Top energy official Warlick explains US position on future global energy equations
Recognized as the “Olympics” of the oil and gas industry, Istanbul hosted the 22nd World Petroleum Congress (WPC) last week. Between July 9 and 13, high-level executives from leading energy companies and 3,000 delegations from more than 90 countries attended the congress, the theme of which was “Bridges to our Energy Future.”
Mary Burce Warlick, a senior official from the Bureau of Energy Resources at the US Department of State, was in attendance. Warlick is the principal deputy assistant secretary for the bureau, and also acting special envoy and coordinator for International Energy Affairs. Warlick, who was in Istanbul for the first two days of the event, attended several bilateral meetings including some with Turkish energy officials.
Speaking exclusively to Dunya Executive, Warlick discussed global energy equations. Stating that they are encouraged and excited by all the important strategic work that Turkey is doing to look to develop its energy resources, Warlick said: “We are very grateful in addressing broader energy security and diversification across Europe and the region.”
What was the main topic of discussions you had with Turkish energy officials?
We got a very good opportunity to talk with Turkish energy officials about their plans, just as the Energy Minister [Berat] Albay- rak spoke last night at the opening ceremony, for continuing to develop the energy sector, really serving in Turkey and really serving an energy hub in a sense in terms of being able to ensure supplies for other countries in the region including a crossroad.
For example, Turkey has been a very strong supporter of the Southern Gas Corridor, specifically the Trans Anatolian Pipeline (TANAP), which will be one of two components in the Southern Gas Corridor. That project is approaching completion and expected to be completed by the end of 2018. The project will deliver an additional 6 billion cubic meters (bcm) of gas specifically to meet Turkey’s domestic needs. Certainly we recognized that Turkey is a growing econ- omy with growing energy demands and it is absolutely essential to continue to find ways to meet these demands. At the same time, TANAP is also going to be creating ways in which its gas from the Caspian-developed offshore Azerbaijan is then going to be brought across Southern Europe – and then eventually through Greece and Albania to Italy. So in energy security terms, it is a very important contribution. Turkey is also looking at other ways of diversifying its energy sources by looking to build new nuclear power plants and installing new energy import facilities. Turkey already has one and made a decision to go for a second FSRU [Floating Storage Regasification Unit]. These terminals enable Turkey to import energy from across the world. Certainly we hope that Turkey will also be importing additional US energy supplies as well.
What is the importance of Turkey in terms of energy security?
The Southern Gas Corridor is a good example. This project originates from developments of gas resources at the Caspian, brought through Azerbaijan and across through Turkey and then connecting with the Trans Adriatic Pipeline through Greece, Albania and into Italy. This is the reason that this pipeline is important as it will bring additional volumes of gas into Europe to help meet the entire region’s needs. It will also bring a new and diversified source of gas into Europe. Europe is still quite heavily dependent on gas from Russia coming through Ukraine, Belarus and so on – and we think Russia should continue to be an important part of the equation of gas supplies into Europe. But it is also important in energy security terms that all countries and regions look for ways to diversify their energy sources so they are not reliant on a single source of gas. This is important for the region in energy security terms. And to an extent to which Turkey is also going to be developing additional energy facilities. Turkey is also looking at supporting the Turkish Stream, the pipeline that will come from Russia.
Looking to build new nuclear power plants, Turkey has also made a decision to build a second FSRU, which will enable the country to import energy from across the world. We hope that Turkey will also be importing additional US energy supplies as well
Turkey is surrounded by Caucasian, Middle East, Iran and Turkmen gas. These are complementary but competitive sources. Does this cause a problem?
It is important that countries look for ways to diversify their energy imports in a way that first of all meets their energy demands. With the growing economy, Turkey’s
energy demands will also continue to grow and it also understandable that like any country Turkey is looking for a variety of sources from which to support its energy needs. That’s why it was also interesting to hear Energy Minister Albayrak speaking about Turkey’s intention to continue to support the development of pipelines like the Southern Gas Corridor, to look for ways in which it can import more energy, to invest in the development of new power supplies including the renewable sector and the nuclear sector – and also to look for ways to significantly enhance its ability to store gas. So I think Turkey is approaching its energy diversification in a particularly strategic way.
Does the negative outcome of the Cyprus talks threaten energy security in the region?
I know that a discussion of a potential Eastern Mediterranean Pipeline is in the very early stages. I think what it represents is really an indication of just how significant the resources are in the Eastern Mediterranean. You can see the Zohr gas field, which is in offshore Egypt and a significant find, the Eni-made discovery now in the process of being developed, or if you look offshore Israel to the Tamar natural gas field, where US company Noble Energy is now working with the Israeli firm to develop. Offshore Cyprus also appears to have some potential for significant resources and Exxon Mobil, for example, is planning to begin exploratory drilling relatively soon to get a better handle on what resources are available there. We think all of these reserves and the development of them is important and they can really play a constructive and positive role in addressing the energy needs of the region. In many respects it can also help to support broader improved relations among countries as well, as they look for win-wins in ways in which stronger energy supplies can meet international security interest.
Where are the global energy equations heading?
Many countries have significant potential that has not yet been developed and obviously requires significant investment to do so. We have to recognize that the oil price environment today is such that companies need to take a very close look at where they want to invest and how they believe they can scale-up those resources. So we believe that, and we heard it last night from Mr. Albayrak as well, oil and gas will continue to be an important part of the overall energy equation globally. But at the same time we see strong positive trends with respect to increased investment in renewables. In some countries there is an interest in developing nuclear energy as well, which is the case here in Turkey. We also see growing attention to issues like energy efficiency and the cost of some of these alternative energy sources are falling and becoming more competitive.
What I think we can see emerging is a sort of more diversified set of options in terms of energy supplies. The United States administration has made very clear its strong support for all of the above in its approach to energy. We are looking to support our energy resources in the US and working to presume markets abroad. I think it is a very positive sector with lots of potential.
What is the US role in relation to the energy equations in the region?
The United States is highly committed to supporting the efforts of countries such as Turkey and other countries throughout the region and Europe in addressing their energy security needs. So we have been active components in supporting to see the Southern Gas Corridor project move forward.
So we work very closely with the governments of Azerbaijan, Turkey, and with all the governments along the path such as Greece and Albania as well – and with companies of course in the concern that the project moves forward. We are also looking at ways in which we can ensure that the gas that flows through the southern corridor can also be brought up from the south into other countries in the region. I am going to Sofia on Wednesday to meet with Bulgarian officials about an interconnector that will bring initially 1 bcm of gas from the Trans Adriatic Pipeline up into Bulgaria. We are hoping that project will move forward because if successful it will also present an opportunity once more gas is produced in the Caspian to also supply gas for other countries in the region including the Balkans and further up. We are highly engaged with governments throughout the region and certainly with officials in Brussels as well at the European Commission to support infrastructure projects and interconnection projects relating to the supply of gas and electricity that will really meet the energy security interests of this entire region. We are here to show our support but it is also an opportunity to meet with other officials who are visiting while we are here. We also look forward to working with Turkish companies as new opportunities emerge for US companies to export energy into this region.
Exxon Mobil is planning to begin exploratory drilling in Cyprus. These new reserves can play a constructive and positive role in addressing the needs of the region and can help to support broader improved relations among countries as well