Remarks on The Role of Responsible African Oil and Gas Development in a Net-Zero Future

Thank you and good morning.

I want to thank everyone involved in organizing today’s discussions and a special thanks to the event organizers at Hyve.

The United States has been investing and engaging with African partners on energy development for a long time, and the U.S. has had an important energy trade relationship with Africa in oil and gas for decades.

More recently, there has been increased engagement on responsible natural gas development between our African partners and the U.S. Department of Energy’s Office of Fossil Energy and Carbon Management, which I represent.

Let me begin by setting some context. 

We find ourselves confronting significant global challenges, including energy poverty, accelerating climate change, and supply chain and commodity market disruptions caused by the COVID pandemic—all made worse by Russia’s invasion of Ukraine.

And we clearly cannot meet today’s defining challenges without major contributions and leadership from African nations.

That’s why Secretary of State Antony Blinken recently launched our U.S.-Africa Strategy to recognize that Africa is a major geopolitical force—one that has shaped our past, is shaping our present, and will shape our future.

Secretary Blinken said it best. The U.S. will work closely with African countries “as they determine how best to meet their specific energy needs,” whether through “technologies such as energy efficiency and renewable energy, as well as gas-to-power infrastructure.”

The U.S.-Africa Strategy reflects the region’s complexity—its diversity, its strengths, and its influences—and focuses on what we will do with African nations and peoples, not for African nations and peoples. 

The United States will work closely with our African partners to determine how best to meet their specific energy needs. This work will include pursuing energy access and economic development goals through the deployment of responsibly developed oil and gas, renewables, energy efficiency, and infrastructure.

The United States will also partner with African countries to enact reforms that enable transparent and world-class investment in critical minerals production and processing, which will supply future markets for clean energy and industrial technologies and infrastructure.

We at the Department of Energy and elsewhere in the U.S. government understand the urgent need for energy development in Africa for Africans. As one Tanzanian delegate at this conference put it, the energy transition in Africa is, in many cases, a transition from no energy to energy. The reality is that African countries have very low rates of per capita energy use and greenhouse gas emissions.

According to the U.N. Conference on Trade and Development, on a per capita basis, carbon emissions from the 46 least-developed countries in the world—33 of which are in Africa—emit only 9 percent of the world’s per capita average.

This means the average person in a developed country has a carbon footprint at least 23 times larger than the average person living in Africa.

We believe that through responsible oil and gas development, together with renewable energy, Africa can increase energy access in ways that lift up communities economically and socially—while adhering to the principle of common but differentiated responsibilities outlined in global climate agreements.

During past showcases, U.S. firms discussed opportunities for oil and gas development in many African countries. And with proved natural gas reserves of nearly 500 trillion cubic feet, Africa will continue to play a significant role as a key global gas producer for many years to come.

And responsible natural gas development can support sustainable economic growth and diversification in Africa by expanding energy access for domestic industries and local communities with low or no additional carbon and methane emissions.

So, what is “responsible natural gas development?” We have a lot of work to do ourselves in the U.S. to achieve responsible natural gas production, domestic use, and exports, but here is how we see it at the Department of Energy:

• Taking steps to ensure the natural gas supply chain is leak tight for methane emissions because, after carbon dioxide, methane is the most significant greenhouse gas.
• Creating innovative solutions to reduce flaring and venting of associated gas in oil production, such as alternative uses for “stranded” gas by capturing the flared or vented gas and converting it into added value products like hydrogen at the well pad.
• Accounting for the full lifecycle greenhouse gas impact of natural gas production, including the production, liquefaction, transport, and end uses of natural gas.
• Involving affected communities and other key stakeholders in all stages of natural gas development, while taking care to minimize potential environmental impacts.
• And maximizing deployment of carbon capture and storage and methane mitigation, as rapidly as possible, on natural gas pipelines, processing, liquefaction and other infrastructure, electric power generation, clean hydrogen production, and industrial uses of natural gas.

As the transition to net-zero emissions occurs over the coming decades, responsible natural gas producers who seek long-term access to export markets will increasingly have to respond to growing climate concerns and greenhouse gas reduction requirements of oil and gas importing countries around the world.

U.S. exporters of liquified natural gas are already confronting this market reality and actively taking steps to reduce the greenhouse gas intensity of their natural gas supply chain and, ultimately, to begin decarbonizing the production, use, and export of their product.

In the future, those producers who can demonstrate that they have the lowest carbon footprint will have the highest market value and the greatest longevity in the marketplace.

And so, the Department of Energy wants to engage with African stakeholders to better understand your vision for how natural gas reserves can be responsibly developed, in combination with the broader deployment of clean energy. 

We seek discussions with our African partners on:

How African gas producers and liquified natural gas exporters can take steps to be competitive in the emerging global market for responsible natural gas;

How to foster innovation to support emissions reductions and low and zero-carbon fuels development in Africa; and

How to incorporate diverse stakeholders and impacted communities into the process of developing and operating clean and sustainable natural gas development projects.

At home in the U.S., the Department of Energy is investing in research, development, and demonstration of technologies to detect, monitor, and mitigate methane emissions across the entire natural gas value chain. This year alone, the Office of Fossil Energy and Carbon Management announced $32 million in funding for methane mitigation.

We currently support U.S. government-wide engagement to assist the European Union in developing the Global Methane Pledge—which was launched at the COP26 Conference last year.

Since then, over 100 countries, including many in Africa, have agreed to support the Pledge’s goal of reducing 30% of global methane emissions by 2030.

And as the European Union works to require its suppliers to measure, report, and verify methane emissions, our Office of Fossil Energy and Carbon Management is sharing technical knowledge with the E.U. on methane quantification and mitigation.

The U.S. Department of Energy is also investing billions of dollars in the capture, transport, and geologic storage of carbon emissions from fossil fuels, including natural gas.

And our investments in research, development, and commercial demonstration to reduce the cost of carbon management technologies will soon be leveraged in other regions with similar fossil energy resources to help enable a global path to achieving net-zero emissions.

Our carbon management efforts received a major boost with the Bipartisan Infrastructure Law passed by Congress and signed by President Biden last year. This legislation provides historic levels of funding for the Department of Energy—$62 billion over five years. Of that total, $12 billion is dedicated to carbon management, including carbon capture, direct air capture and other carbon removal technologies, conversion of captured carbon emissions into useful products, and CO₂ transport and storage infrastructure.

$2.5 billion of this funding will be used to support the development of six large-scale commercial-scale carbon capture demonstration projects, including two dedicated to natural gas power generation, two for industrial facilities, and two for coal-fired power plants.

There is $8 billion allocated for the development of four or more regional clean hydrogen hubs, at least one of which will feature large-scale hydrogen production from natural gas combined with carbon capture and storage.

At the same time, thanks to funding in the infrastructure bill, we will be building out regional carbon management infrastructure to achieve economies of scale in the transport and storage of large volumes of CO₂ captured from industrial facilities and power plants, including those that use natural gas as a feedstock.

We are now working to ramp up an expansion of our existing CarbonSafe program to develop 20-40 large-scale regional geologic storage hubs across the country, each of which must store a minimum of 50 million tons of CO₂ over 30 years from multiple facilities and industries. And we expect that some of these regional geologic storage sites will each store hundreds of millions of tons of CO₂.

Just last week, we announced $2.25 billion in funding to support the development of these new large-scale, commercial carbon storage projects under our CarbonSafe program.

In parallel, the Department of Energy’s Loan Program Office is laying the groundwork for the Carbon Dioxide Transportation Infrastructure Finance and Innovation Program—or CIFIA. This $2 billion dollar program will support a much greater amount of low-interest loans and grants from the federal government that, together with private capital, will help build out regional CO₂ pipeline networks and potentially rail, barge, and ship transport of CO₂.

The CIFIA program will build on the roughly 8,000 km of CO₂ pipelines that already operate in the U.S. and expand that climate-essential infrastructure to new regions of the country.

On top of all of this, the Inflation Reduction Act that President Biden just signed this August includes major improvements to the U.S. federal 45Q tax credit that will incentivize private capital investment in carbon capture from industry, including natural gas power generation, hydrogen production, liquefaction of natural gas, and natural gas combustion in industrial processes.

The value of the 45Q tax credit will now increase from $50 to $85 per ton of CO₂ captured and permanently stored in geologic formations. In addition, the tax credit will be available to any project that begins construction between now and the end of 2032—a ten-year window for industry to plan and invest. Finally, for the first five years, companies will be able to claim the tax credit as a cash payment, greatly facilitating private financing of projects.

Taken together, the Bipartisan Infrastructure law provides the U.S. Department of Energy with tens of billions of dollars to support clean energy and industrial demonstration projects and infrastructure, and the Inflation Reduction Act makes available a comprehensive package of several hundred billion dollars in tax credits to incentivize private sector investment in those projects.

This legislation represents the most significant U.S. commitment to climate action to date. By enabling widespread commercial deployment of carbon capture from natural gas and associated infrastructure, this funding and financial incentives from the U.S. government will help spur industry innovation and bring down the costs of critical technologies, not only for the U.S., but also for countries in Africa and around the world, much as we have seen with wind and solar.

What we do at home is more important than what we say at international events such as this one, and the passage of these two laws signals a U.S. commitment to move decisively toward a net-zero future and meet our climate obligations, while continuing to help safeguard the energy security of our allies and partners around the world.

Internationally, we are looking for effective ways to expand our engagement with other countries to help foster carbon management in the production and use of oil and gas, including in Africa. For example, the Department of Energy, the International Finance Corporation, and the World Bank are working with the Government of Nigeria to develop carbon capture, utilization, and storage strategies related to technologies, policies, regulations, and standards.

This kind of work is foundational for establishing an U.S. and African carbon management industry that can support the deep emissions reductions we need to achieve low and zero-carbon production.

So, we welcome the opportunity to collaborate with you to advance carbon management in the context of African oil and gas production, for domestic use and exports.

To quote President Biden, “we believe in the nations of Africa, in the continent-wide spirit of entrepreneurship and innovation,” and value your expertise as we implement climate-critical methane mitigation and carbon management as part of a broader strategy for African countries to develop their own energy resources to increase energy access, expand and diversify domestic industry and manufacturing, and create higher-wage jobs.

As I said at the beginning of this talk, the global challenges we’re facing today can’t be met or overcome without African leadership.

We are at a historic moment as our respective countries seek to ensure energy access and security and to tackle the urgent threat of climate change. That’s why it has been such a privilege for me to be part of these discussions with you here at Africa Oil Week.

Thank you for your time today. I look forward to our discussions and to future partnerships.