WEBVTT - US Energy Chief Chris Wright Talks China Tariffs, US Energy Production

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. So here's the asis

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<v Speaker 1>this morning. China raising tariffs to one hundred and twenty

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<v Speaker 1>five percent on all US goods after the White House

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<v Speaker 1>clarified China faces a one hundred and forty five percent

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<v Speaker 1>tariff ray on exports to the United States. I'm pleased

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<v Speaker 1>to say that joining us now is the seventeenth United

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<v Speaker 1>States Secretary of Energy, self described energy nerd turned entrepreneur

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<v Speaker 1>now dedicated his time to public services. Miss the Secretary,

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<v Speaker 1>Chris Wright, thank you very much for joining Bloomberg's surveillance

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<v Speaker 1>this morning. We appreciate your time. We just wanted an

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<v Speaker 1>initial reaction from you to the tariffs we heard retaliated

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<v Speaker 1>by China overnight. What's your reaction this morning, Sir.

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<v Speaker 2>Oh, I think you see we're right in the midst

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<v Speaker 2>of a negotiation. This is home territory for President Trump,

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<v Speaker 2>both in his business career and his first term as president.

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<v Speaker 2>You know, he reads the marketplace, he engages with people,

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<v Speaker 2>he uses leverage, and we're going to get to a

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<v Speaker 2>great result. We're seeing in the midst of it right now,

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<v Speaker 2>but I'm quite optimistic about where we're going.

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<v Speaker 3>Well, the United States has already slash it's forecast for

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<v Speaker 3>global oil demand. If we continue on this path of

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<v Speaker 3>a trade war, do you expect demand to continue to decelerate?

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<v Speaker 2>Oh, Their prediction of the demise of demand growth for

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<v Speaker 2>oil is older than I am. So Look, there's cyclical

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<v Speaker 2>factors on economic growth that do impact that. The long

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<v Speaker 2>term growth rate of oil little more than a million

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<v Speaker 2>barrels of oil per day per year, has been going

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<v Speaker 2>on for decades. I don't see any big change in

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<v Speaker 2>that and the foreseeable future. You see a marketplace right

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<v Speaker 2>now that is worried about economic growth, and I think

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<v Speaker 2>you're seeing some softening and oil prices from that. But

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<v Speaker 2>I think that fear. I think that fear is misplaced.

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<v Speaker 2>I think we're going to end out in a better

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<v Speaker 2>economic situation than we went into this Trump term, I

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<v Speaker 2>think by a long shot. Look, two things are driving

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<v Speaker 2>tariff policy for President Trump. One is we've been very

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<v Speaker 2>welcome to exports from other nations. We want other nations

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<v Speaker 2>to be just as welcoming of US exports so we

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<v Speaker 2>can grow our exports more in line with our imports.

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<v Speaker 2>And President Trump wants to see America reindustrialize, investment, jobs,

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<v Speaker 2>and heavy industry back in our country. Both those are

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<v Speaker 2>going to be wonderful for the United States.

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<v Speaker 3>Well, it's not just a softening of oil prices, mister secretary.

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<v Speaker 3>I'm sure you've seen that since Trump's inauguration, prices are

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<v Speaker 3>down more than ten dollars. At what level do you

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<v Speaker 3>think you can see drill baby drills? The President likes

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<v Speaker 3>to call it when it comes to shale producers, because

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<v Speaker 3>what we're hearing is that they cannot do this if

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<v Speaker 3>price is fall below fifty dollars a barrow.

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<v Speaker 1>Yeah.

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<v Speaker 2>Look, investment decisions of oil and gas companies in the

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<v Speaker 2>US and abroad are based on a little bit of

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<v Speaker 2>multi year view of oil and gas prices. They're not

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<v Speaker 2>moved based on the spot price of oil today, or

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<v Speaker 2>oil last week or oil next week. So these are

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<v Speaker 2>longer term decisions that are being made. We saw oil

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<v Speaker 2>and gas prices move down immediately after President Trump was elected,

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<v Speaker 2>and that was the market seeing, oh yes, all the

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<v Speaker 2>nonsense that's tried to kill the oil and gas industry,

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<v Speaker 2>promised it'll be over soon, stopped giving permits on federal lands.

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<v Speaker 2>All that stuff is going away, and so there's much

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<v Speaker 2>more of a green light on production so if you

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<v Speaker 2>put more supply into a marketplace, you're going to get

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<v Speaker 2>lower prices. Now we're seeing, as they said, that sort

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<v Speaker 2>of extra fear of world economic growth in the next

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<v Speaker 2>few months over the tariff dialogue. That's real fear, But

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<v Speaker 2>I think the marketplace may be discounting the wrong answer here.

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<v Speaker 2>We're going to see very very positive economic growth in

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<v Speaker 2>the next few years, But is it still realistic?

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<v Speaker 3>Were talking about adding the United States adding another three

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<v Speaker 3>million barrels of production at these prices.

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<v Speaker 2>Well, I think you're referring to Scott Besson's plan there,

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<v Speaker 2>and his three millions was three million barrels of oil equivalent.

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<v Speaker 2>Most of that growth will come from natural gas, and

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<v Speaker 2>of course the domestic demand for natural gas with the

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<v Speaker 2>growth of AI resourcing, manufacturing, and our surging exports. Boy, yes,

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<v Speaker 2>we will grow oil equivalent production by at least that

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<v Speaker 2>much during President's term, but we will also grow oil

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<v Speaker 2>production and other liquid natural gas liquid production in the

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<v Speaker 2>United States as well. So absolutely are we going to

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<v Speaker 2>see strong growth in American energy production one hundred percent.

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<v Speaker 3>Mister Secretary, You've been on a tour in the Middle

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<v Speaker 3>East for about two weeks since our understanding that before

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<v Speaker 3>Saudi Arabia decided to add even more barrels to the market,

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<v Speaker 3>there was a conversation, a dialogue between the Trump administration

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<v Speaker 3>and the Kingdom. Can you give us a sense of

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<v Speaker 3>what the dialogue looked like. Is the United States supportive

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<v Speaker 3>of OPEC plus adding more barrels to this market.

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<v Speaker 2>Yeah, we don't directly coordinate on oil production policies or whatever.

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<v Speaker 2>That's certainly an OPEX purview. But I don't think anyone

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<v Speaker 2>in the world misunderstands President Trump's desire to see more

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<v Speaker 2>energy produced, therefore lower prices and more economic activity. Absolutely,

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<v Speaker 2>that's President Trump's agenda. Look at his agenda can be

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<v Speaker 2>summarized as prosperity at home and piece abroad. Lower oil

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<v Speaker 2>prices help both of those, and the piece abroad that's

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<v Speaker 2>the most concern right now. In the region where I

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<v Speaker 2>am in the Middle East is Iran. Iran. Over during

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<v Speaker 2>the Biden administration, oil prices were higher. There was sort

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<v Speaker 2>of an appeasement attitude and no strong enforcement of sanctions,

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<v Speaker 2>enormous funding de Hamas to Hezbollah, to the Huthis, and

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<v Speaker 2>a rapid advancement of their nuclear program. President Trump's agenda

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<v Speaker 2>is exactly the opposite of that. It's peace through strength.

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<v Speaker 2>But we simply cannot and will not accept a nuclear

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<v Speaker 2>armed Iran.

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<v Speaker 3>Well, when it comes to Ron, we saw even more

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<v Speaker 3>sanctions on the regime yesterday. When it comes to these

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<v Speaker 3>oil sanctions, the President has said he wants to go

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<v Speaker 3>back to maximum pressure. Is that part of the conversation

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<v Speaker 3>you're having with golf allies on this tour that they'd

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<v Speaker 3>be willing to step in if some of those Iranian

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<v Speaker 3>barrels come off.

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<v Speaker 2>The market just from the United States production itself and

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<v Speaker 2>the size of the global oil market today. Absolutely, we

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<v Speaker 2>can tolerate squeezing out Iranian exports that And of course

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<v Speaker 2>do all the Gulf neighbors want the same thing we want?

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<v Speaker 1>Yes.

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<v Speaker 2>Do they fear a nuclear armed Iran? Absolutely? Do they

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<v Speaker 2>think now is the time to turn the screws and

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<v Speaker 2>end Iran's nuclear weapons program? Absolutely? But yeah, can the

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<v Speaker 2>world tolerate that? Absolutely? Ten years ago, twenty years ago,

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<v Speaker 2>could this have happened? No? But today we both have

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<v Speaker 2>large American oil production, better relations with our neighbors, and

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<v Speaker 2>a strong resolute leader. In forty years of trouble, forty

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<v Speaker 2>five years of trouble from Iran. We've never had a

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<v Speaker 2>better chance to reduce Iranian power, reduce Iranian tyranny in

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<v Speaker 2>the Middle East, and we don't want to miss that opportunity.

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<v Speaker 3>Mister Secretary. The President has said a lot, even recently

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<v Speaker 3>to me on Air Force One. He likes that. Guess

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<v Speaker 3>oil prices are coming down. Do you and the President

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<v Speaker 3>have a price in.

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<v Speaker 2>No, my whole life, I've avoided predicting prices or dictating prices.

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<v Speaker 2>You know, we have a wonderful free market economy. That's

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<v Speaker 2>what makes the world wealthier. That's what allows consumers to

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<v Speaker 2>continually re express choices in every direction. So no, there's

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<v Speaker 2>no formula for a good oil price. There's just a

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<v Speaker 2>broader belief that lower cost diesel, lower cost gasoline, lower

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<v Speaker 2>cost home heating, lower cost electricity, all of those are

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<v Speaker 2>good for American consumers and good for businesses. That's President

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<v Speaker 2>Trump's energy agenda, and I'm here to implement it.

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<v Speaker 1>Miss the Secretary, appreciate your time this morning, this evening way.

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<v Speaker 1>You thank you very much for being with blimpbacks Tava.

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<v Speaker 1>The Energy Secretary there, Chris Wright,