Embassy of the United States

Speeches

Close Window

Consul General Wiener Gives Remarks at STEAM Arena

enlarge photo

Consul General Wiener Gives Remarks at STEAM Arena

Consul General Sharon Wiener's Remarks at
US-Turkish Energy Cooperation
STEAM 11th International Energy Arena

Istanbul, Turkey
November 5, 2009

Distinguished guests and colleagues, it is a pleasure to be here to discuss American energy policy and our work with Turkey on energy matters.  It’s a great honor to have been asked to speak at this important and timely conference.

To perhaps state the obvious, global demand for energy is rising rapidly.  Even taking into account the declines in demand due to the current economic downturn, our Department of Energy estimates that global energy consumption will increase by over 33 percent between 2010 and 2030, with the strongest growth in China, India and other developing nations.  Energy demand will likely accelerate further in the decades beyond.

This rising demand is the positive reflection of economic development and prosperity that is bettering the lives of millions around the globe.  But its speed and size are straining supplies, infrastructure and markets, and there other problems, of which global warming is one.  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.

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 is Turkey.  The reasons are obvious.  Turkey has been called “the meeting place of Europe, Asia and the Middle East.”  Around this meeting place, Central Asia, the Caspian, the Caucasus and Iraq all have great potential for supplying and participating in the world’s rising prosperity.  Turkey’s role is central.

Some of you in this room worked to make Baku-Tbilisi-Ceyhan a reality.  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 Suleyman Demirel and the late 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.  These principles are the bases of energy exports from the Caspian and Central Asia today.

Now attention has turned to BTC’s counterpart for gas.  In 2008, the South Caucasus gas corridor transported more than 4.5 billion cubic meters of Azeri gas across Georgia to Turkey.  Some of this transits on to Greece via the inter-connector pipeline inaugurated in 2007 by Prime Ministers Erdogan and Karamanlis, with the personal support of the U.S. Energy Secretary at the time, Samuel Bodman.

Just over the horizon are much larger volumes of gas, new pipelines to take that production to market, and additional, accessible resources that these pipelines can attract – a virtuous circle of cooperation, investment, development and economic opportunity built on diversity of supply and demand.  The second phase of Shah Deniz should raise that field's output to over 20 billion cubic meters by 2015.  Liberalizing energy markets and expected economic growth make Turkey a natural destination for a significant share of Shah Deniz gas.  Markets elsewhere in Europe are important, too.  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 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, Kazakhstan and Iraq 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 be important partners as Kazakhstan looks for diverse export routes for its gas, too.

Iraq is another potential supplier.  At the July 13 signing ceremony for the Nabucco IGA, Prime Minister Maliki said Iraq would like to supply up to 15 BCM to Nabucco.   However, there are many practical questions about how and when Iraqi gas will be available.  First, it's not clear how much gas Iraq needs for domestic consumption and in what timeframe.  Also, if the gas came from northern Iraq, it would require an agreement between the Kurdish government and the central government in order to be exported.  If the gas came from the south or west, it would require significant new investment and development.

Turkey’s energy future has a substantial domestic component, as well.  To meet demand that is expected to grow by up to 8-9% per year for a number of years, this country needs some $130 billion in energy investment by 2020.  American business has taken part in Turkey’s energy development and hopes to continue.

For example, ExxonMobil is working with TPAO on Black Sea exploration.  In December, they plan to move their first giant rig up through the Bosphorus to begin exploring 2 deepwater blocks.  (This promises to be quite a sight for those of us here in Istanbul when the rig passes by.)  Clearly, the discovery of major reserves in the Black Sea would dramatically change Turkey's energy equation.  We--the US government--wish Exxon and TPAO luck.

In thermal and hydroelectric power, investments with local partners by such US firms as General Electric, Bechtel, and AES are generating almost 4000 megawatts annually.  In 1998, our governments signed a protocol on the participation of US firms in nine hydroelectric projects.  When completed, these projects will immensely expand Turkey’s electricity output and help power this country’s future.

As we look toward that future, these projects also represent another crucial area for increased US-Turkish cooperation.  That is: expanding the use of clean energy to curb carbon emissions and promote energy and climate security.  President Obama has made the transformation to a clean energy economy a core part of his domestic and international agenda.  

On the domestic side, President Obama is supporting policies that advance energy and climate security and will promote economic recovery efforts, accelerate job creation, and drive clean energy manufacturing.  Our economic stimulus package, the American Recovery and Reinvestment Act, contains over $80 billion for clean energy investment.  President Obama set a new policy to increase fuel economy and reduce greenhouse gas pollution for all new cars and trucks.  The new standards will ultimately require an average fuel economy standard of 35.5 mpg (15 km/liter) in 2016.  The president is also working with Congress to advance comprehensive climate and energy legislation. Legislation that passed through the House, the Waxman-Markey Bill, would reduce U.S. carbon emissions from 2005 levels 17 percent by 2020 and 83 percent by 2050. Similar legislation is moving through the Senate.

In his remarks at the September 22nd, 2009 UN Summit on Climate Change in New York, President Obama stated, “Taken together, these steps represent a historic recognition on behalf of the American people and their government. We understand the gravity of the climate threat. We are determined to act. And we will meet our responsibility to future generations.”

Internationally, the Obama Administration is engaging allies and partners toward a global strategy to combat climate change on a number of fronts.  We are aggressively seeking an international agreement through the UN Framework Convention negotiating process.  We have established an invigorated dialogue among 17 of the largest economies through the Major Economies Forum on Energy and Climate.  We are elevating climate and clean energy to a top tier issue in key bilateral relationships, including with Turkey.

Turkey also has demonstrated its determination to contribute to the global effort on climate change by ratifying the Kyoto protocol and by making renewable energy one of the main pillars of its energy strategy.   

The US government is actively supporting Turkey in this area. In April this year, former Energy Minister Guler and Leocadia Zak, Acting Director of the US Trade and Development Agency, signed an MOU on energy efficiency, renewable energy technology, and clean coal technology.  Currently, four projects stemming from that MOU are at various stages of development.  OPIC, our Overseas Private Investment Corporation,  is also exploring ways to support development of Turkey's renewable energy sector, including one promising project for solar panel manufacturing.  Finally, in June, the US Department of Energy plans to hold a regional conference on energy efficiency here in Istanbul.

This is an historic time.  Never before has global prosperity risen so rapidly and broadly.  The United States will continue to work with Turkey to ensure that we and our partners in the region and the world have the resources to continue this growth for decades to come.

Thank you.