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Remarks by Secretary of Commerce Wilbur Ross at the U.S.-Japan Roundtable Washington Conference

AS PREPARED FOR DELIVERY

Thank you, Ambassador Morningstar for recognizing the need to create the Global Energy Center. We are all beneficiaries of all your hard work in promoting the great partnership that exists between the United States and Japan.

Thank you also to our colleagues from the Ministry of Economy, Trade, and Industry for being here from Japan. We greatly appreciate METI’s support for this, the 12th Annual U.S.-Japan Roundtable Washington Conference. And we especially look forward to hearing remarks from METI’s Deputy Commissioner of the Agency for Natural Resources and Energy, the Honorable Hirohide Hirai.

The United States struggled for decades to achieve energy independence. We finally accomplished that goal thanks primarily to the hydrocarbon industry’s embrace of innovative recovery technologies that have made the United States the world’s leading producer of oil and natural gas. We even supply some of Japan’s hydrocarbon needs.

Now, more than ever before, we need a similar technological revival of the nuclear power industry. Nuclear is and must remain an essential part of our energy mix long into the future. To make that happen, the United States is working with allies like Japan to assure the efficient licensing and construction of a new generation of inherently safe and economically viable reactors.

I’ll talk more about nuclear power in a few minutes but, first, I want to discuss how important the Indo-Pacific Region has become to America’s economic future. I just made a couple extensive trips through Asia, including stops in Singapore, Thailand, Vietnam, Indonesia, Hong Kong, and India. Last month I attended the Indo-Pacific Business Development Mission in Bangkok with 19 U.S. Ambassadors and Chiefs of Missions, and leadership from eight U.S. departments and agencies. During that trip, I led a delegation of 40 executives from American companies on a trade mission through the region. Earlier, I had joined Vice President Pence in Tokyo where we initiated the U.S.-Japan Economic Dialogue. These trips constitute part of a much broader strategy to make the Indo-Pacific Region a top priority of the Trump Administration.

When President Trump was in Vietnam in 2017, he outlined a vision for a free and open Indo-Pacific, in which all countries prosper as sovereign, independent states. The United States is fully committed to the region for a simple reason: The U.S. is an Indo-Pacific nation.

Trade between the U.S. and nations of the Indo-Pacific increased by 6 percent last year to a record of almost $2 trillion. That amount far surpasses U.S. trade with Europe which is $1.5 trillion, U.S. trade with South and Central America which is $1.2 trillion, and U.S. trade with Africa which is $89 billion. U.S. companies have invested $866 billion in the Indo-Pacific Region, that’s also an increase of 6 percent last year alone. And we certainly know how important Japanese FDI is to the U.S. economy. Total Japanese FDI in the United States was $489 billion last year, the third largest amount of any nation in the world.

In just the auto industry alone, Japanese producers have invested $51 billion in U.S. manufacturing facilities, and they employ nearly 750,000 American workers in their factories, across their supply chains, and at their dealerships.

And we continue to build our commercial relationship with Japan. Last year, the U.S. government launched the Asia “Enhancing Development and Growth through Energy” — or EDGE — initiative. The goal is to work with partners to provide energy to the 700 million citizens in the Indo-Pacific who lack all access to energy; and the nearly 2 billion people in the region who still rely on biomass for their basic energy needs. Through the Asia EDGE initiative, we are working with partners in Japan to create smart grids and the adoption of more efficient and resilient energy systems for the entire region.

We are also engaged in the U.S.-Japan Economic Dialogue’s Energy Cooperation Working Group, and the Japan-U.S. Strategic Energy Partnership, or JUSEP. This past September, Japan announced that it would increase its public and private financing for JUSEP activities by $10 billion. The funding will facilitate financing for projects to supply LNG, and to build LNG infrastructure in the Indo-Pacific region. Japanese financing for this program is being provided by the Japan Bank for International Cooperation, Nippon Export and Investment Insurance, the Japan Oil, Gas and Metals National Corporation, and private-sector investors.

Our strategic partnership with Japan runs deeper than what we are doing in the energy area. Just two months ago in October, the United States and Japan signed the U.S.-Japan Trade Agreement and the U.S.-Japan Digital Trade Agreement. Both agreements will create jobs, expand two-way investment, and promote fairness in our trade relationships with Japan.

They enter into force in two weeks — in fact on January 1, 2020 — and they set the stage for the start of negotiations in another four months for a larger new trade agreement between our two nations. They are part of the Trump Administration’s comprehensive trade strategy that includes passage of USMCA, hopefully tomorrow through the House of Representatives; the China trade deal announced just this week; and the renegotiated trade agreement with South Korea.

Now, with regard to nuclear power, President Trump is committed to revitalizing this industry. This past January, he signed into law the Nuclear Energy Innovation and Modernization Act, supporting the licensing of advanced nuclear technologies, and reforming how the NRC collects fees for licensing review. A few months prior to that, the President signed the Nuclear Energy Innovation Capabilities Act, updating the mission and objectives of DOE’s civil nuclear energy program. These were the first two nuclear-specific pieces of legislation signed into law since the Atomic Energy Act of 1954. Imagine, it’s been 65 years since we’ve updated our nuclear legislation. 

Just over a year ago on his third trip to Japan, Vice President Pence announced the negotiation of a memorandum of cooperation to promote civil nuclear power development in both the United States and Japan. I am proud to have been a co-signer of this memorandum on November 18, 2018, with Minister Seko of METI, Energy Secretary Perry, and Minister Shibayama of MEXT. The agreement builds on the long history of cooperation between the United States and Japan, and it also builds on our desire to promote the global leadership of our nuclear industries.

Similarly, following the horrible accident at Fukushima, the U.S. government and the American nuclear industry stood by our Japanese partners to provide critical support. Since the accident, the Commerce Department has organized multiple events known as “Fukushima Forums” to connect American nuclear technology companies with the ongoing work on decontamination and decommissioning.

Partnerships such as the one between Toshiba and AECOM signed on June 17, 2019, will be critical in achieving the safe and efficient decommissioning of the 24 Japanese commercial reactors that are being shut down. U.S. industry — with its decades of experience — is ready, willing, and able to help Japan achieve its decommissioning goals.

At the same time, we must work together to assure that the reactors built in the future are of optimum design and can compete with alternative sources of power. There are 53 reactors currently under construction globally, of which 10 of those in China; 7 in India; 6 in Russia; 4 in Korea; four in the UAE; only 2 each in the U.S. and Japan. There are another 107 reactors planned between now and 2030. China is contracting to build 43 of them, including 24 outside of its country; and Russia is planning to build 29 reactors, of which 23 outside of Russia. India is planning to build 10; Korea, 9; France, 5; and the U.S., 3. There are another eight reactors planned around the world, but vendors have not yet been finalized for them.

Certainly, Japan would benefit greatly by having a fleet of new, inherently safe reactors. Japan is less than 10% energy self-sufficient, ranking it 34th in the world in 2017. Nuclear dropped from 25 percent of Japan’s electrical output prior to the accident, to 3 percent in 2017, with growing dependence on coal, LNG, and oil for electrical generation. Both Japan and the United States need a new nuclear capability as we become increasingly electrified, and replace old and inefficient electrical generating capacity. So, too, does the world, as more people are buying more electronic gadgets, as the transportation sector shifts to EVs, and as the need for desalination grows.

Last year, total global demand for electricity exceeded 23,000 Terawatt hours. The IEA projects demand to grow by more than 13,000 Terawatt hours by 2040. And, I should note that past projections of electrical demand growth have all been at least matched, if not exceeded.

Of those 13,000 Terawatt hours of new electricity demand, two thirds will be in the Indo-Pacific Region, including China, India, and Southeast Asia. To achieve sustainable global development on a real scale, and to balance electrical demand when renewables are not available, then nuclear must be a viable option. If the U.S. and Japan don’t lead this renaissance, then somebody else will. We jointly have the technical knowhow and the operational experience to design and build a new generation of reactors. Now, we need the will-power to do so.

One of the highest priorities for the Department of Energy is the Versatile Test Reactor. It is our means to revive and expand our nuclear energy sector, and to assure that there are young people in the pipeline for the preservation of our nuclear industry. The Battelle Energy Alliance has selected GE Hitachi Nuclear Energy and its PRISM technology along with Bechtel National to support DOE in advancing reactor designs, and for developing cost estimates for building a test reactor by 2026. 

We are also pleased that Japan’s newly announced Nuclear Energy Innovation Program Initiative will include projects with U.S.-affiliated companies like NuScale Power, Advanced Reactor Concepts, and Hitachi-GE. The Trump administration will continue to pursue all opportunities to support the industry and level the playing field for U.S. civil nuclear exporters and our partners from market-based economies such as Japan.

So, I thank you for the opportunity to be here with you. I look forward to hearing the recommendations that come from today’s discussions. And I pledge to work with all of you as you provide millions of humans with the electricity they need to have comfortable and fulfilling lives. Thank you, and have great day.
 

Leadership