Thank you for inviting me to speak to you today. It’s a pleasure to work with STEAM and Mr. Haldun Atıf Danışman. I’m honored to share the stage with Mr. Raiser, who is a true expert in his field. Minister Yıldız, Mr. Yılmaz – I’m pleased to be here with you today and look forward to your remarks.
The theme of this event is “Shifting Dynamics” and there are some very important shifts taking place in the energy world today. The drop in global oil prices has affected consumers, producers, and investors. The United States has re-emerged as a major oil and natural gas producer and will soon begin exporting liquefied natural gas. The impact of climate change – which is driven by our energy choices – is becoming more apparent each day.
In the midst of these shifting dynamics, however, some things have stayed the same – including cooperation between the United States and Turkey on energy issues.
The bilateral relationship between our two countries is broad and deep. And energy cooperation has long been an important part of the U.S.-Turkey alliance. Twenty years ago, the United States and Turkey – together with Azerbaijan, Georgia, and the private sector – started discussing the Baku-Tbilisi-Ceyhan, or BTC, pipeline. It was called the “project of the century” at the time. Now, thanks in large part to Turkish and U.S. cooperation, it is a reality. The BTC pipeline is critical piece of infrastructure for global energy markets. In 2014 alone, the BTC pipeline brought more than 250 million barrels of oil from the Caspian Sea to world markets.
Just as the U.S. and Turkey partnered to bring Caspian oil to world markets, we are now working together on another energy project – the Southern Gas Corridor. The size and scope of the Southern Gas Corridor is impressive – it involves six countries, 11 international energy companies, 3500 km of pipelines, and more than $40 billion in investment.
The United States fully supports the Southern Gas Corridor because it will bring true energy diversification to Turkey and Europe. How does it bring true energy diversification? By transporting new gas via a new route to Turkey and Europe. It is more than a series of pipelines – it is a framework to increase energy security in Turkey and Europe.
Turkey’s commitment to the Southern Gas Corridor has been remarkable. Turkish Petroleum is the second largest shareholder in the Shah Deniz II gas field. Turkey’s Petroleum Pipeline Corporation – BOTAŞ – is the second largest shareholder in the Trans-Anatolian Pipeline or TANAP. BOTAŞ is also a customer for the Southern Gas Corridor and will purchase 6 billion cubic meters of natural gas annually. Put simply, the Southern Gas Corridor would not exist without Turkey’s leadership and support.
Recently, we have seen significant progress in the project. Drilling of the offshore wells is moving ahead. Billions of dollars of contracts have been awarded. In March, the Presidents of Turkey, Azerbaijan, and Georgia – together with representatives from the United States, Europe, and the private sector – gathered in the eastern Turkish city of Kars for the TANAP groundbreaking ceremony.
In short, the Southern Gas Corridor is moving ahead. When it is completed, Turkey and Europe will enjoy the benefits of increased energy security.
The Southern Gas Corridor remains a top priority for the United States. At the same time, we understand that energy security requires a holistic approach. It is not enough for us to focus exclusively on oil and gas supplies. As we look to the future, the United States is committed to working with Turkey on all aspects of energy security. There are three areas where we hope to increase our cooperation: 1) energy efficiency; 2) market reforms; and 3) renewable energy.
Energy efficiency is a key component of energy security. In recent years, the United States and Turkey have conducted a joint project on energy efficiency in industrial zones. In April, the U.S. government and U.S. companies participated in the International Istanbul Smart Grid Congress. We look forward to building on this cooperation in the future.
We also hope to work with Turkey on additional energy market reforms. Turkey has taken important steps in recent years to privatize power generation and distribution. It also has announced plans to reform its domestic natural gas market. The United States supports these reforms because flexible, transparent and competitive markets strengthen energy security.
As Vice President Biden said here in Istanbul in November, “The United States stands ready to help Turkey realize its energy potential. This will require the development of competitive gas markets to attract private investment, improve infrastructure and strengthen Turkey’s ability to become a gas hub.” Additional reforms will not be easy, but they are important for Turkey’s long-term energy security.
In addition to these market reforms, the United States supports Turkey’s goal to produce 30% of its electricity from renewable sources by 2023. This is an important goal because increasing the use of renewables in Turkey will reduce two things – energy imports and emissions. By reducing energy imports, Turkey’s energy security will increase. By reducing emissions, Turkey will contribute to global efforts to combat climate change.
As Secretary Kerry has stated, “the solution to climate change is staring us in the face. It’s energy policy. If we pursue a global clean energy economy, we can cut dramatically the amount of carbon pollution we emit into the atmosphere and prevent the worst impacts of climate change.”
The United States and Turkey have taken important steps together to promote renewable energy. In November 2014, Secretary of Energy Moniz and Minister Yıldız signed a Memorandum of Understanding on Wind Energy Cooperation. We hope that the MOU will help U.S. companies in Turkish market and help Turkey reach its renewable energy goals.
In a world of shifting dynamics, it is more important than ever that the United States and Turkey cooperate. This is particularly true for energy issues. We have a strong record of success and there are many exciting opportunities in front of us –from the Southern Gas Corridor to market reforms and renewables. The United States looks forward to working in partnership with Turkey to achieve our shared goals. Thank you and enjoy the conference.