US-EU energy cooperation

18 November 2009

Richard Morningstar, US Special Envoy for Eurasian energy said there had been excellent cooperation between the US and EU in the field of energy in recent months, including the launch of the new EU-US Energy Council. This will strengthen transatlantic business dialogue, particularly in the areas of commercial and technical development and security.

The Council has three working groups: one on research and technological development, one on policy issues, such as regulatory frameworks; and the third on global energy security. It is chaired by US Secretaries of State and Energy, and European Commissioners for External Relations, Energy and Science and Research, although EU Member States and the EU Presidency country will want to be involved.

The Americans are taking a broad-brush approach to energy, he said, and this encompasses the Southern Energy Corridor, and the Nabucco natural gas pipeline.

The EU is working to integrate its energy market and taking steps to reduce dependence on both fossil fuel and a single supplier. and ensure any potential gas shut-offs do not have the same cataclysmic effect as last year.

Ambassador Morningstar welcomed the intergovernmental agreement among the five major country partners in the Nabucco pipeline consortium, but said there are issues to be resolved, such as where the first-phase gas supplies come from. The obvious place is Azerbaijan, but unresolved Azerbaijani-Turkish tensions currently prevent this. A second possibility is Turkmenistan, but this may not be realistic, given its commitments to supply Russia and China, and a third is Iraq, but this depends on the government reaching agreement with the Kurdish regional authorities.

As to US policy towards Russia, while the Southern Corridor does not involve Russian gas, Washington sees Russia is an important player in the region and is working on joint investment projects with Moscow. It also acknowledges that it will play a major role in the Baltic Sea, but wants to “depoliticise” the whole issue.

On Ukraine, Washington is working closely with Brussels to promote energy sector reform and avoid another gas shut-off. Unfortunately Ukraine missed an opportunity over the last 15 years to become totally energy independent, and while companies and countries want to invest in the country they are deterred by the difficult investment climate and political paralysis.