Thank you very much for having me today.

This group has as its mission a laudable goal - furthering the relationship between Turkey and the United States. The Council does an excellent job, and all of you are to be commended for helping strengthen the bond between our peoples.

I was on just such a mission to enhance these relations two weeks ago. I traveled to Azerbaijan, joining a number of heads of state - including President Sezer at the First Oil opening ceremony for the Baku-Tbilisi-Ceyhan Pipeline.

As I am sure many of you know, the opening of the BTC pipeline is an extraordinary achievement. It represents the culmination of more than a decade of hard work, countless hours of diplomatic negotiation, and the investment of billions of dollars in capital. The pipeline will deliver oil from the Caspian Sea through Georgia to the Turkish Mediterranean coast - a total of 1,760 kilometers - and on to world markets.

Ultimately one million barrels per day will flow through this pipeline from the geographically isolated Caspian to the open waters of the Mediterranean, a significant amount of oil at a time when production capacity worldwide is so tight.

During my time in Baku, I had the opportunity to meet with President Sezer and Energy Minister Guler, and our discussions were very rewarding.

At a dinner in honor of the pipeline, my wife Dianne and I had the privilege to sit next to President Sezer. We talked in great depth about the US-Turkish relationship and about Turkey’s role in the world in the 21^st century.

Perhaps the highlight of the dinner came when President Aliyev of Azerbaijan brought out a large troupe of entertainers from the region to perform. Included in the group were a number of Turkish dancers and musicians. Prince Andrew, with whom we were also sitting, immediately pointed out the similarity of these dancers to traditional Irish step dancers - Riverdance on the Bosporus, so to speak. And the musicians played instruments that were surprisingly similar to Scottish bagpipes.

So for all the talk we often hear of Turkey as the bridge between Asia and Europe, it seemed to me that there has been an express lane to the British Isles in place for some time.

It gives me great pleasure to be here today to talk about the Turkish-American relationship about our shared energy challenges and about the future of global energy markets - in which both the United States and Turkey will play key roles in the decades to come.

I am very enthusiastic about the Turkish-American relationship in the 21st century. Our nations already are friends; we are allies in NATO in the battle against terrorism. Both nations are examples to the rest of the world of the fruits of democracy.

And I am convinced that our friendship will only grow more robust. Previously, for instance, our commercial relationships have been mainly on the military side. But in the coming years, the U.S.-Turkish relationship will be marked by much broader business collaboration in everything from textiles to telecommunications. And, of course, energy.

This is an exciting time for Turkey. Part of the reason for this excitement has to do with what everyone hopes is Turkey's full entry into the European Union.

A large measure of this excitement also is due to the opening of the BTC pipeline. This extraordinary development comes at a time when the world’s energy challenges are coming more clearly into focus.

Serious challenges loom over the next few decades. And these are problems that face not just Turkey, and not just the United States - but every nation on the planet that is interested in economic growth in improving the lives of its citizens and in raising standards of living.

The emergence of free economies, coupled with affordable supplies of energy, has led to amazing economic growth around the planet. We are witnessing it in Asia - particularly in China and India - and we have great hopes for Central and South America, Africa, and Eurasia.

Global economic growth is a blessing for all people. But with the blessing of worldwide economic expansion comes a corresponding jump in the worldwide demand for energy.

At present, the world consumes 82 million barrels of oil each day, a number that oil suppliers are straining to meet. Our experts anticipate that the demand for oil will jump by 50 percent in the next two decades.

Consider that, by the year 2025, the world is slated to consume 120 million barrels of oil each day.

We have all heard it said that energy is the lifeblood of any economy. Oil, gas, and electricity are critical to a functioning and growing nation.

For all nations, economic and social well-being depend on safe, affordable, and dependable supplies of energy.

It becomes very clear, then, that the question of energy security is not just a question of economic security, but of national security as well.

This is particularly true for both the United States and Turkey. We are both net importers of oil. In the United States, demand for oil far outstrips domestic production. Turkey has very limited quantities of oil reserves, and currently imports more than nine out of every ten barrels of oil it consumes.

This situation will continue to be the case for our countries for the next several decades.

Relying on such a large share of imports obviously carries risks to energy security. The challenge, then, is to look for ways to minimize that risk. President Bush outlined methods for minimizing risk and maximizing energy security with his National Energy Policy in 2001. He called for developing a diversity of the fuels we use, and a multiplicity of the sources from which we get them.

Given Turkey's reliance on foreign sources of oil, the same point must be made. Fortunately, Turkey is poised to take the steps necessary to ensure its energy security.

Turkey will require billions of dollars of investment over the next few decades to meet the anticipated growth in energy demand. By ratifying the Energy Charter Treaty, and by passing legislation to liberalize laws governing the energy sector, Turkey is on its way to creating an environment conducive to the investment the future requires.

What is also significant is that with projects like BTC, the country is increasingly becoming a critical hub for regional, and therefore global oil and gas traffic.

BTC … Blue Stream … the South Caucasus Pipeline … This network of pipelines will guarantee access to a multiplicity of sources of oil and gas for Turkey’s citizens and industry. You’ll have to pay for fuel, but at least you will have access to it.

More than that, these infrastructure projects also position Turkey as a critical player in the 21st century economy as other nations seek answers to their energy problems.

A good example, in addition to the oil that will flow to Europe and other markets through BTC, is with natural gas. The Caspian region’s gas holdings possibly are more significant than the oil holdings.

Completion of the South Caucasus Pipeline will make the extensive gas reserves in the Shah Deniz fields available to markets in Azerbaijan, Georgia, Turkey, and elsewhere. Particularly with respect to Georgia, this will mark a significant advance for regional energy security. In this regard, we will see one more instance of Turkey acting as a friend and partner to its neighbors, as we have seen so many times before.

With each of the projects I just mentioned, Turkey stands to do good, and to do well.

Turkey will do good by facilitating the expansion of supply and suppliers. The benefits will be felt not just in the producing nations of the Caspian, but in every country that buys oil and gas on the world market.

And Turkey will do well by reaping billions of dollars in transit fees as it develops into a global energy corridor … fees that might go to improve infrastructure, build a liquefied natural gas terminal at Ceyhan, or to any of a number of other worthy projects that will improve the lives of the Turkish people.

So let me take this opportunity to say that the United States supports these efforts underway. Moreover, we encourage the continued liberalization of the energy sector. And we encourage Turkey to continue taking steps that will improve the climate for foreign investment in oil and gas projects.

Energy security, however, isn't just about oil and gas. I hope that in the next decade or so we will see Turkey take positive steps with regard to coal, such as developing and employing clean coal technologies that permit the continued use of that resource with little adverse environmental effects.

I would also suggest that Turkey consider the benefits of clean, safe nuclear power. Nuclear power currently provides one fifth of the electricity in the United States. Worldwide electricity demand is projected to jump 75 percent in the next two decades. It would seem to me, then, that even with an increase in natural gas supplies coming from the Caspian, nuclear power can play a vital role in meeting electricity needs in a number of regions of the globe.

Before I go, I wanted to say a few words about the issue that seems to hover over any discussion of Turkey, and that is Turkey’s prospects for European Union membership.

It is well known that the United States government supports Turkey's bid. We are hopeful that it will happen sooner rather than later. The conventional wisdom holds that E.U. membership would be good for Turkey. That is certainly true. But less remarked upon is how Turkey's joining the E.U. would also be good for Europe. And that is a large part of why we support Ankara's efforts - it is as much for what Turkey has to offer Europe, as it is for what Europe has to offer Turkey.

For four millennia Turkey has stood at the crossroads of world history - from the early traders on the Silk Road to Alexander's armies to the glories of the Ottomans and the naval battles in the Dardanelles. I am convinced that Turkey has a critical role to play in the 21st century and beyond.

Much of that conviction has to do with the global energy trade I just mentioned.

But my feeling also has to do with modern Turkey's strengths, which are many.

Turkey is a vibrant, dynamic society. It has much to offer Europe, particularly at a time when a number of European nations are mired in economic stagnation. Turkey would offer its European partners new ideas, fresh perspectives, and a healthy outlook on the developing regions in Eurasia and the Middle East.

President Bush said last year that Turkey's membership in the E.U. "would be a crucial advance in relations between the Muslim World and the West, because [it] is part of both."

Moreover, as the President pointed out, a pluralistic and tolerant society like Turkey can serve as a beacon to those nations in the Muslim world where democracy and freedom must take hold.

So that is why I am excited about the role that Turkey will play over the next several decades. As a thriving democracy with a foothold in Asia and Middle East, it has the potential to help shape the modern world as the cause of democracy and self-government makes more gains around the globe.

And it has the potential to help ensure stable supplies of energy at a time when we know demand will surely increase.

Ladies and gentlemen, thank you, once again, for inviting me to be with you today.

I appreciate the opportunity to meet with you and to discuss some of the critical issues facing the United States and Turkey.

And I appreciate the interest each of you places in enhancing the friendship and collaboration between our two nations.

Location:
Mandarin Oriental Hotel<br>Washington, DC