Speech: Vice-President Maroš Šefčovič on the significance of trans-Atlantic energy cooperation between the EU and the US

Speech by Vice-President Maroš Šefčovič in charge of Energy Union , at the US Chamber of Commerce in Washington, D.C.

Excellencies, Ladies and Gentlemen,

It is an honour and a great pleasure to speak here again at the US Chamber of Commerce in Washington DC.

Before I go into our specific topic, I would like to say that my visit to Washington has reaffirmed my conviction of our very strong and very important trans-Atlantic relations. I have no doubt that we will continue to work closely together over the course of the coming years, as we have in the past. The role of our economies, our enterprises; be it small, medium or big size matters a lot for these relations.

There are many reasons why we cherish so much these important relations. One of them is the cross-Atlantic trade, which has already created millions of jobs on both sides. Some 7 million jobs in the US were generated by EU companies; and 2.6 million additional jobs in the US depend on trade with the EU. Our Single Market is the most profitable sales region for the US. That may explain why US investment in the EU is three times higher than its investment in all of Asia. EU investment in the US is around eight times the amount of its investment in India and China combined. Furthermore, 80 % of the foreign direct investment in the US comes from Europe! And just to add, the trans-Atlantic economy generates $5,5 trillion of commercial sales per year; out of this amount, US companies alone generate more than the half it, namely 3 trillion USD (in 2014).

I have been asked to speak about the energy sector more in particular. As you know, I am just coming directly from Houston, Texas, where I attended the CERA week. I was tremendously impressed by this international fair and the high level of discussion and the business leaders there. It was also interesting to note that the conference was held in Texas, a state which has a rather diverse energy mix. What I saw reaffirmed my belief in the great potential of us working together on energy.

Let me remind you that it was the European Coal and Steel Community of the 1950s, which triggered the entire European integration project after the war, bringing peace and prosperity to the "old continent" and paving the way to the development of the European Union as we now know it. It was the result of bold leaders who understood that by tying our energy resources together, we are less likely to, and less capable of, turning arms against each other. This project resulted in the longest period of peace Europe has ever known.

I believe that energy cooperation can still create trust, prosperity, stability and neighbourly relations among countries and communities. It was the current President of the European Commission, Jean-Claude Juncker, who has set as one of his top priorities the establishment of the Energy Union, and appointed me to take charge of it as one of his Vice-Presidents. I would describe its main features as follows:

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  A single European energy market allows us to increase our security of supply by allowing energy to flow freely across our borders, therefore offsetting any oversupply on one side of a border with any supply deficit on the other.

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  It creates a far more competitive market across the EU, allowing consumers to choose their suppliers from across borders and enjoy better prices and services.

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  It allows us to achieve our climate targets much more efficiently by setting common targets and negotiating more effectively with our global partners.

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  It allows us to steer our research and innovation, allocating greater resources and creating more synergies. I will get back to this point in a moment.

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  It allows us to better negotiate trade agreements with our external partners, given that Europe relies on import for about half of its energy needs. Currently, we import more than 1 billion euros per day for our energy.

Our current imports are still fairly centralised to a few traditional suppliers, making some of our Member States overly dependent and thus vulnerable. In this context, I see American gas as a tremendous opportunity to diversify our gas imports, which also create jobs on both sides of the Atlantic. To achieve this, I believe that the current licensing system in the US could be improved and I am encouraged from my first contacts with the new Secretary of Energy, Mr Rick Perry. First LNG deliveries started crossing the Atlantic arriving in Europe. For us, this is great news because it's exactly the kind of diversification we were aiming at. And for your economy it could be a significant source of revenues, tapping into the growing demand for energy around the world. The volumes are still low but I expect they will grow in the coming years.

When it comes to energy trade, it is important to note that we share a common approach to global energy markets - that they should be open, competitive and transparent. On both sides, we actively encourage the diversification of energy supplies and routes. This convergence has been reflected in our regular discussions at both ministerial and working levels, in the framework of the EU-US Energy Council which was founded in 2009. The Energy Council has been the main forum where the EU and the US were sharing strategic information on global oil and gas market developments, on changes in key producing and transit areas as well as on the enhancement of technology co-operation. Concrete lab-to-lab cooperation has been developed, like the one between Argonne National Laboratory and the European Commission Joint Research Centre on e-vehicles and smart grids. I hope the new US Administration will accept our proposal to convene in the near future a new meeting of the EU-US Energy Council. We could enlarge the Council formation by creating, for instance, an additional business sector. I propose also to organise an LNG conference with the European Parliament, the US Congress and companies from both sides of the Atlantic, as was done already once in the past. I am encouraged by the first reactions from Secretary of Energy, Rick Perry, in my first meeting with him.

But our cooperation can and should go far beyond trade. The EU and the US have been leading the global fight against climate change, and I hope this will continue. I believe in our future cooperation and our ability to lead the world's energy transition. We have been very successful so far. I understand that the current US Administration is in the process of reviewing its position in this respect. The clean energy transition is underway globally. Staying at the table is not only an advantage in diplomatic terms; it also helps maintain a competitive advantage by investing in innovative solutions, driving the transition globally forward. The clean energy transition does not run counter to economic interest, as often claimed. In both the EU and the US the energy consumption decreased since 2000 despite economic growth (by 8.3% in the EU and by 2.6% in the US). This means that our efforts to moderate the energy consumption have already shown results.

Solar energy is now the second largest energy sector employer in the US with 260,000 jobs. And it is growing extremely fast; more than 51,000 jobs were created in the US solar industry in 2016, which was an increase of nearly 25% over 2015. That was twelve times faster than the rest of the economy, even more than the jobs created by the oil and gas extraction and pipeline sectors combined.

Yet, the highest number of green jobs are currently neither in the EU nor in the US; they are in China. So either we join the global race to the new economy, or we lose it. This should be a priority. We should not forget that the victims of global climate change are not only in the developing world. We experience them in Europe as well. And the US has seen it also here with devastating natural disasters which hit your population centres.

I have therefore no doubt this century will be marked by those who find the cheapest sources of renewable and low-carbon energy; these are the ones who will lead the transformation to the modern economy. There is tremendous room for synergies across our two economies. We in Europe can benefit and learn a lot from the American entrepreneurial spirit, whereas we can bring to the table some of the best practices and policies which are already implemented across hundreds of European 'smart cities'. We can work together on clean tech, technologies which improve our use of renewable sources, improve efficiency and storage capacities. We will have to start thinking more seriously about cyber security given the digitation of the grids. These issues provide tremendous business opportunities!

It was an American initiative which brought together 22 countries and the European Union in the 'Mission Innovation'. Its purpose is to dramatically accelerate global clean energy innovation. As part of the initiative, participating countries have committed to double their governments' clean energy research and development (R&D) investments over five years. They are also committed to encouraging greater levels of private sector investment in transformative clean energy technologies. We in Europe are highly committed to this topic.

Thank you very much for your attention!

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