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Remarks by U.S. Energy Deputy Secretary Daniel Poneman at the Kazakhstan International Oil and Gas Exhibition and Conference

Wednesday, October 7, 2009
Intercontinental Hotel
Almaty, Kazakhstan

Remarks As Prepared for Delivery

I would like to thank the organizers of the event, the Ministry of Energy and Mineral Resources, Kazmunaigaz, Minister Mynbaev, Mr. Kabyldin, and our distinguished guests. I am honored to be here to join you today and to address this extremely important conference at KIOGE. This is an important conference, not only for Central Asia, but indeed for the world. I also bring warm greetings on behalf of President Barack Obama and Secretary of Energy Steven Chu.  For me it’s a particular pleasure to be back in Kazakhstan to see so many old friends and have the opportunity to meet new friends.

The United States and Kazakhstan enjoy a strong friendship that goes back to the birth of an independent Kazakhstan. As we look back, a patina of historical inevitability has settled over even recent history, but I can tell you that at the time of the breakup of the Soviet Union, things did not look so clear.  At that time I was working at the National Security Council in the White House, responsible for nuclear nonproliferation. Many people saw in the break-up of the Soviet Union the potential beginning of a new and increasingly dangerous era, as the world faced the prospect of four nuclear armed nations: Russia, Kazakhstan, Belarus, and Ukraine. If that occurred, it could have triggered a wave of proliferation of nuclear weapons and weapons of mass destruction that could have ushered in untold dangers, instability, and great risk.

Today, we all know that did not happen. Why not? There were many reasons, but when the history books are written, they will note that President Nazarbayev showed vision and statesmanship by making the firm decision to relinquish the nuclear weapons that Kazakhstan had inherited from the Soviet Union. Not only did he transfer those weapons out of Kazakhstan, but he led Kazakhstan to become to ratify the Nuclear Non-Proliferation Treaty.  And Kazakhstan has continued to show leadership in the areas of nonproliferation to the present day. 

The events from those early days of an independent Kazakhstan speak not only to statesmanship and a desire to minimize the dangers that nuclear proliferation can bring.  It also speaks to the genuine benefits of partnership.  And as with many partnerships, having that strong basis has allowed us to expand our work into other important areas of shared interests – including economic, energy, and diplomatic arenas – even as the friendship between our peoples has continued to flourish.

And here too, the results have been impressive. The United States and Kazakhstan maintain a strong economic relationship, which has been further enhanced by Kazakhstan’s achievement of an investment-grade rating.  In 2008, almost 11 percent of total foreign direct investment in Kazakhstan came from U.S. companies. The United States is committed to continuing to advance this friendship, which brings us to the reason for convening this conference.

Partnership on Energy

This week, we are focusing in particular on energy and that aspect of our partnership.

The prosperity and security of the United States, of Kazakhstan, and of nations all around the globe depend vitally upon energy. Energy courses through every muscle and sinew of the global economy.

Even as we move aggressively towards the building a low-carbon future, we recognize the continued importance of our hydrocarbon resources to the world, as well as the role that oil and gas companies can play in developing the new technologies and methods that will reduce our overall carbon footprint.

And we also recognize that Kazakhstan’s resources play a significant role in world energy markets as a major supplier of oil and gas. Indeed, over the next decade, Kazakhstan is expected to emerge as one of the three largest contributors to non-OPEC oil supply.

Beyond its oil and gas endowment, Kazakhstan has also been blessed with abundant uranium resources.  This has reinforced Kazakhstan’s efforts to develop its own peaceful nuclear energy potential.

Tomorrow, I will join Minister Mynbayev in co-chairing a meeting of the U.S.-Kazakhstan Energy Partnership – an event that demonstrates the importance both our countries place on cooperation in this arena. And may I note that one of the original authors of that partnership, Ambassador Erlan Idrissov, is here today and we’d like to thank him for his service.

Our two nations, indeed every nation, must work together on the full energy agenda – including fossil fuels, renewable energy, energy efficiency, nuclear energy, and the grids and pipelines that bring those energy sources to the consumers that need power, light, and continued prosperity. Working together, we can enhance both our economies and our security.

Regional Cooperation to Develop Kazakhstan’s Resources

At this conference here today, more than 30 different countries from Europe, Asia, and North America are gathered. To succeed, we need to work together. If we do that, the countries of this region will be able to deliver their oil and gas resources to consumers around the world at the same time that they meet the needs of their own populations. 

Cooperation also requires partnership between the governments of the region and the leading international companies that can bring their experience, expertise and equity to our shared enterprise to maximize the region’s energy resources. It has been essential to our collective success to ensure that government interests and those of the private sector and the investors and operators are aligned. In that way, Kazakhstan has attracted more than $40 billion in foreign investments for projects ranging from Tengiz to Karachaganak to Kashagan.

We strongly encourage Kazakhstan and countries throughout the region to continue welcoming investors to participate in future infrastructure developments, including the expansion of the Caspian Pipeline Consortium and the creation of a trans-Caspian transportation system. The United States supports Kazakhstan’s efforts to strengthen existing export routes and to develop new ones by working with countries like Russia, Azerbaijan, and China. 

We also believe that these efforts will be most successful if Kazakhstan and its partners seek to maximize the openness and transparency of their markets. And in this context, we applaud Kazakhstan’s participation in the Extractive Industries Transparency Initiative.

In addition, the countries of the Caspian region can optimize the use of their natural resources by promoting even more efficient use of oil and gas projects through advanced technologies.   There is ample opportunity to reduce technical losses, limit the flaring of associated gas, and make economic use of byproducts.

United States is Pursuing Clean Energy

As we continue to develop oil and gas resources, we must also recognize that the way we produce and use energy is changing - and it must change. The threat of catastrophic climate change is one that presses down on us all, and it demands great ingenuity in building a new energy future.  We do not shrink from this challenge.  We embrace it.  The need to reduce our carbon emissions will only become more important in the years to come.

Addressing the energy and climate challenge is one of President Barack Obama’s top priorities. And we understand that there is important work yet to be done in our nations and all nations.

The United States is actively pursuing clean energy, including new ways to harness the sun, the wind, and the soil. We are also working to reduce the demand for energy through significant investments in energy efficiency. As Secretary Chu often likes to say, we consider energy efficiency not just low-hanging fruit, but the fruit that is lying on the ground, and we need to seize that opportunity.  In order to lead by example, President Obama just this week instructed all agencies of the U.S. Government to set aggressive new targets for the reduction of greenhouse gas emissions by the year 2020.

In addition, when President Obama signed the American Recovery and Reinvestment Act into law earlier this year, the United States made a down-payment on this low-carbon future. The Act provides incentives aimed at doubling the production of renewable energy over the next three years. It will support more than $80 billion of clean energy investments and is expected to create hundreds of thousands of jobs. President Obama is committed to reducing U.S. carbon emissions by more than 80 percent by the year 2050.

…this Region is Changing Too

The people of the Caspian region understand that the world is changing. Countries endowed with supplies of oil and gas have the responsibility to be good stewards of these resources – and of the Earth that we all share. Indeed, prudent management of the world’s hydrocarbon resources is an obligation that falls to consumers and producers alike.
 
As President Nazarbayev has said, “We must strive to encourage East and West not only to move toward each other, but also to encourage them to find a new philosophy, a philosophy which will serve as a tool determining the future of Planet Earth – our common and only shelter.”

Kazakhstan, like the United States, has taken important steps on the path to energy efficiency and security, instituting policies to help diversify its energy mix, and enacting legislation to promote both energy efficiency and renewable energy resources.
 
Here and across the globe there are steps we can take to continue promoting economic development and a clean energy future.  For example, governments are increasingly coming to the view that curtailing fossil fuel subsidies strengthens national investment climates, protects the environment, and helps the marketplace recognize the value of scarce resources.  Many nations have therefore committed to curtail those subsidies, and we would encourage all nations to do the same.

New Partnerships on Clean Energy

Building a new energy future that will benefit all of us will require each of our nations to cooperate in new ways that advance clean energy and efficiency. As part of this process, we also urge the countries in this region to share their experiences in tackling difficult energy challenges, such as attracting energy sector investment and providing electricity to rural areas. 

We can also work together to modernize our electricity systems by promoting smart grid technologies and electricity metering systems, and by improving regional integration and domestic transmission reliability.

One promising area of cooperation is developing new sources of power.  We need to greatly accelerate the deployment of renewable energy resources.  And when it comes to developing large amounts baseload electricity without carbon emissions, we need to think seriously about nuclear energy. 

President Obama has called for a new framework for international cooperation in the civil use of nuclear energy, so that all nations can enjoy the benefits of the peaceful use of nuclear energy without increasing the risks of proliferation. This framework could build on commercial models that exist today to ensure reliable access to commercial nuclear fuel services for all those nations that embrace nonproliferation commitments.  Confidence will come in the form of dependable fuel services that address the legitimate needs associated with the peaceful use of nuclear energy.

As part of our mutual commitment to nuclear security, the United States and Kazakhstan are continuing our cooperation to secure vulnerable nuclear material, prevent nuclear smuggling, and strengthen our respective export control systems.

Conclusion

And so the time has come for us to build a new energy future – a future where we develop and use energy efficiently, wisely, and cleanly.  We cannot reach this future alone. We can only reach it together. We must engage with friends, partners, and allies around the world, beginning with those who have gathered here today at the KIOGE Conference, to achieve our energy goals.

That is our opportunity.  That is our responsibility.  The American people look forward to working together with those here and around the world to seize the day and fulfill our promise to the future.

Thank you.