HomeRemarks and Releases – Bureau of Energy Resources...Assistant Secretary Geoffrey Pyatt’s Remarks at the Center for the Study of Democracy

# 									Assistant Secretary Geoffrey Pyatt’s Remarks at the Center for the Study of Democracy							

Remarks

Geoffrey R. Pyatt, Assistant SecretaryBureau of Energy Resources

Center for the Study of Democracy

Sofia, Bulgaria

March 28, 2023

**A/S Pyatt:**  Thank you very much, Ognian.  It’s wonderful to see everybody, and many, many thanks to CSD for inviting me to be part of this conversation today on an issue that is so important to our transatlantic issues and to our shared interest in the energy transition.

As your opening remarks made so clear, the countries of Southeast Europe need no reminders about the risks of being over-reliant on Russia for energy, and gas in particular.  Indeed, I will always remember vividly from my time in Athens what Bulgaria experienced last April when it was the first EU member state to face a full cutoff of Russian gas.  And I must say, as Ambassador in Athens I was particularly glad to see the deepening cooperation between Greece and Bulgaria during my time in that role which brought benefits to those two countries, but also to the wider region of Southeastern Europe.

As Ambassador I was really pleased to have supported the development of a number of key infrastructure projects including the Greece-Bulgaria Interconnector and the port renovations and floating storage and regassification FSRU at Alexandroupolis, both of which made significant contributions to changing the energy map of Southeastern Europe.

I was really delighted to be in Sofia last October as part of my very first trip as Assistant Secretary of State, just after the start of operations for the IGB Pipeline and to see and hear in that setting just how quickly the energy landscape of the region was changing.

Having just passed the one year anniversary of Russia’s illegal and brutal invasion, I think the trend lines are now clear in terms of the shift in geopolitics and the international resolve to disentangle ourselves with maligned actors, most importantly Russia, and in particular the efforts that have been undertaken in Southeastern Europe including the IGB, Alexandroupolis, FSRU, Bulgaria’s expanding gas storage facilities, and the gas transit agreements with Turkey and North Macedonia, all look even more important a year into this enterprise.

The United States and Europe have the same priorities.  We want to diversify energy supply routes and avoid any one supplier being able again to weaponize energy.  We want to accelerate the deployment of sustainable clean energy resources.  We want to reduce methane emissions and CO2 intensity across the oil and gas supply chains.  And we want to promote open and transparent energy markets that benefit our citizens and consumers.

So Europe and the United States have the same goals.  It’s been very impressive to me to see the speed of European decoupling from Russia and importantly that includes Bulgaria’s recent agreement with Westinghouse on nuclear fuel supply.  But Europe is going to continue to need affordable, reliable energy and wants that energy to be as clean as possible.  Conversely, Russia is never again going to be seen as a reliable energy supplier, a realization that I think has helped to accelerate Europe’s shift towards renewable energy sources.

Europe, of course, is also making continued investments that the United States welcomes in alternative sources of both piped and liquified natural gas such as the Azeri gas that Bulgaria is accessing through the IGB and the Southern Gas Corridor.

For over a decade the United States has been working with Europe to build energy security by identifying alternative routes, promoting reverse flows, expanding interconnections for natural gas, particularly in Southeastern Europe and the Eastern Mediterranean.

Globally, LNG volume has quadrupled from 200 to 2022 with 65 percent of that growth coming from the United States.  The United States has become and will remain for years to come the largest global LNG exporter with more export facilities coming online in the next couple of years.  Import infrastructure is growing as well in Europe including more regassification facilities and an increasing number of LNG carriers.

I should emphasize that in the US view LNG shipping is also part of the global energy transition.  If shipping were a country it would be among the top ten CO2 emitters and I know the industry is working hard on that problem.  ENR has had ongoing discussions with leaders in the global shipping industry, many of whom come from Southeastern Europe.  All of them are working on lowering emissions through alternate fuels, new technologies like green hydrogen, carbon capture, and wind assistance.  Some of these technologies are going to be improved and scaled by leveraging the incentives in two recent US laws — the Bipartisan Infrastructure Law and the Inflation Reduction Act.

I should say as an American, I’m very proud of how our LNG producers mobilized in response to the Russian-induced global energy crisis.  More than 70bcm of US-owned LNG was exported to Europe in 2022, more than double what we delivered in 2021; and US LNG export capacity is going to grow by about 50 percent by 2025.  Meanwhile, new FSRUs in Europe will add more import capacity and even more opportunities to diversify natural gas supplies.

As important, we’re pleased to see US companies’ commitment to the decarbonization of their industries through development and deployment of technologies including carbon capture utilization and storage, direct air capture, and others.  And I know that in Bulgaria both AES and Contour Global are strongly committed to that goal of decarbonization in their Bulgarian thermal power plants.

Another important initiative to make up for the Russia-sized hole in global gas supplies is what the United States has been doing with our European partners through the US-EU Joint Task Force on Energy Security.  In particular the focus there on efficiency, including measures like heat pumps, industrial energy efficiency measures, are vital to European energy security.

While I think we’re all very satisfied that Europe was able to meet its needs this winter, more remains to be done and the United States is committed to moving forward in lockstep with our European allies.

Again, one of the consequences of Russia’s war against Ukraine is that the global commitment to energy transition has accelerated for climate, economic and energy security reasons.  From the United States’ perspective, supporting both energy security and a clean energy transition are mutually reinforcing.  As we say in the United States, “we can walk and chew gum at the same time.”  In the long term all of us need to drastically accelerate our energy transition, and in addition to supporting decoupling from Russia, we’ve deepened our cooperation across Southeastern Europe on renewables, on battery storage technologies, on nuclear technologies including SMRs and other clean energy options like green hydrogen — all of which I discussed when I was in Sofia last year.

The IEA of course projects that renewables will surpass coal to become the largest source of electricity generation by 2025.  All of us need to do more to address the policy regulatory permitting and financial challenges to that transition.  We’ve demonstrated our commitment in the United States through legislation, particularly the Inflation Reduction Act that I mentioned earlier.  The IRA will incentivize clean energy generation and supply chain and support decarbonization technologies including CCUS and green hydrogen.  Already since the IRA the United States has seen $75 billion in new investment in battery technologies for instance.

The last point before I close.  I want to note how much we appreciate Southeast Europe’s steadfast support for Ukraine.  That continued solidarity will be critical to getting through this crisis.  I saw that so vividly in my conversations with Prime Minister Mitsotakis, Foreign Minister Dendias, and the rest of the leadership in Athens.  It’s been equally true, of course, in the case of Bulgaria.  Despite very challenging circumstances including the April 27th Gazprom cutoff.  Bulgaria has taken this opportunity to fast-track its efforts to diversify natural gas supplies and I should note, Bulgaria has been an active and supportive participant in our G7-Plus effort to defeat Putin’s waves of attacks on Ukraine’s energy grid and it’s greatly, greatly appreciated.

Bulgaria, of course, is already importing gas from Azerbaijan and has plans to contract LNG through the Alexandroupolis FSRU to meet its remaining demand.  All of this is an important example for the rest of Europe.

But more work lies ahead.  I’ve already talked about nuclear.  There’s work to be done on crude oil.  Southeast Europe needs to continue to diversify its crude oil imports.  Doing so denies the Kremlin the revenue that it uses to support its brutal war.  And the US government is committed to partnering with our European allies, including Bulgaria, to help identify and secure sustainable alternative suppliers.

We recognize that even renewable energy is not without its own security supply challenges, especially along the supply chain.  As we navigate the clean energy transition it’s going to be even more important that we develop diverse supplies of increasingly high demand critical minerals and the ability to refine those minerals.  Any market, whether it’s natural gas, nuclear fuel, or critical minerals, if it’s dominated by a single actor, it’s not going to provide the competitive transparent and sustainable foundations for the clean energy transition that we all want to accelerate.

So none of this is to say that the work ahead is going to be easy.  The energy transition is going to be more challenging for some countries than for others.  There’s no doubt about that.  But it’s also an opportunity for new jobs, for economic growth, and improved air quality.

In closing, I just want to reiterate, bolstering energy security has never been more central to national security and Southeastern Europe is right at the front lines of that effort.  But the United States sees the future path of energy diplomacy as an avenue for cooperation, not for conflict.  What Bulgaria has been doing over the past few years with IGB, with its communications with Turkey, with its work with North Macedonia, with Greece, all illustrate that principle vividly.  Disruptions caused by Russia’s war against Ukraine mean that our collaboration with allies and partners like Bulgaria is more important than ever, so I’m delighted to be with you today and I look forward to the conversation.

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**Question on future of LNG in Western Balkans:**

The answer to the question is yes.  We see gas and LNG as a key aspect of our shared interest — the  United States and the European Union — in facilitating energy transition and decarbonization in the Western Balkans, a region that has been particularly dependent over the years on Russia.

That’s why the Alexandroupolis project is so important, and I was really proud that one of my last acts as Ambassador was to be in Alexandroupolis at the beginning of May with President Michel, with Prime Minister Mitsotakis, but also with the Prime Ministers of North Macedonia, Bulgaria and Serbia, because that is a truly regional project with both Serbia and North Macedonia being contracted off-takers and a clear intention of all the regional players to leverage the Alexandroupolis FSRU as a mechanism to reduce dependence on Russian gas and develop alternatives looking to global markets.

We’re also very supportive of the pipeline connection, the gas pipeline between Greece and North Macedonia.  Once that project is completed and you have a reliable gas connection to North Macedonia, it’s relatively simple, something that I’ve discussed with Prime Minister Kurti and others, to begin gasification of the energy grid in Kosovo.  Likewise, our Ambassador in Albania has been very active working with American countries on opportunities for LNG there.

Of course we put a lot of US government energy behind the Krk Island FSRU project in Croatia.  So we see gas in the Western Balkans as a key element of the transition for energy security off of dependence on Russia.  Also the transition away from coal and more polluted fossil options.  And as a catalyst to deeper interconnectivity for renewables.  There’s been great progress, for instance, between Albania and Greece where you can take advantage also of the seasonality that Albania’s increase in hydro capacity during the summertime coincides with the spike in demand that Greece experiences as the tourism economy grows every summer.

So we take a very strong regional approach to these issues and I’m very, very proud of our cooperation with Brussels on this.

I should say on the Brussels point, and thank you for mentioning my comment about the task force, I’d also note I’m going to be in Brussels with Secretary of State Blinken on Tuesday for the next meeting of the US-EU Energy Council.  This will be the first meeting of the Energy Council since the invasion of Ukraine and it reinforces the commitment that the United States has to the strongest possible energy and energy security partnership with our European allies.

Then on China, just very briefly, I’ll say two things.

One, over the long term, it’s critically important that we all work with China on issues of energy transition and climate. China is, of course, the world’s largest CO2 emitter and needs to make choices about its own future energy pathway.  I was in Pakistan recently where China continues to build very large coal-fired power plant, contributing further to our climate crisis.  So we need to continue that conversation.

On the question of what’s going to happen with markets, one thing I’ve learned in this job is that markets go up and markets go down.  And governments can have relatively modest impact sometimes.  But what I would note here is the significant volume of additional gas that’s going to come into global markets in part because of what’s happening in the United States, what’s happening in Qatar.  But I would also note the opportunity we have as we accelerate energy transition to facilitate additional gas exports, for instance in Europe where gas is clearly a transitional fuel.  Those molecules will be freed up over the longer term for other markets.

And again, coming off of recent travels in South Asia, one is reminded that the world is going to need all the energy sources that it can find over the next decades as literally billions of citizens in Africa, in South Asia, in Southeast Asia come into the middle class and are going to need all the energy sources that they can find.  Our interest is to see that that energy demand is filled in the least carbon-intensive way possible, whether that is wind, solar, small modular reactors, green hydrogen, abated LNG and gas.  All of these are going to be part of the mix.  And I should have emphasized and I think I alluded briefly in my remarks as well to the importance of carbon capture and sequestration in the US strategy for meeting our own climate goals, but this also is going to be an important element of how we meet that rising global demand.

A couple of quick answers there.  I think I’ve got time for one other round of questions, if you want to fire away.

**Moderator:**  I don’t see any questions in the room.  I don’t see also any questions online.

But thank you so much, Ambassador Pyatt for meeting with us and that’s really a wonderful perspective.

Tags

BulgariaBureau of Energy ResourcesBureau of European and Eurasian AffairsEnergyGreeceRussia

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