James Richard Perry Talks U.S. LNG Exports And Climate Change

CNBC Exclusive: CNBC Transcript: Energy Secretary James Richard Perry Speaks with CNBC’s “Squawk Box” Today

James Richard Perry

Image source: CNBC Video Screenshot

WHEN: Today, Wednesday, July 31, 2019

WHERE: CNBC’s “Squawk Box

The following is the unofficial transcript of a CNBC EXCLUSIVE interview with Energy Secretary James Richard Perry on CNBC’s “Squawk Box” (M-F 6AM – 9AM) today, Wednesday, July 31st. The following is a link to video of the interview on CNBC.com:

Energy Secretary James Richard Perry talks LNG exports, climate change, and more

 

JOE KERNEN: Alright, well, oil prices are on the rise again this morning. Traders anticipate a potential interest rate cut from the Fed. Joining us now to talk about the state of the global energy arena, as well as some news on U.S. LNG exports: Secretary of Energy James Richard Perry. Mr. Secretary, it’s great to have you all on this morning. Let’s talk about — we’ll get to all of the big issues because — and tell us where you are and what you’re talking about, but let’s talk about the LNG news that was embargoed. It’s been hard for us to get clearance to export some of this stuff that we’re flush with around the world. It might help to be able to do that for our industry.

JAMES RICHARD PERRY: Yeah. That’s one of the pushes that President Trump has made, is he said, ‘Look, step in to this, lean into this,’ he said, ‘I want regulations that are either costly or just getting away or somebody may have thought they were a good idea at one time but they really don’t serve the public — get them out of the way.’ And across government now, you’re seeing that type of approach that’s saving literally billions of dollars. And so much time and getting American energy into the world market. So, this project down on Pascagoula, Mississippi, an LNG liquefaction facility that Kinder Morgan is the 50% owner of it, and you know, a great company. Out of my home state of Texas, Rich Kinder has done a fabulous job through the years. And these guys are — it’s exciting to see them coming online with a new LNG facility. We are in 36 different countries now, shipping LNG. I think we have got four facilities up and going. There’s a couple of more online, along the Gulf Coast. So, infrastructure is the name of the game, Joe. I will tell you, you’re seeing a lot of the infrastructure. The states that are blocking these progress, I will suggest, are making huge mistakes from the standpoint of being able to not only keep — like New York for instance, not being able to build pipelines across New York, their citizens are going to be paying some of the higher power rates in the country. Along the Gulf Coast, not the case. They’re moving product out. They’re making not only economic sense, it’s national security. It’s security for countries in the European theater. So, this is a fabulous story about American energy that’s having geopolitical ramifications all around the world.

JOE KERNEN: Sometimes the abundance that we now have in the United States unfortunately affects prices. And that’s counter — counterintuitive and it might hurt production. But if we can export more of it and spread it around, then you deal with the demand and we can keep it going out. You’re at the Chambers Global Energy Institute Event. I think you’re going to present. What else are you going to say? What do you have prepared?

JAMES RICHARD PERRY: Yeah, just back from the Middle East, about four days in Israel, two days in Egypt. You know, fascinating world out there when it comes to the Eastern Mediterranean and the gas finds that their — Noble Energy — another Texas company that went out and found the massive find off the coast of Israel. There’s another — Zohr field that’s just north of Egypt. Gathering all that, you have the Israelis and you have the Egyptians as well as some other — Jordan for instance. You had Israel and the Palestinian people sitting down at a table in Cairo this last week talking about, ‘How can we work together to give energy resources in that region the proper focus? And moving it around in country.’ Just I’m telling you, Joe, it’s one of the most fascinating times in world history when it comes to energy. And the United States, leading the charge.

JOE KERNEN: Can you weigh in on this, Mr. Secretary? And I know that there’s a statement from the DOE, that the Department of Energy advances U.S. national security and economic interest by routinely engaging with energy stakeholders and foreign counterparts who are seeking the peaceful use of nuclear energy. That’s the answer to what happened with the Saudis and with your involvement with IP3 and whether to give nuclear technology to the Saudis. Even a Republican, Marco Rubio, is worried that maybe the Atomic Energy Act was violated in transferring some of this technology to the Saudis. Was that all done by the book? Do you have any concerns with that at all?

JAMES RICHARD PERRY: Yes, sir, no concerns at all. Here’s — just cut through all of the chatter and the white noise. Here’s the issue. The Saudis are going to engage in a Civil Nuclear Program for power for their country. Who do you want working with them? Who do you want to be supplying the fuel, the technology? You want the Russians? You want the Chinese that have zero interest in nonproliferation. Or do you want the United States? I would suggest that the United States makes all the sense in the world. If they’re going to do this, we want a very strong one, two, three agreement signed with them. And you want the United States being engaged with this. So, you know, I understand all of the noise and the issues that pop up around this.

JOE KERNEN: I guess the Khashoggi — there’s a lot swirling around all of our relations with Saudi Arabia at this point. And I guess, you know, nuclear technology. And you wonder, you know, about the — you know, what type of partner we really have in Saudi Arabia. We’re kind of stuck with Saudi Arabia. We are with a lot of countries around the world, obviously, when they do things that we don’t really approve of or like very much. So, I mean, I understand what the real world is. But no pause after the Khashoggi incident?

JAMES RICHARD PERRY: Well, listen, I don’t get confused that there’s always pause. I mean, we deal with countries on a regular basis that sometimes their activities are very counter to what you would want out of a decent partner and a decent neighbor. But the fact is, I got to get back to Saudi Arabia is going to have a civil program. Do you want them to be partnered up with the Russians? Or do you want them partnered up with the Chinese? Or do you want the United States to be in there working with them, looking over their shoulder, having this agreement? And I’ll suggest the latter is the better work.

BECKY QUICK: That’s kind of an argument for any country having our help when it comes to nuclear energy. Would you be okay with that?

JAMES RICHARD PERRY: Indeed it is.

BECKY QUICK: So, you would say the United States should partner with any country?

JAMES RICHARD PERRY: I should say within reason. If we’re going to sign an – not within reason. Absolutely. If we’re going to sign an agreement with somebody, I think the United States has the best oversight. Number one, I think we have the best technology. And certainly, we have the right mindset when it comes to civil nuclear power. We’re going to limit that. We’re working with the International Atomic Energy Agency. I’ll be back there in our annual conference in September, talking about getting a new director, Director Amano passed away this last — ten days ago. And so, there’s a lot going on out there in the nuclear realm. I will say with small modular reactors, we have got some great American companies that are leading the charge on that. So, we’re going to see the proliferation of nuclear energy going forward. I think it’s in the world’s best interest, certainly it’s in America’s best interest that we are engaged and we are partners with these countries as they develop those civil nuclear programs.

JOE KERNEN: The Trump administration, Mr. Secretary, is there less — I mean are we not moving as quickly on renewable things? Are we — have we conceded that hydrocarbons are going to be with us for quite a while? Whether it’s natural gas, whether it’s oil, whatever you look at. Are we on a longer schedule to where we get to what some people want? And that would be a carbon free energy infrastructure. Are we moving more slowly or are we still headed that way?

JAMES RICHARD PERRY: I don’t think so. No, we’re headed in the right direction. Let me share with you why. We’re on the country in the world that is making real progress on the reduction of emissions. And that’s the transition from the older inefficient plants to the cleaner burning natural gas. That is inarguable, that America is leading this transitional fuel of natural gas. What we are seeing on renewables is pretty fascinating, as well. Battery storage, making some real progress on battery storage. I happen to think that’s the kind of holy grail if you will, if we can break the code on that, to be able to score this energy in massive amounts long term. Our national labs are working on that. We have some really great projects that are going on out there. You know, you’re seeing wind energy continue to grow. So, fusion energy, we’ve got two companies on the West Coast that are working on fusion energy. And listen, I know that’s further down the road. But there’s exciting things going on in the zero emissions side.

JOE KERNEN: Well, I hope so. Because – I heard again, we’ve got – you know, last night I heard we have like 12 years. So, I mean, if we –

ANDREW ROSS SORKIN: There’s the thing I don’t understand.

JOE KERNEN: I love living.

ANDREW ROSS SORKIN: Mr. Secretary, given some of the comments that you have made and the administration and the President have made, about your views on climate change, why would you need to do any of these things?

JAMES RICHARD PERRY: Well, the fact is –

ANDREW ROSS SORKIN: I say that somewhat sarcastically, but not really.

JAMES RICHARD PERRY: — we’re going to address the climate. It makes sense for us to have policies that reduce emissions, that reduce the pollutants that are in the air, that reduce the particles that cause massive health problems around the world. So, you know, just common sense tells you: bring the cleaner burning fuels, bring the things that bring emissions down. That’s just common sense.

ANDREW ROSS SORKIN: But you don’t believe that these — that any of that is causing climate change?

JAMES RICHARD PERRY: Listen, I’m on the record of saying that the climate is changing. Man, it’s been changing forever. Where have you been? The climate is changing. Are we part of the reason? Yeah, it is. You know, I’ll let people debate about, you know, who’s the bigger problem here. We’re reducing emissions. You go back to that Paris Accord and you look at those countries that signed that Paris Accord, that had their hair on fire because we got out. None of those folks are reducing their emissions. The United States is. And that’s the real story.

JOE KERNEN: Mr. Secretary, are you – you don’t have to answer but the notion about there is a catastrophic event, near term, imminently from human activities. That’s where people might disagree.

ANDREW ROSS SORKIN: No, but the administration has come out and –

JOE KERNEN: Did you hear me? Catastrophic event. 12 years.

ANDREW ROSS SORKIN: I understand. But let me clarify this. Mr. Secretary, the administration does not believe that carbon –

JOE KERNEN: Carbon dioxide.

ANDREW ROSS SORKIN: — carbon dioxide is a problem in terms of climate change.

JOE KERNEN: Catastrophic—

ANDREW ROSS SORKIN: Correct?

JAMES RICHARD PERRY: We focus on reducing the emissions. That’s all of the emissions.

JOE KERNEN: Particulate, pollution, clean.

ANDREW ROSS SORKIN: Okay. Okay. That’s fair.

JOE KERNEN: But probably it’s fair to say that the administration does not think that catastrophic human-induced global warming is settled.

ANDREW ROSS SORKIN: Well I knew this—

JOE KERNEN: That’s probably — would be fair to say.

JAMES RICHARD PERRY: It’s fair to say that this administration is making more progress than any administration in history in reducing emissions. Face it. That’s the facts. It may not meet your narrative. But that’s the facts.

JOE KERNEN: Alright, Mr. Secretary, we appreciate it. Thank you.

JAMES RICHARD PERRY: You’re welcome, man. It was good to see you.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver