Jeffrey Martin’s Keynote Address for the Gulf Coast Power Association
The Gulf Coast Power Association’s fall conference convened North America’s energy leaders at a time when our country has been hit hard by a series of challenges. As we continue to invest in Texas and the Gulf Coast region, Jeffrey Martin, chairman and chief executive officer of Sempra Energy, gave a keynote address emphasizing the importance of leadership during times of hardship and crisis.
“In times like this, it’s important that we show our strength – and our resilience,” said Martin. “Our economy is roughly 22% of global GDP. Getting America moving again is critical – and it’s important for all of us to recognize that the energy sector has an outsized role to play.”
Investment in energy infrastructure can drive economic recovery, while also connecting people to cleaner energy sources that aid the energy transition.
“Multilateralism and good energy policy will be part of the answer – but what matters the most is what we do as an industry,” said Martin. “We control the tools to both produce more energy and at the same time lower the carbon content.”
Texas, a long-time energy leader, provides a case study for how energy networks can be built to serve all stakeholders and why Sempra continues to invest in the state with our proposed Port Arthur LNG facility, which could be the largest of its kind, and our investment in Oncor, which serves more than 10 million consumers.
In his keynote address, Martin outlined the elements that he believes have made Texas’ energy sector successful over the last several decades:
- Moving to a retail electricity market to put electricity prices under competitive pressure;
- Expanding the state’s transmission system under the CREZ initiative;
- Continuing thoughtful oversight by the Public Utility Commission of Texas; and
- Investing in wind and solar generation backed by natural gas for baseload and grid support.
“I think by focusing first on getting the right market structure – and then supporting the build-out of critical new infrastructure, it put Texas ahead of many other power markets in the U.S.,” said Martin.
Population growth in the Gulf Coast region of the U.S. is forecasted to grow at rates well above the national average, presenting opportunities and challenges for the energy sector. To continue to advance its leadership position, Martin noted the Gulf Coast should embrace the following opportunities: growing production, investing in smart new energy infrastructure and leveraging technology.
“Every decade there is a ‘step change’ in innovation that makes us smarter and more efficient – and supports new and better ways to serve customers,” said Martin. “I think that needs to continue to be a priority as we look to the future.”
LNG Helps Lead America’s Energy Future
“Today, the U.S. trades LNG with more than 40 countries in the world, but for our future success, we believe the critical link is the continued build-out of new export facilities today to meet the shortfall in LNG that is expected in the middle part of the decade,” noted Martin. “Fundamentally, by bringing cleaner energy sources like LNG to new markets, we’re helping to improve the energy security of our allies, while at the same time creating jobs here at home and supporting the Texas and Louisiana economies.”
Martin noted the importance of a global perspective when considering LNG’s role in the energy transition. The energy networks of developing countries can differ greatly from the energy infrastructure seen in Texas and California. It is important to remember that we do not live in a closed loop system.
“The air we breathe in California was over China three days earlier,” said Martin. “That’s why our goal at Sempra Energy is to be ambitious. We think energy infrastructure plays a pivotal role here in the U.S. and abroad.” This includes:
- Electric transmission linking renewables in West Texas to load centers in Dallas;
- Pipelines taking natural gas from the Permian and Delaware Basins to help displace fuel oil in power production in Mexico; and
- LNG export facilities that give global allies a cleaner fuel option for power production and manufacturing.
At Sempra Energy, we are proud to put ‘Our Energy Behind Texas’ and the Gulf Region by participating in events like this. Now more than ever, we know that we have an important role to play in North America’s energy future.
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Factors, among others, that could cause our actual results and future actions to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: California wildfires and the risk that we may be found liable for damages regardless of fault and the risk that we may not be able to recover any such costs from insurance, the wildfire fund established by California Assembly Bill 1054 or in rates from customers; decisions, investigations, regulations, issuances of permits and other authorizations, renewal of franchises, and other actions by (i) the Comisión Federal de Electricidad, California Public Utilities Commission (CPUC), U.S. Department of Energy, Public Utility Commission of Texas, and other regulatory and governmental bodies and (ii) states, cities, counties and other jurisdictions in the U.S., Mexico and other countries in which we operate or do business; the success of business development efforts, construction projects and major acquisitions and divestitures, including risks in (i) the ability to make a final investment decision and completing construction projects on schedule and budget, (ii) obtaining the consent of partners, (iii) counterparties' financial or other ability to fulfill contractual commitments, (iv) the ability to complete contemplated acquisitions, and (v) the ability to realize anticipated benefits from any of these efforts once completed; 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expropriation of assets, the failure of foreign governments and state-owned entities to honor the terms of contracts, and property disputes; the impact at San Diego Gas & Electric Company (SDG&E) on competitive customer rates and reliability due to the growth in distributed and local power generation, including from departing retail load resulting from customers transferring to Direct Access, Community Choice Aggregation or other forms of distributed or local power generation, and the risk of nonrecovery for stranded assets and contractual obligations; Oncor Electric Delivery Company LLC's (Oncor) ability to eliminate or reduce its quarterly dividends due to regulatory and governance requirements and commitments, including by actions of Oncor's independent directors or a minority member director; volatility in foreign currency exchange, interest and inflation rates and commodity prices and our ability to effectively hedge the risk of such volatility; changes in trade policies, laws and regulations, including tariffs and revisions to or replacement of international trade agreements, such as the newly effective United States-Mexico-Canada Agreement, that may increase our costs or impair our ability to resolve trade disputes; the impact of changes to U.S. federal and state and foreign tax laws and our ability to mitigate adverse impacts; and other uncertainties, some of which may be difficult to predict and are beyond our control.
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Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) are not the same companies as the California utilities, SDG&E or Southern California Gas Company, and Sempra North American Infrastructure, Sempra LNG, Sempra Mexico, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.