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Remarks at signing of US-Australia Strategic Petroleum Reserve Lease Agreement - Parliament House, Canberra

3 June 2020

Subject: Dan Brouillette, United States Secretary of Energy met with Minister for Energy and Emissions Reduction Angus Taylor to sign the US-Australia Strategic Petroleum Lease Agreement.

E&OE

DAN BROUILLETTE, UNITED STATES SECRETARY OF ENERGY: I want to thank everyone for joining us today. It's a very exciting time for us. 

Minister Taylor, Angus, it's a real pleasure and indeed an honour to join you. Although, I'm sorry we can't do it in person as we did earlier this year, I think we met in March. 

As was discussed recently, very recently by telephone, a lot has changed in the last few days and we learned the importance yet again of energy security. And even more I think we have learnt the importance of true friends and trusted allies, and Australia could not be a better mate. 

Our two countries have fought together in every significant conflict since the First World War, and we continue to stand together in more recent crises such as 9/11 here in the United States, as well as the most recent pandemic, COVID-19.  

The Agreement that we're about to execute will deepen that relationship even further, and all the while it will advance the strategic interests of our two nations, it will strengthen global energy stability and security. 

Working together for over a year, our teams have developed this first of a kind agreement that's a win-win for both of our countries, and it satisfies the requirements of the International Energy Agency. 

Although this is our first crude oil storage Lease Agreement, we've successfully operated the Strategic Petroleum Reserve for over 40 years. The SPR - as we refer to it here in the US Department of Energy - is a safe and secure reserve with a proven record of supplying oil in a time of need. Our team is one of the most professional organisations in the field and we will assist you in each step of our progress. 

Minister Taylor, last year a team of yours visited our Big Hill Strategic Petroleum Reserve in Texas. I want you to know, I'm excited to have you visit that facility with me at some point in the very near future. 

With you, our friends and our mates, this is a great arrangement. It supports your liquid fuel strategy by allowing you to quickly make progress on your sovereign energy goals. And as a bonus, it allows you to benefit from currently low oil prices at a time when storage base is in high demand. 

Importantly, as a member of the IEA - the International Energy Agency - stocks that are owned by the Commonwealth of Australia and stored in the SPR will be credited toward the emergency reserve commitment of Australia under the agreement on an International Energy Programme, IEP Agreement, which underlies the IEA. The IEP Agreement and the oil stockpiling requirements of IEA members, places IEA in a strong position to coordinate collective actions that serve as a bulwark against supply disruptions, whether they be natural or manmade. The mere mention of this program after the September 2019 attacks against Abqaiq and Khurais oil facilities in Saudi Arabia helped to calm global energy markets. 

This Agreement today will strengthen global energy security and support Australia's contribution to an IEA collective action in the event of a supply disruption. And in that regard, it is a win not only for the United States and for Australia, but the entire IEA membership. 

We're thankful that you chose to be the first country to demonstrate the judgment of leasing storage in the United States' Strategic Petroleum Reserve. 

Oil producers will also be thankful for these purchases during a time of oversupply imbalance. 

Most of all, this Agreement is a lasting sign of the US-Australian partnership in energy security and of our stalwart Alliance in times of conflict and crisis, and of a friendship that will extend for decades, even centuries to come. 

Thank you, Angus, it's great to be with you again today.

ANGUS TAYLOR, MINISTER FOR ENERGY AND EMISSIONS REDUCTION: Thank you, Secretary, thank you, Dan. And we are indeed great mates, and today's ceremony marks an important occasion that strengthens that relationship between our two great nations, and we thank you very much for your participation in this. 

The leasing deal is a very clear testament to both the United States and Australia's shared commitment to the security of the global oil market. Of course, this, as you rightly say, is not just good for the United States and Australia, but good for the world as well. 

First and foremost, I want to thank you, Secretary. Your support for this Agreement has not only enhanced our domestic fuel security, but it's cemented the foundations for our Alliance, which as you rightly point out, has been a strong one for such a long time, fighting every war together since the First World War. 

I also want to thank the Ambassador, and Ambassador [Deputy Head of Mission, United States of America] Cooper for being here today as witnesses. 

Thanks also to the Department of Energy for their very quick turnarounds during these negotiations, and I want to acknowledge the efforts of all other staff who've worked on this from both sides. I know there's been a great deal of work going on from many, many people. 

I know it's been quite a process to get to where we are here today, but I'm very confident that this landmark deal will benefit both of our nations coming out of the pandemic. 

I made a commitment to the Australian people that the Government was and will be taking action to shore up our fuel security and enhance our ability to withstand global shocks. This Lease Agreement is an integral element of that commitment. 

The deal and establishment of Australian Government-owned oil reserves also acts as a down payment for Australia's longer term fuel security. We'll be making soon further announcements on the next steps on our domestically focused fuel security package and that will explore looking at onshore storage with industry and better understanding the long term viability of our refining sector. 

Now, not only will this Agreement contribute to Australia's IEA compliance and strengthen our fuel security, I'm optimistic that other countries will look to this as a model for success and see the opportunities that the SPR presents for boosting efforts to stabilise and boost global oil markets. 

I know that's important to both Australia and the United States, that we have a stable global oil market. We are a major participant. As the largest LNG exporter in the world, that is obviously very close to linked to the oil market, and it is enormously important to us. 

Secretary, I'll happily promote the positive aspects of this deal with others. On that note, I want to express my sincere thanks again, and I hope there may be many more successful collaborations between our two nations for the years ahead.

ENDS