Deputy Secretary's Speech

David A. Sampson Acting Deputy Secretary of Commerce
U.S.-China Oil and Gas Industry Forum (OGIF)
New Orleans, Louisiana

Vice Chairman Zhang, Deputy Secretary Sell, Don Hutchison, ladies and gentlemen … good morning to all of you. And thank you for your warm welcome. On behalf of President Bush and the U.S. Department of Commerce, it is a great pleasure to be here to kickoff these meetings.

I’d also like to thank the U.S. Energy Association for setting up this forum. It’s a great way to deepen our relationship, to make new friends, and to work on major global economic problems like the energy crunch we’re all facing.

Thank you as well to the city of New Orleans for hosting these meetings. I have a special fondness for this city and its people. New Orleans was my home for several years when I was in graduate school. I’ll never forget the special vitality and rich culture that New Orleans embodies. And, the best seafood in the world!

As we meet today, the U.S. and China are regularly engaged at the highest levels on a wide range of strategic and economic issues, not the least of which is energy.

Secretary Sell explained the problem, and the solutions, in the clearest of terms. He also laid out the actions that the U. S. is taking to address it. In particular, I am very hopeful that Congress will soon approve President Bush’s energy program to deal with what all of us know is a very complex, and pressing issue. The President has wanted this legislation for a long time. He proposed it to Congress 4 years ago. So it’s time we got it done.

We must also focus more broadly on the bigger picture, on working even closer with our partners in the global economy. In the energy world, we all know that the U.S. and China have very significant roles to play, both now and well into the foreseeable future. And because we are the major engines in today’s global economy, we have good reason to work together.

So what I want to do is give you two key points to keep in mind as you meet over the next few days.

First is partnership.

There is no way on earth that China or the U.S. can solve the supply and demand problem alone. No way.

Obviously there are many players on the field. But as the biggest energy users, and major net oil and gas importers, we have a lot in common. We both need to step up domestic production, to improve efficiency, and to diversify foreign sources of supply.

To date, we appear to be competing more than we’re partnering. Competition is a good thing. We love open markets, and free … but fair … trade. And the energy business is one of the most open and free-wheeling industries on the planet. I come from Texas and know a little about the oil and gas business and the entrepreneurs, wildcatters, and roughnecks who built a prosperous industry in Texas in the early 20th century.

China is making energy deals with many companies in many nations. But we believe there is much more that the U.S. and China can do as partners than what we’re doing today. And we believe there is much to be gained when two giants join hands.

When it comes to diversifying supply, why not invest jointly to develop oil or natural gas fields in Russia or Canada or Kazakhstan?

China wants to increase domestic production. Why not see what can be done about opening up China’s markets to more U.S. investment? As a Texan, I can tell you we have vast experience in all aspects of production and a great desire to invest.

And why not look at how we can team up on innovation and developing new technologies? As I’m sure we’ll hear shortly from our Chinese friends, China’s experts are working on new ways to squeeze more out of their fields. We’re doing the same thing.

That brings me to my second and final point: Innovation.

With all due respect to our competitors, America has the best energy technologies in the universe, bar none. We have led the way when it comes to innovation.

If you look at energy efficiency alone, you can see my point. To create one dollar of GDP today, it takes just over half (some 56 percent) of the energy it did in 1973. Think about that. This means our companies are way more able to survive an energy shock than they were just three decades ago.

Our innovative, cutting-edge technology; experience in exploration, production, and project management; and ability to finance large-scale projects can greatly benefit China’s need to meet its future energy requirements.

President Bush is committed to keeping our edge in innovation. His R&D budget is the largest in American history. And we’re willing to share our knowledge with the rest of the world.

In closing, let me ask that you keep these points in mind during your meetings: partnerships and innovation. President Bush believes very strongly, as do I, that China and America can achieve more as partners than as adversaries.

To be sure, we’ve had our share of disputes over the years, most recently with respect to trade. And we see the forces of protectionism rising. But this isn’t new. We’ve seen the tug of war over engagement versus isolation throughout American history.

I’ve been reading a new book about the history of American economic power.

So as we move ahead, let’s do our best to work government-to-government, industry-to-industry as partners to ensure greater energy security and supply for a safe and prosperous future for our citizens and pursue solutions through innovation.

I hope your meetings go well. And I look forward to working with all of you.

Thank you very much.