CNBC Exclusive: CNBC Transcript: U.S. Secretary of Energy Rick Perry Speaks with CNBC’s “Squawk on the Street” Today on whether the US will tap the Strategic Petroleum Reserve after the attack on Saudi oil fields.
WHEN: Today, Monday, September 16, 2019
WHERE: CNBC’s “Squawk on the Street”
The following is the unofficial transcript of a CNBC EXCLUSIVE interview with U.S. Secretary of Energy Rick Perry on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) today, Monday, September 16th. The following is a link to video of the interview on CNBC.com:
Q2 hedge fund letters, conference, scoops etc
Rick Perry: Unclear whether tapping Strategic Petroleum Reserve needed
Meeting in Austria
CARL QUINTANILLA: In the meantime, the President, as you know, on Twitter said we are, quote, locked and loaded. Adding in a Tweet this morning: We don’t need Middle Eastern oil and gas, and in fact, have very few tankers there, but will help our allies. Joining us on the phone with reaction from the White House today, Secretary of Energy Rick Perry. Mr. Secretary, thank you for the time. Good to talk to.
SEC RICK PERRY: Good to be with you. We are presently in Vienna at the International Atomic Energy Meeting. An interesting time in front of the International Atomic Energy folks talking about the bad actor -- in that world, happens to be Iran as well. So, we’re not only giving some clear messages to the global community about the bad activities that Iran has been involved with in nonproliferation of our nuclear material. Setting on top of that is obviously the attack on the Saudi Arabia oil supplies.
So, you’ve got a country in the Middle East that’s causing great havoc and the message is clear. And I hope every country in the world joins us in saying that we are not going to accept their malign activities and that, you know, the people really getting hurt out of this are countries that are major oil importers, Japan, China. Both of those countries really will pay the huge price for a big spike in oil and gas prices. With that said, I think the message is clear. We’ve got big supplies of oil around the world. The United States is sitting on 645 million barrels in our Strategic Petroleum Reserve.
Saudi potential
Saudi Arabia has 188 million barrels of oil and I think 97 million barrels of oil products. So -- and worldwide the International Energy Agency member countries of – I think of $1.550 billion. So, there’s a lot of oil out there in reserve. But, with that said, we need to send a clear message that this type of activity and the obvious spike that could occur in the market is the result of erroneous activity and the, you know, real clear message the President is sending to Iran about their malign activities.
CARL QUINTANILLA: Mr. Secretary, for our audience who’s interested in the status of the facilities, what intel do you have on what was affected and how long it will take to restore?
RICK PERRY: Yeah, I’ll leave that to my counterparts -- who I talked to at length 24, 30 hours ago. Prince Bin Salman and I have a long-time relationship. And he would be the better source of information about what they saw as far as direct damage and how quickly they’ll have that facility back up and operating.
MORGAN BRENNAN: Secretary Perry, you mentioned the Strategic Petroleum Reserve and other strategic reserves around the world. Are those already being tapped on to make up for the loss in production right now, and if they’re not, at what price would that happen?
Reserves
RICK PERRY: Yeah, I think the President was spot on when he said that that Strategic Petroleum Reserve would be available if needed. I think we are yet a little premature in making any comments on the actions, actually, about whether or not the Strategic Petroleum Reserve is actually going to be needed, until we get a real handle on the length of time that this facility is going to be down. I think the Saudis are already saying they’re going to be able to get a third of this production back before the close of business today. So, you know, there’s going to be a spike in this, but again, you know, I want to be really clear that the market out there has a fairly substantial amount of oil available. You know, does this disrupt it? Without a doubt.
Does this put people on notice that we’ve got some bad actors in the world and you need to be addressing the security side issue? But the President made a really good point that I want to hone in on today. And he talked about this ought to be a wakeup call all across this country, particularly around the world, but particularly in America, the number one oil and gas producing company in the world, we need to build out our infrastructure to ensure America’s record amount of oil supply gets to the global marketplace.
Strategic Petroleum Reserve and oil supply
You know, we’ve got some challenges over in the North Eastern part of the United States being able to move product across New York State because their Governor and their legislature think that that’s, you know, good politics.
Well, it may be good politics -- but it’s bad national security. It’s bad security for our allies around the world. We can’t get the product. So, not only is this a time for us to be globally sending a message that Iran cannot be allowed to act in the way that they’re acting, whether it’s with the nonproliferation issue, dealing with nuclear weapons, or they’re attacking oil supplies to try to disrupt the global economy.
We also need to look in, and look at the places where our infrastructure is being throttled. It’s being slowed down for political reasons that aren’t necessarily in America’s best interest.
DAVID FABER: Secretary Perry, you’ve made it very clear and others in the administration have as well given your comments just now that you believe Iran is responsible. Is it your expectation, understanding you’re not a part of the defense establishment, nonetheless, that we’re going to do something or that there will be something done by the Saudis to respond?
Iran and beyond
RICK PERRY: Well, I think the message is clear not just to Iran, but the message is clear. Not just to Iran, but the message is clear to the global community here, that this is not -- this is not activity that’s acceptable.
So, I think there will be a coalition effort, both our friends in the Middle East that understand having a crazy neighbor is a real problem -- a neighbor that will literally attack you out of the blue, whether you are Saudi Arabia, whether you’re Israel, whether you’re Qatar or the UAE, all those countries in that region should have the hair on the back of their necks standing up watching a country attack someone to manipulate the energy market, to send a message, whatever the reason was that Iran attacked this facility. It is a time for a coalition of sane, thoughtful, energy producing and energy consuming countries to come together and put a stop to Iran’s malign activities.
Strategic Petroleum Reserve and oil prices
MORGAN BRENNAN: Yeah. Secretary Perry, I mean, this has been the market’s biggest fear for years now, this idea you could see a potential conflict in the Middle East that centers around oil. How real is that risk in light of the attacks we saw over the weekend?
RICK PERRY: Well, here’s the interesting thing. My bet is that there are people that have said if there were attacks like this it would go to $100 oil. What we’ve seen is obviously a spike. But I think because of U.S. production, because the United States under this administration in particular has really pushed American resources to 36 countries on five different continents now. We can send a message that yes, it’s going to be a disruption for some period of time. Yes, there’s going to be a spike in price.
But not anywhere near as devastating as what some five years ago we would have said and quite frankly would have probably -- would have been a reality, had the United States not leaned into natural resource delivery around the world we have.
We’ve actually been planning for this in a sense because we’ve made our product available, LNG in particular. But today we’re about a net, I think, 5 million barrels of oil exported a day out of the United States. So, there’s actually – there’s actually a silver lining, if you will, to this story in the sense that had this happened five years ago, it could have absolutely brought the global economy to its knees. Today, we’re concerned about it. We need to address it. But it’s not anywhere near as devastating as what it would have been let’s say five years ago.
On Strategic Petroleum Reserve and weapons
CARL QUINTANILLA: Finally, Mr. Secretary, what do you say to people who are worried that the cost of these weapons and the technology of these weapons are going to overwhelm the ability of these facilities to defend themselves?
RICK PERRY: Well, I’ll let someone who has the background in cost of weapons, the type of weapons you’re making reference to. But obviously, spending against these types of attacks, we’re very advanced in our ability to do that. And, I’m sure there are conversations going on – or in fact there are conversations going on with our allies about technologies that could certainly be of assistance to them in protecting their facility.
CARL QUINTANILLA: Mr. Secretary, thank you. Important intelligence for a lot of our viewers on this story. We’ll talk to you soon. Thanks again. Secretary Rick Perry.
