Remarks at Event Honoring 25th Anniversary of the Department of State’s Partnership With the Petroleum Equipment and Services Association (PESA)

As Prepared for Delivery

Good evening, it’s great to be in Texas. I am honored that the Houston diplomatic community join us tonight.

I also want to thank Leslie Beyer for her work at the Petroleum Equipment and Services Association (PESA) and welcome the 25 State Department officers here tonight for the energy training, who serve our country around the world. In just three months on the job, I’ve seen first-hand what they do to advance America’s interests, and to support jobs here at home, so let’s give our officers here tonight, and the nearly 1000 officers who have gone before them on this training course, a warm Texas round of applause.

I have to say that even in a pre-recorded video message, Secretary Pompeo isn’t an easy act to follow. But I’ll do my best.

As you just heard from Secretary Pompeo, we’re here to look back on a quarter-century partnership that spans four Presidential Administrations. Since 1993, this partnership with Houston has shown us all why America’s petroleum and gas industry is the best in the world.

Our officers come to Texas to see the energy economy at work, to get hands-on experience, and to learn from you � the industry experts.

Much of the talent from your companies resides in the oil patch, not in Washington D.C. Your expertise and willingness to educate our energy officers gives them a valuable understanding of the complexities of global supply chains, technologies, and the size and scale of equipment.

Our officers leave Texas knowing how to better defend American investments and to protect intellectual property for energy goods and services. And how to be energy ambassadors for the United States abroad.

This is especially helpful in countries that want to upgrade their exploration and production operations. Countries want to use U.S. methods and know how. They want to open their energy sectors to attract foreign investment and improve their energy security.

The State Department has recognized energy as critical to U.S. foreign policy for well over a century. In the 1800s, the State Department led energy diplomacy to secure markets abroad for U.S. oil and kerosene, one of our largest exports at the time.

The State Department tackled geopolitical issues during the oil embargos of the 1970s. It was Secretary Kissinger who convened our European and Japanese allies to the State Department to form the International Energy Agency in 1974.

The prominence of energy in U.S. diplomacy has only grown over the last several decades. Establishing the Bureau of Energy Resources in 2011 � or ENR as we call it � is evidence of that, and we appreciate your support for our mission.

As the bureau’s first Assistant Secretary, my confirmation reflects the bipartisan recognition in Congress and throughout the government of the critical role of energy in U.S. foreign policy.

The truth is, what we’ve accomplished as a country has been truly astonishing. Today, American energy plays a vital role in advancing American diplomacy, security, and economic prosperity, everywhere.

Energy stands at the nexus of national security and foreign policy � at the crossroads of the geopolitical issues of the day.

It’s an incredible time to be working on energy.

When I served as counsel to a U.S. Senate Committee I helped draft the landmark Energy Policy Act of 2005, which helped catalyze today’s shale gas abundance. At the time, Congress was holding oversight hearings on U.S. gas security. Businesses were relocating to other parts of the world because of insufficient gas supplies, and companies were building LNG import terminals.

The United States now stands at a strategic pivot in the history of global energy markets. Make no mistake: There are seismic shifts underway in the geopolitical landscape. And the United States is ready and better equipped than ever to meet the challenges of the present, and fulfill opportunities of the future.

By working together, industry and government can promote stability, prosperity, and security for the United States and the global economy.

At the government level, we’ll do so by continuing to promote and foster a market-driven model of global energy development.

Free markets drive economic growth, and prevent countries from using their energy resources for harmful political purposes. This is a vital U.S. National Security Strategy goal, and it guides our efforts every day at the State Department.

We work to help address the very real issue of energy poverty. Today, 1.1 billion people lack access to electricity and 2.8 billion are without access to clean cooking facilities. That is roughly equal to the populations of North and South America and Africa combined.

As we have seen around the world, an inability to provide reliable energy contributes to broader development and security challenges.

Therefore, the State Department promotes the diversification of energy sources, supplies, and routes. By applying this view of diversification, we support countries to improve their development path based on their self-determined needs. Diversification builds resiliency, and resiliency prevents other countries from using energy for malicious geopolitical aims.

The United States will continue to be a reliable producer, supplier, and partner. We will not shut off the gas when others need it the most. Our goal is to keep markets open, transparent, and free of manipulation and political coercion.

U.S. energy exports are strengthening the energy security of our allies and partners in areas such as Asia and Europe. This week, crude exports from Houston-Galveston surpassed imports for the first time ever, and represent 70 percent of U.S. crude exports.

As with oil exports, increased U.S. LNG exports foster competition, which means a better deal for all of the world’s energy consumers.

Market conditions determine the ultimate destinations of U.S. LNG cargoes. In the last two years, roughly half of the 300 cargo ships that departed U.S. shores landed in Asia to meet its growing demand.

Three weeks ago Secretary Pompeo announced major new economic initiatives in the Indo-Pacific. He dedicated new funding to support U.S. engagement in the region’s digital economy, energy, and infrastructure. These funds represent a down payment on a new era of U.S. economic commitment to peace and prosperity in the Indo-Pacific.

One of these new initiatives called Asia EDGE, or Enhancing Development and Growth through Energy. Through EDGE, we will invest to help our Indo-Pacific partners, working with our industry, to import, produce, move, store, and deploy energy resources.

It’s in our national security interest that America’s allies in Asia and in every region are energy secure. This is especially true in our relations with China. As the two largest energy consuming countries in the world, we must produce, distribute, and use energy responsibly. This is particularly critical when working with less developed resource rich nations. All consuming countries must act transparently and according to international best practices.

Energy diversification is paramount in the developed just as it is in the developing world. The State Department, for decades, has promoted energy diversification in Europe.

I applaud the European Union and its Member States for taking positive actions to enhance Europe’s energy security, including passing legislation to encourage competition, and providing political and financial support to key infrastructure projects. Among these are the Southern Gas Corridor, the future synchronization of the Baltic States’ electricity grid with Continental Europe, and floating storage and regasification units in such countries as Croatia and Greece.

America’s call to diversify the sources and delivery routes of gas predates our relatively newer role as a natural gas exporter. Our steadfast support of the 40 billion-dollar-plus Southern Gas Corridor has spanned multiple Administrations and continues today, despite the fact that there is no direct U.S. investment in the project.

Compare this with two Russia-initiated natural gas pipeline projects that you may have read about: Nord Stream 2 � a pipeline from Russia to Germany through the Baltic Sea � and an expanded Turkish Stream pipeline � from Russia to western Turkey via the Black Sea. These projects pose a significant geopolitical threat to Europe by strengthening Russia’s already pre-dominant role in supplying gas to the Continent.

Unlike the United States, Russia’s energy companies are an extension of the Russian state. They have repeatedly used energy to affect geopolitical aims. As such, Russia’s fundamental goals for these pipelines are geopolitical.

By pushing Nord Stream 2, Russia would end gas transit through Ukraine, depriving the country of critical gas transit revenues. Ukraine earns $2.65 billion dollars a year in transit fees � roughly the same amount it spends on defense. It’s no wonder Russia would like to deprive Ukraine of these funds as they maintain a proxy war in Ukraine’s Dunbas region. This project is a clear threat to European energy security. The United States will continue to call on its European allies to reject it.

Europe is asking the United States for more LNG. U.S. LNG is one of the most reliable energy sources now available to the world. As you heard Secretary Pompeo say in his video message, it provides choice to our partners.

Today, the United States has two major LNG export terminals sending gas to 30 countries across five continents. Yet, this represents only the first wave of U.S. LNG to hit the world market.

Gas has the potential to transform both developed and developing economies worldwide. But the United States is only one part of the overall energy security equation. We need your help and the help of our international partners to continue these efforts.

The business community in this room knows that more export infrastructure needs to be built in the United States, and more import infrastructure built around the world. And, with the diplomatic corps here tonight, all our governments must work together with the private sector to foster stable regulatory regimes to catalyze a strong global energy market.

Energy, and in particular recent discoveries of natural gas, can catalyze collaboration in otherwise challenging environments.

For example, in the Eastern Mediterranean, offshore discoveries in Egypt and Israel have redefined regional relationships as governments seek to work together.

The successful exploration, production, and export of the natural gas in the Eastern Mediterranean will require political cooperation and economic integration.

The State Department has been and remains very much engaged with the region’s governments to address investment climate constraints, security concerns, boundary disputes, and governance issues. The State Department has provided technical assistance to improve power sector performance, reliability, and energy diversification in the region.

In closing, thank you again for having me here this evening, and for your leadership in training our officers. Thank you for being part of this global energy transformation.

My team in Washington and our energy officers at U.S. embassies and consulates around the world will continue promoting exports of all forms of energy technologies and services.

We will continue to advance free, fair, and transparent markets. We will oppose policies that seek to use energy as a means to coerce and shackle rather than as an instrument of liberalization and economic development.

We look forward to working with industry partners to spread the U.S. story around the world and support capacity building in like-minded nations.

Thank you.

Source: U.S. State Department