 2015. The private sector responded and today, the United States is the largest producer in the world, on track to produce 13 million barrels next month. A remarkable achievement.
In 2016, when the U.S. began exporting LNG in earnest, we were the 15th largest exporter in the world. The Administration worked hard to streamline the permitting process. Today – 2.5 years later – the U.S. is third. And in the next five years, we are projected to be number one.
We are the second biggest producer of renewable energy. If Texas were a country, it would be the fourth biggest producer of wind energy in the world. And the United States is helping the world in developing renewable technologies and innovation all over the world.
Just like Abu Dhabi, and other cities here in this region, vast conventional energy supplies exist side by side with pioneering renewable energy suppliers, and a spirit for innovation.
Forty-five years ago, Secretary Kissinger laid the foundation for a global energy architecture founded upon scarcity. Today, as both a consuming and producing nation, U.S. energy diplomacy recognizes abundance and how it fosters partnership and cooperation.
The United States system is unique. We have a cooperative federalism system, world leading technologies, and an innovative and competitive market. Yet, the U.S. abundance is also built on shared universal principles: transparency, regulatory and legal certainty, inclusivity, and high environmental and safety standards.
By fostering and implementing those principles, governments will catalyze efficiencies, create markets, and promote growth. It’s crucial that we do so because the world demands it.
In 2040 the world will require 50% more energy than we produce today. Oil and gas will continue to be a major source for the future as we’ve heard from multiple speakers, but there is also this demand that it be produced cleanly, additionally, and that we ensure it is affordable. This drive for cleaner energy reflects broader, positive, global demographic shifts.
Today, there are about three and half billion people living in the middle class. In ten years, that number will rise to 5.3 billion, in the middle class. This new ascending middle class are more educated, connected, and they travel. And when they do, they experience cleaner environments and they demand that their governments provide the same.
Of course, governments want to be responsive to their citizens but many lack the capacity to do so. The United States works in partnership with countries across the world to help them achieve their ambitions in accordance with their self-determined energy path, regardless of energy type. We do this work consistent with those universal principles of transparency, clarity, and fairness.
The United States strives to expand this new era of energy partnership to optimize resource development to benefit countries, regions, and the global economy. In the Eastern Mediterranean, U.S. companies helped discover new natural gas fields. However, these large finds lacked a sufficient domestic market to commercialize them.
Through regional energy partnerships, new supply is coming online, new infrastructure is being built, and new multilateral arrangements are being stood up. Gas is being transported in the region and may soon enter the European market. These are exciting and positive developments and a key focus area for U.S. foreign policy.
In this region, the Gulf Cooperation Council has effectively promoted regional energy cooperation and resilience. The United States recognizes their good efforts and is working to expand and build on them through the Middle East Strategic Alliance (MESA).
MESA is a whole-of-government interagency initiative to advance cooperation across four pillars – political, security, economic, and energy. President Trump announced MESA in May 2017. Since that time, I have convened three MESA energy pillar meetings and look to have more progress in the coming months.
The United States is pursuing similar objectives in our Indo-Pacific Economic Strategy across three areas — infrastructure, digital economy, and energy. As in the case of MESA, I lead the whole-of-government strategy titled Asia EDGE or Enhancing Development and Growth through Energy.
The Indo-Pacific region represents two-thirds of global energy demand growth through 2040. To meet this demand, the region will require trillions of dollars of investment. The United States works in partnership with countries to achieve their energy ambition and develop their capabilities to power their economies. We have several bilateral programs throughout the region, and we are collaborating with other countries including Japan and Australia to foster transparent and efficient energy markets.
The United States transition from scarcity to abundance is opening a new era of opportunity and partnership. We look forward to working with countries around the world to meet their current and future energy needs.
Thank you for the opportunity to speak with you today and I look forward to sharing more about our ability to build energy partnerships together.