Ambassador Baily’s remarks at the Macedonia Energy Forum 2018

Macedonia Energy Forum 2018, June 7, 2018

Building Blocks for
Speech at the Macedonia Energy Forum 2018

Ambassador Jess L. Baily

Thursday, June 7, 10:30

Thank you very much Mr. Deputy Prime Minister for those remarks.  I’d like to thank our co-organizer of this event, General Manager of ELEM Mr. Minovski, all the people who put this together, all the panelists who are devoting their time, and all the attendees.

We are delighted to see such a great turnout.  I think that turnout reflects the importance of the discussion here today.  So, it is really a great honor for me to address you.

This energy forum provides a tremendous opportunity for government officials, the private sector, the international community, academia, international organizations, and civil society to discuss energy strategy and energy security for Macedonia, and the region.

U.S. Energy Priorities

These are very important issues.  Indeed, in the United States, ensuring energy security, advancing technology improvements in the energy sector, and ensuring universal access to affordable, reliable energy, including highly efficient fossil fuels, nuclear, and renewables, are among the priorities identified in our National Security Strategy.

In the United States and around the world, a country’s attention to energy policies has far reaching impacts on economic growth and prosperity, on a nation’s resilience to outside influence and manipulations, and on a nation’s innovation and technological growth.

Our own energy strategy focuses on five priority actions:

  • We promote open, transparent, and market-based energy sectors, by working around the world to reduce barriers to energy trade and development.
  • We promote U.S. energy resources, technologies, and services abroad, enhancing business collaboration between energy industries and promoting the energy sector back home.
  • We ensure energy security for the United States, for our partners, for our allies, for our trading partners by supporting diversification of energy sources, supplies, and routes.  We encourage other countries to develop strategic petroleum stocks, consistent with their commitments under the International Energy Agency.

The United States encourages foreign governments and multilateral institutions to promote universal access to affordable and reliable energy.  Universal access helps reduce poverty, fosters economic growth, and promotes prosperity and good governance.

As a leading producer, consumer, and innovator in the energy sector, the United States recognizes that we have a unique responsibility to ensure that global markets are free.  And, we are committed to helping our allies and partners become more resilient against those that use energy to coerce.

Energy Supply Sources Need to be Diverse

In Europe our policy is clear.  We encourage energy security through energy diversification – which means different fuel types, a mix of hydrocarbons and renewables, different supply sources, and different delivery routes.  Where possible, we support development of local resources as well as imports.

The State Department’s Deputy Assistant Secretary in the Bureau of Energy Resources John McCarrick recently noted that while some of the most vulnerable countries in Europe are making rapid progress to reduce their energy dependence, there are still 11 countries which continue to rely on Russian gas for more than 75 percent of their annual needs, and several others 50 percent or more.

A 2014 stress test found Macedonia to be among the five most vulnerable European states to a shut-off of Russian gas, as the DPM mentioned, due to its complete dependence on Gazprom for natural gas imports.

Let me be clear about one point.  The United States is not out to reduce or prevent Russian sales of gas.  That’s not our goal.  But, a 100 percent dependence presents risks, and we have seen, unfortunately, of some examples of where that dependency has been misused.  The United States supports the reduction of any monopoly in the energy market, so that fair competition can flourish.  A diversity of energy supply reduces risks and increases stability as well as both consumer and investor confidence.

For example, the United States has long advocated for projects like the Southern Gas Corridor, which will help Southern and Central Europe diversify its natural gas supply with gas from Azerbaijan.  Additionally, U.S. LNG exports are entering Europe, both up in the north in Lithuania, but also through the LNG terminal Revithoussa near Athens.

Regional Integration Means Greater Energy Security

Macedonia and the Western Balkan countries are making progress towards an integrated, regional energy market by implementing the directives of the Energy Community’s Third Energy Package.  The United States strongly supports these commitments, which have already bolstered strategic, regional energy development.

We applaud Macedonia’s efforts to integrate the country’s energy system into the regional energy market through moves such as constructing high-voltage power line connections with neighbors, as the DPM just outlined.

We support Macedonia’s efforts to diversify natural gas supply sources and transit routes by building an interconnector with Greece to provide alternatives to Russian gas.  I think the DPM accurately showed what that would also do for increasing competitiveness and pricing.  These interconnectors also could help Macedonia become a transit country, facilitating the flow of non-Russian gas to Macedonia’s northern neighbors and connecting Macedonia to global energy distribution chains.

We also encourage the government of Macedonia to fully implement the reforms adopted in the new Energy Law.  This would lead to full implementation of the Energy Community’s Third Energy Package directives and liberalization of the energy market here.

All these efforts contribute to enhancing the security and stability of the country’s energy supply.

We Want to Assist the Development of the Energy Here

The United States supports the dynamic and developing energy sector in Macedonia and the region.  Indeed, U.S. companies see possibilities in the energy market here and the region and want to partner with local energy businesses to provide U.S. products, technology, and services.

As the DPM mentioned, through USAID, the United States has partnered with Macedonia to improve the regulatory environment and restructure utilities and improve their integration into regional electricity markets.  We helped establish and build the capacity of the independent regulatory commission.  And we have supported and promoted the development of renewable energy sources and investments in energy efficiency upgrades in both the residential and industrial sectors.

As noted, USAID brought in experts to work with the government on the new Energy Law and we will continue to support the drafting of the sub-legislation that is necessary to fully implement that law.

Always, the main goal of these activities has been to ensure Macedonia’s energy security, to diversify its energy sources, and to reduce import dependence.

Clean Energy is the Energy of Tomorrow

Finally, today I would like to emphasize the importance of investments in renewable energy sources.  Using the resources which nature has given us is a smart investment.  Innovations in renewables are transforming the sector in ways that just a short time ago were unimaginable.

In the last ten years the United States has significantly changed its mix of energy generation.  We have become a major player in clean energy.  There are thousands of renewable energy projects all across our country.

Today, the United States is number one in the world in wind power, generating four times as much wind energy as we did in 2008 through more than 500 wind generators across 43 states.  These manufacturers supply enough energy to power more than 16 million homes.

Businesses know now that clean energy and energy efficiency are not only cost-effective but cost-saving.  I think you have all heard of the company Google.  Besides being the most frequently used internet browser and information set, Google is also the largest corporate buyer of renewable energy in the world.  Companies like Apple and Costco are close behind.  They are not doing this just out of altruism.  They are doing it because it means big cost savings over a longer term.

And even here, in terms of cost savings, we have seen through our projects in increasing efficiency in old industrial plants that that’s the simplest and easiest way to reduce energy cost.

Development of clean energy and energy efficiency initiatives can also mean big savings for local companies here in Macedonia, and in the Balkans, and I commend the government of Macedonia’s plans to increase renewable energy projects in wind and photovoltaics.

Hope for the Future

With reliable and cost effective energy generation and distribution, Macedonia and the Balkans can achieve energy independence, companies can prosper, and citizens in the end will reap the benefit of lower costs and increased reliability.

I applaud the initiative of convening this conference.  I hope your discussions lead to new initiatives and innovative approaches to increase energy security and regional connectivity and to creating a bright future for the energy sector of Macedonia and the region.

Thank you very much, and I hope you have a good stay here in Struga.