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Hastings and Cardin Examine Russia’s Role as a Reliable Energy Supplier

WASHINGTON – On the heels of Gazprom’s buyout of British Petroleum’s Siberian gas field, Congressman Alcee L. Hastings (D-FL), Chairman of the Commission on Security and Cooperation in Europe (U.S. Helsinki Commission) and Co-Chairman Senator Benjamin L. Cardin (D-MD), held a hearing today, entitled “Pipeline Politics: Achieving Energy Security in the OSCE Region.” The hearing focused on conflict prevention and the security of supply and transit of oil and natural gas. More specifically, as the demand for energy continues to increase, disruptions in the source and transit of oil and natural gas can be a source of profound economic and political instability. This was demonstrated in January 2007 when Russia halted oil supplies to Belarus for three days, creating a ripple effect on shipments to western Europe. Current attempts at consolidation of oil and gas pipelines by Russia’s state-owned monopoly energy companies raise serious questions about the future of Europe’s energy security.

Testimony was given by Mr. Greg Manuel, Special Advisor to the Secretary and International Energy Coordinator, Department of State; Ambassador Steven R. Mann, Principal Deputy Assistant Secretary for South and Central Asian Affairs, Department of State; Mr. Matthew Bryza, Deputy Assistant Secretary for European and Eurasian Affairs, Department of State; Mr. Al Hegburg, Deputy Assistant Secretary for International Energy Policy, Department of Energy; His Excellency Yashar Aliyev, Ambassador of the Republic of Azerbaijan; His Excellency Mikhail Khvostov, Ambassador of the Republic of Belarus; Ambassador Keith Smith, Senior Advisor, Center for Strategic and International Studies; and Dr. Pierre Noel, Research Associate, University of Cambridge. Please find below statements made at today’s hearing by Congressman Hastings and Senator Cardin:

Statement from Congressman Alcee L. Hastings –

“Today’s hearing is the first of three hearings the Commission plans to hold on the topic of energy security, an issue that spans the security, economic and environmental, and human dimensions of the Helsinki process. This hearing series is designed to give the Commission a comprehensive picture of this complex issue and highlight areas where the Commission, the U.S. Government and the OSCE can take effective action.

“Today’s hearing will focus on conflict prevention and the security of supply and transit of oil and gas. The supply and transit of energy is often a source of insecurity and conflict. For OSCE participating States, the recent challenges faced when Russia shut off gas supplies to transit and consumer countries highlighted the potential for political and economic conflict.

“The second hearing in the series will focus on the development of democracy and civil society in countries with abundant energy resources. This problem is often referred to as the “resource curse.” In the economic sense, energy resources are a blessing as they provide countries with needed income, but these resources can also lead to unintended consequences such as stunted economic and political development.

“It is remarkable that only two of the world’s top 10 oil exporters are established liberal democracies. I hope I’ve piqued your curiosity on that one–you’ll have to come to the hearing to find out which countries they are. We’ll look at efforts to combat this “resource curse” through programs that seek to instill transparency and accountability into this payment system.

“The third hearing will address the nexus of energy security and environmental security, focusing on the diversification of energy supply and sustainable technologies. The quest for diversification of energy supplies and greater energy security gives consumer countries an opportunity to address the environmental challenges of energy supplies by adopting new technologies that not only decrease dependence on foreign sources, but also help address environmental concerns.

“But today we are going to take a geostrategic look at energy supply and transit. Specifically, we hope to address questions such as: What are the factors in ensuring reliable and predictable supply and transit of oil and natural gas? What is the United States doing to ensure our own energy security? And: What role does the United States have to play in Eurasian energy security?

“To answer these complex questions, we are pleased to have an excellent slate of witnesses. In addition to our exceptional (and unusually large) panel of U.S. government witnesses, I am quite pleased to welcome two distinguished Ambassadors from the OSCE participating States of Azerbaijan and Belarus. Both countries represent different aspects of the issue of energy security and we are pleased to hear their experiences and insights on how they view energy security given their geographic and political positions in the world.

“Clearly, during today’s hearing we are going to hear a lot about Russia’s role as a supplier of oil and natural gas. And notice I didn’t say “reliable” supplier—the jury is still out on that decision. Just in the past week President Putin stated that Russia has a major stake in forming “an infrastructure of trust” in the global and regional economies, including in the energy sector. That would be a welcome development, although many would say that there is already plenty of evidence to convict at this point based on Russia’s actions in the recent past.

“I want to state for the record that we did invite the Russian Ambassador to join us here today so that we could hear the Russian view on these issues, but he declined. That said, I am very pleased with the assembled witnesses here today. I will be interested to hear from our panelists on the prospects for improving the energy security situation, where they think Russia is going, and actions the U.S. can take to foster a more secure energy environment,” said Hastings.

Statement from Senator Benjamin L. Cardin –

“I am pleased that the Commission is focusing on energy security—a topic that binds all of the participating States of the Organization for Security and Cooperation in Europe (OSCE). We are truly all part of a global energy system that requires us to work together to achieve our common energy goals.

“It has become clear that real energy security requires not only reliable sources of oil and gas, but a decrease in dependency on hydrocarbons. Recently I introduced legislation that would create a framework for the United States to become energy independent in a decade, and put us on the path to become fossil fuel independent. For too long America has been held hostage by its reliance on foreign energy. Energy independence is critical for our national security and for our environment, and this bill provides a much-needed framework for developing a comprehensive energy policy for our nation.

“The Energy Independence Act would create a bipartisan Blue Ribbon Commission to study and review policy changes that are needed for the United States to achieve energy independence. Starting in 2009, the Commission would meet every two years and report to Congress on how to adjust our policies to achieve energy independence by 2017. Energy independence is defined as getting 90 percent of our energy needs from domestic sources.

“Petroleum accounts for 84 percent of our nation’s imported energy. Transportation accounts for approximately 28 percent of all energy used in the United States, so sourcing our energy domestically will require major changes in how we use our energy resources. I support raising CAFE standards, which could save more than 36 billion gallons of gas a year. There are other significant steps we can take such as creating standards for replacement tires, increased energy efficiency standards for buildings, and an increased availability of renewable energy products.

“A comprehensive energy policy must include conservation, greater availability of renewable energy sources and investment in our transportation infrastructure, including more funding for rail systems, buses, subways and light rail.

“Equally important, we need to become energy independent to protect our environment. Global climate change is a real danger to this country and we need an energy policy that will also make us friendlier towards the environment. We need greater investment in renewable sources of energy. Wind, solar, and biofuels all hold great promise for our future. But we need to make a firm commitment to investing in these technologies, to increase efficiency and reduce costs to the consumer.

“Energy security is not just about the high price of oil—this is also about helping to create a more stable and secure world. Our quest for hydrocarbons has led us to partner with countries that are either unstable or have horrendous human rights records. Real energy security means we can rely less on energy sources that come from unstable and unsavory countries. By removing the stranglehold they hold on our economy, we can more effectively address the economic and civil society developments in these countries. I know this aspect will be part of our second hearing in this series and I look forward to that discussion,” said Cardin.

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