HomeBureau of Energy ResourcesRemarks & Releases...Assistant Secretary Pyatt’s Remarks at the CSIS Energy Security & Geopolitics Conference

# 											Assistant Secretary Pyatt’s Remarks at the CSIS Energy Security & Geopolitics Conference									

Remarks

Geoffrey R. Pyatt, Assistant SecretaryBureau of Energy Resources

April 24, 2024

**A/S Pyatt:**  Thank you very much, Max, and let me congratulate both you and Joseph on this new program which I think really orients us around a critically important set of issues at the heart of our transatlantic security relationship.  I also want to thank and congratulate Georgios Stassis for the role the PPC is playing in this exercise.  And personally, as somebody who got to know PPC first as Ambassador in Greece, it’s incredibly exciting to see the company’s transformation into a real leader in the clean energy transition across Europe, but also, and I think this goes to the broader story of Greece’s strategic transformation, a leader in the wider region with new investments in Romania and a very ambitious regional vision.

We had an earlier discussion over breakfast and I said I was struggling to figure out what I could say that would be new and novel for such a well-informed audience, but I thought what I would do this morning is just to share four quick points which I would suggest would be useful for framing the research agenda for Max and Joseph’s new project.

The first comes from my last foray to Europe, and Europe is the biggest part of my job as ENR Assistant Secretary, but I had the honor two weeks ago to be in Vilnius, Lithuania as the head of the US delegation for the Three Seas Summit.  It was, as always, really useful to be back in the European Union.  It was slightly painful because we were there gathering in Vilnius on a beautiful spring day on the same morning as Russia’s largest single waive of airstrikes on Ukraine since the beginning of the full-scale invasion.  President Zelenskyy was there and I thought spoke with great confidence but also impatience.  And obviously what’s happening in Congress this week is a huge confidence contributor in that context.

I was also quite struck by the leadership that President Nauseda of Lithuania provided for the Three Seas meeting and in particular his very strong focus on how we collectively should think about leveraging the Three Seas framework in the context of our collective interest in seeing both Ukraine and Moldova successfully navigate the road to European Union membership and the difficult reforms, but also the structural changes that that will require.

There were, for me, sort of three big takeaways from the Vilnius discussions.  One was a very strong consensus that we all need to be doing more to support Ukraine in the context of this brutal and unprovoked full-scale invasion, but also for our European colleagues, to really prioritize the work that needs to be done to accelerate Ukraine’s EU accession which is the real prize that the Ukrainian people have been fighting for for years now and will be one of the shortest routes to Ukraine’s long term security and prosperity.

The second takeaway for me was a very, very strong focus on energy and in particular the opportunity and the imperative for the Three Seas region to build a diverse and secure energy system which mean more renewables.  The literal rewiring of the European energy system, and I’ll come back to that in a minute. 

And in this regard and in the context of PPC’s participation today, I was really struck by the leadership that Prime Minister Mitsotakis provided on behalf of Greece.  Some of this I think reflected is recent travel to Ukraine including to Odesa where he described to me the experience of being targeted along with President Zelenskyy by a Russian missile attack, but also I think his strong belief and his commitment to our transatlantic alliance and the understanding that the success of our collective enterprise in Ukraine is vitally connected to the credibility and durability of the NATO alliance and the test that Vladimir Putin is presenting with us.

The third big takeaway for me was the very strong focus on what Greece has been calling the Vertical Corridor.  We talked about that a little bit this morning also with the Bulgarian Ambassador.  But essentially the concept here is to help to further diversify energy delivery in Southeastern and Central Europe by repurposing legacy pipeline infrastructure in the former Trans-Balkan Pipeline which used to deliver Russian gas to the south, and redirecting that to leverage the re-gas capacity in Greece and Turkey.  

New infrastructure like the TAPP Pipeline, the IGB Pipeline, the investment that our Development Finance Corporation is making in the Turin Gas Storage in Bulgaria, and a very strong focus from Romania on being a conduit for not just the delivery of gas, but also over the longer term clean hydrogen and green electricity upward into Central Europe, into countries like Hungaria, Australia and Slovakia which still depend significantly on Russian energy and to accelerate Europe’s decoupling from Russian supplies.

So very excited about the possibilities there.  It was my opportunity to convey strong US support for this concept which is — and this brings me to my second point — part of a much larger rewiring of Europe’s energy system in the aftermath of Russia’s weaponization of its energy resources.  Rewiring of grids, of pipelines, and supply chains.  And I think this points to one of the unheralded success stories of our collective response to Russia’s full-scale invasion, and perhaps one of the only happy aspects of the tragedy of the past two years.  That has been Russia’s extraordinarily short-sighted action in weaponizing its energy resources which then incentivized Europe to decouple from Russian supplies I think much much faster than anyone would have predicted in February of 2022.

Russia has decisively proven itself to be an unreliable supplier of energy.  It will choose to weaponize its energy resources as a tool of political coercion.  

One of the European ambassadors at our breakfast this morning talked about this as one of Europe’s strategic mistakes and I think today we’re in an environment where Russia is never again going to be seen as a reliable supplier of energy and where Europe’s transition away from Russian energy has progressed much faster than predicted and marks a really permanent shift in the international energy map.

It’s part of my job to ensure that as European importing companies turn away from Russia and turn to more reliable suppliers, that there are very limited opportunities for Russia to secure new markets.  So if you look at some of the numbers, in 2023 Russian natural gas represented only 13 percent of the EU supply.  That number has declined since then, compared to 40 percent in 2021.  

And I was reading this morning a report of some comments by the Swedish Foreign Minister speculating on the 14th sanctions package which the EU will soon adopt and in particular nis expectation of additional restrictive measures on Russian LNG as well as a very strong focus on anti-circumvention measures, much like the Biden administration has done as we’ve moved into phase two of the price cap policy to focus on shippers, companies, insurance providers that are circumventing or just declaring their attestations in the context of the price cap.

The IEA which is the best source of data on these issues projects that Russia’s share of internationally traded natural gas which stood at 30 percent in 2021 will fall to 15 percent by 2030.  And that Russia’s net revenue from natural gas sales will fall from around $100 billion to less than $40 billion in 2030.

These shifts are resulting in real long-term losses for the Russian Federation in terms of both its global energy influence and the energy revenues that it uses to prosecute the war. 

The other irony, of course, is that Russia’s actions have also incentivized Europe to significantly accelerate its own energy transition and in this regard Greece is a wonderful example to become a true leader in Europe in renewables, and is regularly recognized as such by the European Commission.  

I had the opportunity at COP 28 in Dubai to be on a panel with Greece’s Deputy Energy Minister, Alexander Sudoku, and the EU Director General for Energy Ditte Jorgensen, and it was enormously heartening for me to hear the admiration that Director General Jorgensen expressed for Greece’s performance in this regard, and in particular the fact that Greece quite remarkably is on track to have an energy system which by 2030 is 80 percent reliant on renewable sources.  An extraordinary transformation and a real achievement.  

ABC has been part of this story including with its expansion recently into Romania with the renewables portfolio there.  Its plans for additional projects across Southeast Europe and really its role providing an example of how utility companies across Europe are looking to redraw energy maps, to accelerate deployment of renewable power, and to create the grids and interconnections that are necessary for that power to be not only affordable but also reliable.

A third point, and I’ll get through the next two quickly and finish up.

The US is going to keep pressure on Russia.  Sanctions are having a real impact in the LNG space which I’ve already talked about.  You can look at NOVATEK, Russia’s largest producer of LNG which has recently had to suspend production at its Arctic LNG-2 liquefaction facility, in part because of sanctions that the Biden administration has led.  Arctic LNG-2 is a critical piece of Russia’s strategy to try to capture 20 percent of the global LNG market.  We’re going to keep tightening the screws.  We’re going to continue to designate a broad range of entities involved in development of other key energy projects, future energy projects as well, and associated infrastructure including the Vostok Oil Project, the Ust Luga LNG Terminal, and the Yakutia Gas Project.

Our sanctions are targeting entities involved in the procurement of materials and advanced technology for future energy projects, and the service providers which are essential to Russia’s hope to grow its future capacity.

We’re also continuing to see the price cap policy constraining Russian revenues while limiting the impact of Russia’s weaponization of its energy on global prices.  And in this regard we are 100 percent aligned with the European Union, coordinating closely with the EU and all of our other G7 partners including importantly Japan.  So this is a success.

The last point I will make, and I know this is going to be at the heart of the project that CSIS will be pursuing, is our understanding of energy as a core element of our overall transatlantic security relationship.  We are, and a big part of my job is leveraging America’s energy abundance to advanced US national security including our support to allies and partner around the world.

With the help and led by US industry we’re continuing to support Europe through our exports of LNG which helped the EU to reach record levels of natural gas storage prior to this winter.  And which will continue to be a core element of Europe’s energy security.

We’re currently exporting a total of 124 billion cubic meters of LNG per year globally, and there’s another roughly 120 BCM per year of capacity that is currently under construction and will come online by 2030.  These are projects which are fully permitted, which are fully invested, and are going to happen.  So what you are going to see is the United States as the world’s largest and unrivaled provider of LNG for years and years to come.  

At the same time as we have become a major exporter of crude oil.  This is one facet of our overall energy abundance.  The other is America’s continued leadership through the acceleration of our energy transition catalyzed by the Inflation Reduction Act which is driving billions of dollars of new investment and is keeping American companies at the forefront in terms of shaping the hybrid energy system of the future.

Through mechanisms like the USEU Energy Council which we hosted at the State Department just a couple of weeks ago, we’re supporting European efforts to end dependence on Russian fossil fuels while at the same time increasing efficiency and accelerating the clean energy transition.  So we are a thousand percent aligned on these issues.

There’s one last issue that I will leave, Max, with you and with Joseph as you think about the scope of your work ahead, and that’s the critical importance of continuing to work on the diversification of energy supplies as the United States has championed for several decades now.  And in particular we need to make sure that we don’t replace an era of dependence on Russian fossil fuels with dependence on critical minerals and critical mineral processing in the People’s Republic of China.

So we can’t allow it to be repeated in emerging sectors like clean hydrogen and wind power and electric vehicles what has already happened in solar where China has achieved an overwhelming monopoly on the supply chains that makes it very, very hard to develop a diverse supply chain, including important participation here in the United States by American companies.

So Europe is an essential partner in this effort because we’re both pursuing this transition because there are billions of dollars of investment flowing both directions across the Atlantic, and  I think we want to continue to stay focused as well on this aspect of our energy security relationship even as we work as hard as we possibly can to ensure Ukraine’s victory and a strategic defeat for Vladimir Putin.

So I very much look forward to the results of this project and wish you a very successful conference today.  Thank you very much.

Tags

Bureau of Energy ResourcesEnergyEnergy

Back to Top