Statements by U.S. Officials
The U.S. Regional Energy Strategy
Remarks by Rebecca Neff
STEAM 8th International Energy Arena
Istanbul, Turkey
May 30, 2008
Distinguished guests and colleagues, it is an honor to be here to discuss American energy policy and our work with Turkey and others in the region. My name is Rebecca Neff and I’m a First Secretary in the Economic Section of the U.S. Embassy working mainly on energy and environmental issues. I am here today representing the U.S. Ambassador to Turkey Ross Wilson. Ambassador Wilson sends his best regards and very much regrets that he was unable to be here with you today.
Perhaps, U.S. Energy Secretary Samuel Bodman best captured America’s interest in energy security when he said, “the U.S. desire to foster global economic growth means the world needs more energy.” The International Energy Agency estimates primary world energy needs will grow by 55% by 2030. And, because that will make the global energy market just that much more competitive, America has an energy policy that centers on the idea that we need to diversify our energy sources our energy suppliers and our energy supply routes.
In the Eurasian region, stretching from Brussels to Baghdad to Bishkek, the United States seeks open, transparent, market-driven development and distribution of energy resources and technologies. We have economic and national security reasons for doing so. The United States and the European Union share the largest economic relationship in the world. Together, we account for over half of the world’s GDP. Our economies are inextricably linked, making Europe’s energy supply very important to the United States’ economy.
As President Bush said “energy security and climate change are two of the important challenges of our time.” We take these challenges seriously.
In the United States, we are working to promote cleaner, alternative and renewable sources of energy encourage nuclear power expansion invest in science and technology and improve the efficiency of our electric power infrastructure. We are also engaging with others to bolster the diversity of supply and demand that will accelerate the investments needed for the world’s energy security future.
One of our strongest partners in this endeavor is Turkey. For over a decade, we have shared with Turkey a strategic vision to open new energy corridors, to bring new resources market. One of our great success stories is the Baku-Tbilisi-Ceyhan pipeline. BTC added to global energy supplies fostered regional cooperation and bolstered the freedom and independence of countries in the region, especially the former Soviet states. Investors made BTC succeed, but it happened because governments wanted it to. Key leaders, including former President of the Turkish Republic Suleyman Demirel and the late President of Azerbaijan Haydar Aliyev, had a vision, and it was not the top-down monopolist way of doing business that might otherwise have carried the day – and that some still promote. These forward-looking leaders joined us and others in recognizing the value of a market-oriented, transparent and open commercial energy architecture.
Today we are facing new challenges as we work to apply these same market principles to develop natural gas from the Caspian and Central Asia and bring it to market. We have made progress. In 2007, the South Caucasus gas corridor transported more than 2.5 billion cubic meters of Azeri gas across Georgia to Turkey. Some of this gas transits on to Greece via the inter-connector pipeline inaugurated in November of last year by Prime Ministers Erdogan and Karamanlis, with the personal support of US Energy Secretary Bodman.
The role of Turkey as a gas consumer, a transit partner and possibly as a gas hub, in this era of fast-rising gas demand, is an issue for Turkey to decide. Some of the key elements that would create an efficient gas market – such as a legal and regulatory structure that facilitates predictable and transparent delivery of gas; or a physical infrastructure that provides large storage capacity to weather any disruptions in supply – are also part of the infrastructure that would be needed to develop a gas hub.
And, of course, another important element is sufficient gas supply.
Central Asia
Just over the horizon, the most likely near-term addition to regional supplies is Phase II development of the Shah Deniz gas field which should raise this project’s output to over 20 billion cubic meters by 2014. Development of these supplies and markets is the impetus for Nabucco, Turkey-Greece-Italy and other pipeline ideas now on the table.
Turning these ideas into reality requires linking suppliers buyers financiers and a regime for transport to market. In this context, clarifying the gas transit arrangements between Turkey and Azerbaijan could accelerate Shah Deniz Phase II and other much needed gas development.
Turkmenistan and Kazakhstan are key, additional sources of gas. President Berdymukhamedov is wisely auditing his country’s energy potential as Turkmenistan charts its way forward. Involving major international firms as investors will bring welcome funds, expertise and diversity of partners. Of course, it will also be highly desirable for Turkmenistan to have alternative export possibilities. The most viable route to market is through Turkey. Turkmenistan and Turkey can also be important partners as Kazakhstan looks to diversify its export routes for gas.
Iraq
Iraq also has significant gas resources, according to the U.S. Energy Information Agency probable gas reserves in Iraq amount to over 8 trillion cubic meters. Energy is an obvious area of common interest between Turkey and Iraq and there have already been a series of productive talks between the two countries. The United States is facilitating Turkey-Iraq cooperation through a trilateral natural gas working group. Once the legal status of Iraq’s hydrocarbon development becomes clear, we expect to see a significant jump in Iraqi-Turkish energy cooperation.
Iran
The one country I have not mentioned yet is Iran. It has the world’s second largest natural gas reserves, after Russia. That would normally make Iran a tempting partner for an energy hungry world. But this is not the time for “business as usual” with Iran. Iran presents a profound national security threat to the United States and all our allies in the region through its pursuit of nuclear weapons-related technology and capabilities its defiance of UN Security Council obligations and the destabilizing role it plays in the region.
The goal of the UN Security Council and the wider international community, including my government, is to convince Iran to abandon its nuclear weapons ambitions and urge Tehran to become a better neighbor in the region. We are committed to a diplomatic solution , and we fully support the UNSC’s efforts to apply increasing diplomatic and economic pressure to persuade Tehran to decide between confrontation and isolation, or cooperation and reward.
We do not seek Iran’s isolation. On the contrary, since June 2006, the five permanent members of the UN Security Council – Russia, China, France, the United Kingdom, and the United States – as well as Germany, the so-called P5+1, with full support of the European Union, have extended to the Iranian government a generous incentives package and we urge Iran to accept it.
While Iran ponders its options, energy development in the region should continue without it. We should focus our resources and investment in those countries that are ready to move forward now on the basis of open, market-oriented principles.
This is an historic time. The world’s rising demand for energy is the positive reflection of economic development and prosperity around the globe. But its speed and size are straining supplies, infrastructure and markets, and there are other problems, such as global warming, that directly affect all our energy policies. We know markets over time will provide the necessary resources. But governments have a critical role to play in facilitating development in promoting technologies in making necessary international arrangements and in protecting the environment.
The United States will continue to work with Turkey, the Caspian, Central Asia, the Caucasus, Iraq and other partners in the world to ensure we have the energy resources to continue this growth for decades to come. Birlikten güç doğar (Unity brings strength).
Tesekkur ederim.