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Assistant Secretary Fannon:  Thank you for your kind introduction.  Greetings from Washington.  I’m very pleased to be with you today although virtually.  It was a real honor to travel to Guyana recently with Secretary Pompeo in September.  It was a historic trip.  The first sitting Secretary to visit the country.

I’d like to offer just a few remarks on the shifting energy landscape and how the Bureau of Energy Resources, the Bureau that I lead at the Department of State, has been working with the government of Guyana and its citizens to promote growth, facilitate job creation, and investment in the energy sector which are really critical, especially in these important trying, challenging economic times.

COVID-19 has triggered a once in a hundred year demand shock in the commodities market, of particular concern in Latin America.

According to the IMF, revenue in the Americas and the Caribbean has been particularly hit hard by the pandemic with an expected contraction of a little bit more than [inaudible] percent year on year.  This is the largest recession on record.

The region has been negatively impacted by the direct effect of lockdown spillovers from the rest of the world.  This includes lower commodity prices, fewer remittances, and much less tourism as well as capital outlay.  But it is in these times of crisis that we recognize our greatest strengths and can find opportunity.

Guyana is expected to be the fastest growing economy in the world this year, despite the fact of the impact of these economic shocks.  Even considering COVID, the IMF expects Guyana’s GDP to grow more than 20 percent in 2020.

The United States principal energy diplomat working with friends and partners around the world, Guyana comes to mind as one of the best examples of how energy can transform a country’s standing block for itself as well as standing around the world.

This is not an academic idea but one that we’ve seen tested and practiced for how energy can be the catalyst for broader development.

I just looked at our own base of the United States.  During the U.S. energy boom of the last 15 years I’ve been watching how the fast evolution of the global energy map, how new supply and demand patterns affect statecraft and the security of nations.  Both for the United States and for new energy powerhouses like Guyana, energy quite literally powers economy.  It is foundational to the development of progress, but of course if not managed well it can also create stagnation and decline.

As such, energy represents an important factor of foreign policy.  The relatively recent growth of U.S. oil and gas production has materially transformed energy geopolitics in multiple ways with such speed that friends and foes alike are still adjusting.

Consider that from 2007 to 2019, 12 years, U.S. oil production has increased more than 140 percent, with the U.S. producing upwards of 13 million barrels per day in January of this year.

Guyana is new to hydrocarbon production but within the blink of an eye the country is going to be a sizeable oil producer and make a significant contribution to its own economy and that of the world.

Guyana is poised to become one of the highest oil producing countries per capita, and even eclipsing many countries in the Middle East [inaudible] natural gas.  We’ve seen a similar sea change with respect to U.S. gas production.

Consider in 2016 when the U.S. started exporting LNG in earnest, we were the 15th largest exporter in the world.  Three years later, in 2019, the U.S. rose to third and today we’re shipping LNG to 40 countries.

I understand that Guyana too is looking to benefit from new streams of associated natural gas with its oil production for use of domestic power generation.  I would encourage Guyana to strongly consider partnering with U.S. firms to develop that next evolution.

Latin America and the Caribbean region are blessed with vast natural resources and that’s why I strongly believe that the energy sector of all types will be foundational to the region’s economic recovery post-pandemic.

Once the immediate health crisis abates, and it will, countries in the region will need to implement policies to rapidly encourage economic recovery and create jobs.  One of the ways that the U.S. is lending helping hands to this effort is through our leadership with the growth of the American initiative or American [inaudible].  Growth in the Americas is a whole of government initiative through which the United States supports economic growth in the Western Hemisphere, catalyzing the private sector in sustainable energy production and the promotion of good governance.

When we first signed Growth in the Americas MOU in 2018 we did not anticipate a global pandemic.  We found that Growth in the Americas is even more relevant today as we look to the future. Through my bureau’s leadership of the Growth in the Americas energy pillar, helping countries in Latin America and the Caribbean develop their self-determined energy path.  In many cases countries in the region want to develop or diversify their energy mix and improve their investment climate but lack the capacity or the resources to do so.  Through Growth in the Americas the U.S. can help fill that gap.

We emphasize the importance of transparency and competitive procurement is one way to attract qualified project developers, private sector investment.  Equally important, predictable, clear stable regulatory and investment frameworks that balance risk and return.

Countries should continue on their path of reform and transparent, private sector led growth to not allow the pandemic as an excuse to go backward.  To be an excuse for easy money, for predatory investors.  Now is the time to work together to improve investment climates and to increase transparency for both host countries and investors as the region seeks investments for economic recovery.

To date the United States has sign Growth of Americas MOUs with 12 countries to do just that, to catalyze private sector investment which is so crucial to economic growth.  In fact the United States Secretary of State Pompeo signed a Growth of America’s MOU with the Ali administration in September during that historic visit to [inaudible].

During that visit we discussed bilateral trade and investment opportunities.  My bureau will engage further with the government of Guyana on technical cooperation for oil spill preparedness and response.  This MOU continues our earlier work to help the government build the regulatory and policy frameworks needed to ensure proper oversight of the oil and gas sector.

I’m confident that Guyana will continue on its pro-growth, pro-transparency, pro-democracy path and will become an example for others in the region and indeed around the world.  The United States will continue to stand with Guyana today and in the years ahead as it moves ahead on this incredible journey.

Thank you.

Moderator:  Thank you very much, Assistant Secretary Fannon.  The partnership between America and Guyana is indeed very strong.  I have a couple of questions I would like to put to you.

In addition to growth in the Americas in the Asia Edge Initiative I understand that under your leadership you also created a framework to work with countries on energy mineral mining.  Can you explain what the Energy Resource Governance Initiative, better known as ERGI aims to achieve?

Assistant Secretary Fannon:  Yes, thank you for the question.

On the global [inaudible] I see around the world how this call for cleaner forms of energy and the scale with which it’s occurring is really transformational, but we have to start considering where are these minerals that clean energy technologies require.

According to very conservative estimates or organizations like the World Bank, if they’ve looked at what, to achieve clean energy targets, what does that mean for minerals demand?  And some of their estimates show that mineral demand growth will increase over 500 percent for example, to achieve this country’s [target].

Where are these minerals?  How are they being developed?  Is there enough of them?  Is their development based on this inclusive transition that people talk about where advances in human rights, advances in environmental sustainability that enlist local communities or is it something else?

So we want to make sure that we do have this inclusive kind of growth and that all are able to benefit from it.

Of course mineral extraction can lead to long term economic development benefits if done according to global best practice, but done poorly, it can contribute to environmental harm, corruption, and human rights violations as was mentioned.

In light of the scale of this, we want to ensure that [inaudible].  So to do that we formed the Energy Resources Governance Initiative.  ERGI is comprised of five countries — the United States, Canada, Australia, Peru and Botswana.  Five diverse countries, spanning four continents.  But all have a strong record of responsible minerals development over the long term.

What we seek to do is together from a government to government point of view, to help other governments to develop their sound mining sector and governance and to ensure resilient and responsible mineral supply chains by having a global level playing field to ensure that everyone is able to benefit.

I’ve been pleased to see ERGI move forward and really has considerable momentum behind it.  I recently convened 20 countries in a discussion around these concepts, or have seen other entities like the European Commission adopt ideas of need to ensure responsible development.

In the hemisphere, I was recently in Brasilia where we signed a U.S.-Brazil Critical Minerals Work Group just to focus on these kinds of issues.

Through ERGI we have a framework to engage with governments to talk about these issues.  But I’d like to speak to it in three parts.  What ERGI really is intended to do, is doing.

First, we wanted to get that shared understanding of our respective five countries and develop a tool kit that has very specific actionable things that countries can do to ensure they are regarded as a best practice preferred supplier.

So we have a tool it and you can go to it.  It’s free.  Which has those actual steps.

Second, we have information that the tool kit is helpful but without implementation it gets lost.  So the U.S. government, and we’re engaged with other governments to support this, is spending money to help countries integrate ERGI into its regulatory environment.  So we spent over $10 million this past year alone to help partner governments integrate, implement the tool kit.

Third, by implementing ERGI’s principles, we’ve integrated them into U.S. development support.  So through the context of the Development Finance Corporation we’ve integrated these principles to ensure that projects and countries that identify and integrate ERGI’s principles, that they are given a preference in the DFC’s lending criteria.  The DFC is a $60 billion entity which allows for the first time the U.S. government to take equity stakes in projects.  So by integrating ERGI we’re ensuring that countries that adopt best practice get that recognition and catalyze that private sector investment.

As I said, the energy transition is clearly underway.  Critical energy minerals will play an out-sized role going forward.  Today’s minerals production and processing is too concentrated to meet the future needs of the next decade plus, and given the projected demand, this concentration represents choke points or bottlenecks in the system which will harm consumers and harm the economy.

So the good news is it’s not too late.  Together we can build the responsible mineral supply chain that we all deserve and that will achieve the clean energy demands that countries and people around the world are calling for.

Moderator:  Thank you so much.  ERGI is clearly very important and should be very important also for the Summit because one of the key components of our Summit is extendibility, inclusivity and also best practices.  So thank you so much for sharing this initiative with us.

Another question.  Would you be able to please tell us more about the work that your bureau is involved in in the region of Latin America and also the Caribbean?

Assistant Secretary Fannon:  Over the past several months we’ve continued our bilateral energy diplomacy under the Growth in the Americas with several countries in the region and we’ve engaged regionally through in-person diplomatic visits despite the challenges of COVID.  As I mentioned, traveling with the Secretary, and I was recently in the region on my own.  Some of this work continues, is ongoing virtually.

In July, for example, I hosted a bilateral energy dialogue with Ecuador’s Energy Minister Ortiz.  In that dialogue we focused on collaboration in the energy sector  and strategies for attracting private investment.  And then I backed that up recently when I was just in Quito in person, where we talked about new investment opportunities both in crude oil refining, power generation, as well as minerals.

Last month I spoke at OLATE’s Energy Week and my deputy also spoke there with the IAEA OLATE Forum.

My most recent trip to Brazil, Chile and Ecuador I also spoke at Chile’s ExpoMin, Latin America’s largest mining conference where I spoke about this idea of responsible sourcing, encouraging responsible mineral supply chain.

We have ongoing engagements with Growth in the Americas MOU partners — Panama, Jamaica, Brazil, Ecuador, Colombia.  These are just all examples of some of the ongoing work.

With respect to the Caribbean, we have a variety of programs ongoing where we’re helping Caribbean nations on technical assistance to support their own energy path, ensure that they have resilience and secure energy.

In Central America we’re helping on national and regional electricity regulators and grid operators optimize the regional power network to improve reliability, interconnect all of the energy projects and promote distributed generation particularly to integrate natural base into the system.

All of these programs are very [inaudible] based on, as I mentioned earlier, the term self-determined energy path of countries.  So they have a different flavor based on what are the ambitions of any particular country?  So in Argentina we provided oil spill response recovery as they were looking to have a new offshore tender.  Our collaboration in Latin America and the Caribbean, Growth in the Americas is seeking to promote that enabling investment environment which is key to increased private sector participation in the local energy market.

As we recover from the COVID-19 pandemic this fundamental aspect of Growth in the Americas work is all the more important.  There’s only so much governments can do.  The real virtue of our system in democratic countries is this private sector led growth based on transparency and fair dealing, and that is what we’re seeking to really unlock in Growth in the Americas.

As countries are seeking investment it’s important that they demand that infrastructure development projects feature transparent procurement process, and uphold environmental and social safeguards and are driven by this inclusive growth in line with international best practice.

I like to remind everyone that the United States is the region’s largest trading partner by far, and we engage through this, through transparent policies that protect the rule of law and provide attractive business environment for entrepreneurs.  Our firms, U.S. firms, operate according to these values that produce good deals and quality work.  These are policies that are critical to building sustainable, prosperous economies throughout Latin America and the Caribbean.

We’re very grateful for our strong partnerships in the Western Hemisphere and they will certainly endure as our work continues through the pandemic and looking through the other side for further growth for all.

Thank you very much.

Moderator:  Thank you very much, Assistant Secretary.  That was a very enlightening presentation and also discussion we just had.  The USA are indeed a prime partner of Guyana and the partnership between both countries is stronger than ever.

U.S. Department of State

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