Ecali Club
November 5, 2018 at 7:30 pm
Καλησπέρα σας, Good Evening. It’s great to be back at the Ecali club, with such a distinguished audience from Greek business and politics.
But I want to start by offering a huge thank you to you Simos for the warm introduction, for our close partnership, and the truly important work of the American Hellenic Chamber in enhancing U.S.-Greece business cooperation.
We deeply appreciate Simos’ leadership and the impressive feat of the whole AmCham team in accomplishing the U.S. Pavilion at the Thessaloniki International Fair. It was, as Simos and I always (inaudible) each other, a true landmark in the U.S. Greece relationship. We saw there several significant announcements on energy relating to the FSRU in Alexandroupolis, government plans to import U.S. LNG into Greece, and progress on offshore exploration, so it’s great to see all our work together at TIF and at last year’s AMCHAM-hosted Alexandroupolis Energy Conference continuing here tonight.
I’d also like to thank the Ecali Club, Ernst and Young, and the Bank of Greece for organizing tonight’s discussion.
And I was especially glad to have Paul (inaudible) speaking before me because as I think you will that you’ll see there is a very high degree of convergence between what he had to say and what I’ll be saying.
The topic of energy is one that I have spoken about on many occasions. It remains a top priority for me as Ambassador, for the team at the U.S. Mission to Greece, and for the whole U.S. government.
I want to start in this context by emphasizing how fast the international energy picture is changing. Today the United States is the world’s largest oil and natural gas producer, something unthinkable only a decade ago when U.S. manufacturers talked about relocating offshore to escape high natural gas prices. This energy revolution is real and it will continue, and it’s had a dramatic impact on the U.S.
Since 2005, the United States economy has expanded by more than 17 percent while cutting carbon emissions by 14 percent —even while global emissions rose by over 20 percent in this same period.
Our energy revolution has also been diverse, and that diversity has come through private sector entrepreneurship and innovation, not state-led policy. The United States is not just the world’s largest oil and gas producer now, we are also the world’s second largest producer of renewables, and the hub for an increasingly a vibrant energy trading market, a point that I was reminded of last month when I was in Chicago and had the opportunity to visit Invenergy, a wind and solar company whose North American HQs looks like a NASA or U.S. military command center more than an American corporation.
The American energy expansion is having effects that transcend segmented regional energy markets. While much of the gas from the United States is going to meet exponential demand growth in Asia, Europe is also directly affected. This July during a meeting with President Trump, European Commission President Juncker called for increased U.S. LNG shipments to Europe.
Two weeks ago, German Chancellor Merkel announced plans for the German government to co-finance the construction of a €500 million LNG terminal in northern Germany, which will open up that market for LNG from the U.S. and other international suppliers.
Greece’s emergence as a serious player in the European energy sector has been developing for many years, but it has gained real momentum in the last two years as key projects moved from vision to implementation and now completion. And importantly, Prime Minister Tsipras has embraced Greece’s role as a European energy hub. In this regard, I have been struck by the very close alignment between U.S. and European energy strategies on this specific point, namely Greece’s role as a regional hub, and ensuring greater energy security for all Europe.
And in this context, I think back to remarks I gave early in my tenure as Ambassador to Greece at an Atlantic Council conference in Istanbul, where I focused on Greece’s potential, even then, as a regional energy hub. In that speech I spoke about the shoots of progress I saw growing in this sector, noting that at the time the TAP pipeline was 20 percent complete and renovation had just started on the Revithoussa LNG terminal.
On these two projects alone the situation today has changed dramatically. The TAP pipeline is now 85% complete in Greece. It is on track to start commissioning next year and to begin deliveries in 2020. The TAP project was made possible through the close cooperation that the TAP consortium had over many years with multiple configurations of Greek national and local governments to constructively and patiently address construction challenges.
It is also worth noting that TAP is the final leg of the more than $40 billion Southern Gas Corridor – one of the world’s most complex and important gas infrastructure projects – which has been supported by multiple U.S. administrations and for many many years.
Revithoussa is a similarly positive story. The terminal, which I visited last year when it was still possible to walk inside the massive, new storage tank, is set to be completed in the next few weeks.
The upgrades will increase storage capacity by 70 percent and delivery capacity by 40 percent, allowing the facility to supply more than seven billion cubic meters per annum.
This expansion makes it economically feasible for large ships to offload LNG in an efficient manner. More importantly, it serves as an important hedge for both Greece and the broader region – like energy “shock absorber” if you will, for South East Europe.
And i alluded earlier to the agreement signed at TIF for DEPA to participate in the floating storage regasification project in Alexandroupolis, which will further expand options for liquefied natural gas, and enjoys the strong support of the United States Government. I was pleased to see that Gastrade last week launched an FSRU market test.
We are confident that Greece ultimately will include U.S. LNG in its future energy mix, which offers another way to diversify risk and follows up on a pledge that Prime Minister Tsipras made in his visit last year to Washington. Regardless of the source, these LNG terminals ensure that Greece and its neighbors have multiple options, enhancing both the resilience of the distribution system and lowering costs for the consumers through increased competition.
Both TAP and the LNG terminals serve as a gateway for gas to the wider Balkan region, either through existing infrastructure that is not being fully utilized or through new projects. For instance, on multiple occasions – including at the TIF – Bulgarian Energy Minister Petkova has said that construction on the Greece-Bulgaria Interconnector will begin by the end of this year, which will further expand regional connections and strengthen economic ties. And I was glad to hear both Prime Minister Tsipras and Prime Minister Borisov reaffirm this target at last week’s EU-Arab Summit here in Athens.
It’s fashionable among energy policy wonks to focus on gas, but there is a much larger and broader energy story in Greece today that is worth remembering. Greece has significant refining capacity and, with its expansive shipping links, has long exported about half of its production to markets throughout the region.
We are also excited about the possibilities on the upstream side, with the recent approval of joint exploration off Western Crete by ExxonMobil and its partners Total and Hellenic Petroleum.
Greece is part of an Eastern Mediterranean basin that is reshaping the European energy landscape and redefining regional relationships as former foes become partners and governments, led by Greece, seek to build on energy to catalyze economic cooperation and reinvigorate diplomacy.
During his first visit to Athens a couple months ago, State Department Assistant Secretary for Energy Resources Frank Fannon noted that Greece is a critical energy partner of the United States and a champion for European energy security, helping deliver on our shared goal of deepening energy security through diversification of routes, sources, and supplies.
He also reiterated our strong support for Cyprus’ right to explore and produce energy in its own economic zone, saying that “We, of course, want all parties to find agreement and work things out as amicably as possible, but it’s certainly Cyprus’ economic zone to manage their resource.”
He also expressed our unwavering opposition to the Nord Stream 2 pipeline, and our support for continued gas transit through Ukraine. Nord Stream 2 and a multi-line Turkish Stream would give Russia the technical capability to cut off gas to Ukraine. In addition, it’s important to recognize that businesses operating in the Russian energy pipeline sector are engaging in a line of activity that carries significant U.S. sanction risk, and that also goes for Nord Stream 2. This is a political project — not an economic one – that is contrary to European and American interests.
So, Greece finds itself in a critical geostrategic area, where its positive actions in achieving diversity of energy sources to Europe also ensures its leadership role in the region, and both the U.S. and the EU strongly support Greece in taking on this role.
And it’s not just about hydrocarbons. With abundant sun, wind, and geothermal resources, Greece is also a leader in the renewable sector, which accounts for already more than 35 percent of its electricity generation. U.S. companies like GE have played a prominent role in this sector, while the Greek company GEK Terna has taken its wind expertise to the United States.
And I know for a fact that there are other U.S. companies taking a new look at Greece’s renewable sector based on the government’s renewed focus on technology and the improving the situation economically in the country – so now is the time for clear government signals to investors.
The multiple privatizations underway in Greece and unbundling of market players are further transforming the energy sector, creating opportunities for new investments and innovation.
One of the clearest indications of the dynamism of the Greek energy market and the country’s expanding role as a hub for the region is the recent creation of an Energy Exchange in partnership with the Athens Stock Exchange, the EBRD and some of the key power companies in Greece. The electricity exchange is already up and running, and the Energy Exchange Group is now looking to expand to gas trading and a market for environmental certificates.
From a foreign investment standpoint, a key facet of developments in the Greek energy sector is that it is enthusiastically supported by all the leading political parties, ensuring continuity across elections.
And in this regard, I was very glad to hear at the EU-Arab Summit that opposition leader Mitsotakis’ message on energy investment reinforced what Prime Minister Tsipras was saying about Greece’s regional role.
And the same applies to energy policy. Promoting energy security through the diversification of routes and supplies has become a core tenant of Greek foreign and security policy, and I am confident it will remain so going forward.
It is well understood in both the United States and Greece that energy is more than fuel and technology. It is security. The United States promotes diversification of routes and supplies to ensure that security. Too often, we see energy used as a weapon by others seeking geopolitical leverage.
Energy is tool. It enables work, and underpins all modern economic enterprise. Energy is foundational to economic security, political security, and national sovereignty.
And so my team and I will continue to expand our own energies and continue promoting diversity. This is also why energy is one of the five pillars of our Strategic Dialogue with Greece, which will formally be kicked off by Secretary of State Pompeo and Alternate Foreign Minister Katrougkalos on December 13 in Washington.
So, in this context, we look forward to continuing our work with industry and government partners to support free, fair, and transparent energy markets, and to highlight the opportunities in Greece to expand US investment and to deepen our economic ties. So thank you again for having me here this evening and for your attention. Efharisto polu!
