SECRETARY POMPEO: Thank you, Dan.
Thank you all for joining me.
I see you standing in the back.
It’s like church, there’s empty pews in the front if you want to come up and grab
a seat.
I do think – is there anyone from the Petroleum Equipment Suppliers Association here?
I’m pretty sure I’m the only former member to ever serve as Secretary of State, so you
should put that right on the front of your web page.
I think that’s legal.
Good evening, everyone, and thanks to you all for being here.
I heard CERAWeek has been just spectacular.
It’s quite a crowd.
I’ve seen many of you here.
I’ve had the chance to get to know many of you as well.
People call Washington “the swamp,” and they call Houston “the bayou.”
Now, I will tell you that they’re both the same in August in a suit and a tie, but there
is – there’s one really big difference.
One of the two works desperately to seek rents from its citizens, and the other works desperately
to create wealth for the people who live there.
I will leave to you which is which, but suffice to say, I’m glad to be in Houston.
It’s great to join so many foreign dignitaries and business leaders as well that operate
all around the world.
I’ll certainly spend a great deal of time tonight focused on the United States and the
things I’m doing as America’s most senior diplomat, but it’s wonderful to see folks
from all around the world who are involved in this important endeavor.
Dan, thanks for your kind remarks.
I’ve read Dan’s work for an awfully long time.
You all are familiar with The Prize, but your ideas have informed me more broadly than that,
more than just about energy.
I’ll talk about The Commanding Heights.
That’s a book that was written now 20-odd years ago, which I read in hardback.
I paid full price, Dan.
MR YERGIN: Thank you.
SECRETARY POMPEO: But I think it’s important for what it is that I’m doing as Secretary
of State.
As Dan said, I spent a fair amount of time in the oil and gas industry.
I ran a small company; it was called Sentry International.
We made and sold mud pumps and swivels and hook blocks and downhole equipment, and we
distributed sucker rod, so I know the industry well, the whole nine yards in oil and gas.
I spent a lot of time in Midland, Odessa, Longview, and all kinds of – Oklahoma and
Canada.
Is there anybody from Lufkin here tonight?
So my partners and I swore that we would listen to the quarterly conference call for Lufkin
every quarter until they mentioned Sentry as destroying their business.
We were small enough it never happened, but we continued to live in hope that we could
compete and grow and prosper in the way that so many of you have.
My time as Secretary of State isn’t that far from – removed from what I did running
that small company headquartered in Wichita, Kansas.
The reason why is something you know; it’s obvious for all of you in the audience.
Because we are now in the new age of discovery that history will remember as society changing
in scale, and global changing.
Instead of sailing off to new lands the way it was done old-school by Columbus and Magellan,
we’re making discoveries right here in the United States of America right under our feet.
And you all know that here in America we have the free enterprise system to thank for this
modern-day miracle.
And I want to talk about why that matters.
Things like horizontal drilling and fracturing, the Shale Revolution, the oil derricks that
dot the landscape all throughout the Permian Basin matters.
New drilling technology and greater energy output are transforming American life and
lives all around the world in the same way that the changes did when Spindletop first
took place back in 1901.
It was a game-changer, and what this industry is doing today is game-changing as well.
I travel the world some, and when I do and meet with my foreign minister counterparts
or presidents or prime ministers, they’ll ask me how did America come to do this.
How did you literally blow out American energy production to go from a place of scarcity
to a place of massive exports.
And I tell them that they should simply look at places like Midland, Texas, people that
are willing to work their tails off, often without a college education, earn six-figure
salaries and they run businesses themselves that have ‘Now Hiring’ signs hanging on
their front doorstep.
Look at places, too, like Kaktovik, Alaska, the polar bear capital of the United States
of America.
Their small native community is now working diligently to tap into the resources that
they have under their feet.
And you see this – you see this in towns like Wichita, Kansas, all across America,
that the economic struggles, the lack of jobs that took place for a decade no longer have
to be.
We can continue to be the engine – and the energy – and as we can continue to be the
engine that succeeds in building out the United States of America.
Now, recent history should remind us all that we’re not just producing energy for Americans.
It’s never truly been the case, but less so now than ever before.
Today, you all know we’re exporting crude oil at levels that were previously unimaginable.
It took two partners to achieve that.
It took our shale producers and risk-takers, and it took Congress lifting the oil export
ban in 2015, which I voted for.
You should all see me as I walk out and say thanks.
(Laughter and applause.)
In August of last year, the United States surpassed Russia as the world’s top producer.
When it comes to global supply, U.S. oil production rose at the fastest pace in history, the largest
one-year increase in oil production that the world has ever seen.
That’s awesome and it’s important.
After all, only about a decade ago, we did live in a world where we imported 60 percent
of our oil, and now we’ve shrugged off that oak of energy dependence, not just thanks
to oil, but we’re doing the same in natural gas today as well, and I know there’s more
and even a brighter future there.
We shouldn’t forget, too, about the incredible growth in renewable energy.
I’m confident that the American system – leaving the commanding heights in the hands of private
risk-takers – will allow that industry to continue to grow and export as well.
I had the chance to meet with Secretary Kissinger about two months ago, and I was asking about
a handful of things, and he, 45 years ago, brought foreign ministers to his office to
figure out how the world was going to deal with energy scarcity.
A couple weeks back, I brought Dan into my office to talk about how the heck we were
going to make sure we could get it from the American interior to the coast so that we
could deliver this to foreign partners who are demanding this.
And there, I want to turn to the real focus, the main topic, what our newfound energy abundance
means for American foreign policy, what you all can help me and President Trump deliver
to the world.
It’s really – it’s very simple: Our plentiful oil supplies allow us to help our
friends secure diversity for their energy resources.
We don’t want our European allies hooked on Russian gas through the NordStream II project
any more than we ourselves want to depend on Venezuela for our oil supplies.
This need, this desperate need for diversification is why we exported more crude oil last year
to countries all across the globe.
Places as diverse as India, Japan, China, the Republic of Korea, Italy, Ireland, the
United Arab Emirates.
The list is long.
It’s why, shortly before the United States made its first LNG shipment to Europe, it
made it to a place that people don’t think about, the country of Portugal that now has
access to American energy resources.
You should all know – and I hope you have seen this.
I’ve been doing this now all of 11 months, so I’ve got it all figured out.
I hope you all have seen that my team at the State Department is working hard to expand
these relationships.
Last April, we formalized a commitment to bolster Vietnam’s energy security.
In October, the State Department hosted its first dialogue with Australia on energy security.
And these operations, these opportunities will just be the beginning.
But truth is, here’s my point: We’re not just exporting American energy, we’re exporting
our commercial value system to our friends and to our partners.
The more we can spread the United States model of free enterprise, of the rule of law, of
diversity and stability, of transparency and transactions, the more successful the United
States will be and the more successful and secure the American people will be.
Our model matters now, frankly, more than ever in an era of great power rivalry and
competition where some nations are using their energy for malign ends, and not to promote
prosperity in the way we do here in the West.
They don’t have the values of freedom and liberty, of the rule of law that we do, and
they’re using their energy to destroy ours.
Take China, just for starters.
China’s illegal island-building in international waterways isn’t simply a security matter.
By blocking development in the South China Sea through coercive means, China prevents
ASEAN members from accessing more than $2.5 trillion in recoverable energy reserves.
To contrast, the United States Government promotes energy security for those Southeast
Asian nations.
We want countries in the region to have access to their own energy.
We want to help them.
We want to create partnerships.
We want transparent transactions, not debt traps.
We explore responsibly.
China doesn’t play by that same set of rules.
Its values are simply different.
You see that in places as diverse as Africa, where they often ship in their own labor,
creating jobs for Chinese workers rather than for those in the local economy.
It’s using the debt trap which I referred to just a moment ago to put these countries
in a place where it isn’t a commercial transaction, it’s a political transaction designed to
bring harm and political influence in the country in which they’re operating.
Many of you may not know this: China’s largest creditor today – excuse me, Latin America’s
largest creditor today is China.
And we all know the story in Russia.
It invaded Ukraine to gain access to oil and gas reserves.
It in turn deprived Ukraine of the possibility of developing those resources for itself and
using its pipelines and its networks to bring energy to its own people.
Rather, it uses those pipelines to put pressure – political pressure – on the people of
Ukraine.
The story isn’t too terribly different in Syria.
Assad covets the oil fields to the east of the Euphrates River in the eastern part of
the country.
He wants those resources, he wants those wealth to continue to impoverish the people of Syria,
and use those resources for himself and the cronies who are around him.
Perhaps there’s no clearer example than in Iran.
Iran uses its energy exports to exert undue influence all across the Middle East, most
particularly today on Iraq.
While the United States is working to develop an independent, sovereign Iraq, Iran is using
its energy to create a vassal state.
We have worked hard over the past months to reduce the flow of Iranian crude oil around
the world, to convince the Iranian leadership to protect its citizens and deliver to its
citizens what it is they’re asking for, and to reduce the risk of terror and instability
throughout the Middle East.
There could not be more of a contrast about how America uses its energy resources than
how the leaders of the Islamic Republic of Iran use their.
And finally, as we see in the headlines today, Cuba props up Venezuela’s Maduro regime.
That’s because Venezuela ships 50,000-some-odd barrels of oil today at a subsidized price
to Cuba, providing roughly 30 percent of its overall energy needs.
You all, the wealth that you’re creating here in the United States, can change that.
Look, this is the world we live in.
The good news is that we know how our model is superior.
And as Daniel Yergin wrote in that book back in 1998, it is markets, not governments, that
have proven more adept from the commanding heights.
But our way of life, our business model, and our future aren’t things that we can take
for granted.
There is no certainty that this model will continue.
The Trump administration is working strongly, based on its firmly held conviction that we
must further America’s interests by widening the tools we have available to our diplomats,
especially the tool of American energy abundance.
You all know this: It’s a complex, interconnected world.
You have partnerships with companies all across the globe, and the United States has to compete.
We have to create energy security for those all around the world.
And we can do this.
We can do this by partnership, by American diplomats working to ensure that markets are
open for American businesses all around the world.
There are three ways.
First, we can do this through facilitating investment.
We do that by creating the engine for capital formation here in the United States.
Foreign firms have invested more than 100 billion in the U.S. shale sector just since
2008.
Twenty percent of these investments were joint investments between foreign companies and
American companies.
We can continue to promote that.
You won’t see this in many other places, but there are places.
In Southeast Asia, the United States is the single largest source of cumulative foreign
investment.
And the State Department has played an important role in helping investors make good decisions
and getting access.
An example is our program about the Indo-Pacific being open.
We call it the Asia Edge Initiative.
It helps Indo-Pacific partners import, produce, and deploy their own energy resources.
The second way, other than investment, is we can promote energy security by encouraging
countries to partner with the United States all around the world.
And I’ve seen this at work.
We’re reminding them that we’re simply better to do business with than Russia, China,
or Iran.
Our deals come with no hidden strings attached, our contracts are clear, our motives unambiguous.
On recent trips, my State Department colleagues and I have been touting the high standards
of transparency, responsible financing, and adherence to the rule of law that American
companies bring along with them.
It’s what you all are known for, what American businesses are known for.
I’ll give you a good example.
I was in Warsaw now – oh, goodness, it must have been three or four weeks ago.
I was with Foreign Minister Czaputowicz.
He and I were discussing how we can diversify the Polish energy supply, not only with energy
but with routes and with the types of fuels that we can deliver to them.
We’re making progress.
We’re accomplishing parts of that mission.
We’re doing it with the help of countries[1] like Sempra Energy, like Cheniere and Venture
Global LNG.
They’re helping destroy the Russian monopoly on Polish energy.
And although it’s certainly the case that our firms will benefit financially, this isn’t
just about dollars and cents for American companies.
It’s about America’s national security.
It’s about Russian influence peddling and the need to stop it.
We must bring this to an end, and you all can be an important part of that.
It was Winston Churchill who once said when it comes to energy security, quote, “safety
and certainty … lie in variety and in variety alone.”
That may not be quite true, but it’s certainly an important thing for each of us to think
about and American diplomats to help you deliver on.
We commend countries like Croatia for what they’re doing with the LNG terminal on Krk
Island, as well as Lithuania for taking similar steps to diversify and acquire energy away
from the Russian footprint.
That brings me to the third and final way that the State Department can help achieve
this national security through energy abundance.
We’re pushing bad actors – those who use their energy towards malign ends – off the
target.
I talked about Iran.
You know its role in global energy markets.
We know that role is diminishing.
Its exports have tanked due to our pressure campaign, and we have every intention of driving
Iranian oil exports to zero just as quickly as we can.
We’ll continue with sanctions until Iran behaves in the way normal nations do, without
threatening assassination campaigns in Europe, conducting terror campaigns throughout Syria
and Iraq, without underwriting Hizballah.
These are the ways that energy can keep Americans, Europeans, and Western countries all more
secure.
And we’re committed to doing this.
We’re committed to using all of the economic tools at our disposal in Venezuela, where
our sanctions to date on Venezuela kicked in back in January.
We are hoping and working towards a good outcome there.
We need to continue to build our energy security in the ways I’ve described.
We need to roll up our sleeves and compete by facilitating investment all across the
world and encouraging partners to buy from us and by punishing bad actors.
The State Department wants to work with each and every one in this room tonight, American
companies and foreign companies alike.
We want to achieve these goals because we think we have the model that will make not
only America but the world more secure.
In the days ahead, you should know, America will continue to be asked to meet the world’s
energy demand, especially in places like the Indo-Pacific.
Our private partners are essential to that.
The private sector will be absolutely instrumental.
It certainly can’t be done if the commanding heights are handed to the government.
But neither private enterprise nor the federal government can do it alone.
We need each other.
It is American producers, working in tandem with American diplomats, who can create this
stability and prosperity all around the world.
As I close and prepare to take questions from Dan, I want to encourage the rest of the world
to get on board with this project.
Come follow America’s energy blueprint, which is to innovate, not subjugate; to contribute,
not to coerce; to allow markets to command the heights.
At least for the rest of my lifetime, the world will need oil and gas and petrochemicals
to produce gasoline, to produce jet fuel, fertilizers, and pharmaceuticals.
We should consider ourselves pretty darn lucky here in the United States.
We’ve worked hard.
But in the age of the new discovery, our shared ability to provide these things is now greater
than at any other point of history, and we need to keep it that way.
I know that you’ll work alongside, as you should know that America’s State Department
will continue to work alongside you.
Thank you for being here.
May God bless you and may God bless the United States of America.
(Applause.)