Public Statements 2008
Remarks by Deputy Chief of Mission, Thomas M. Countryman at the Athens Summit on Climate Change and Energy Security
Hilton Hotel, 4:30 p.m.
May 5, 2008
(as prepared)
Ministers, Ladies and Gentlemen: It is an honor for me to speak about the issue of energy security, on a panel with such distinguished colleagues.
The Government of Greece, like all its Allies and neighbors, is focused on the question of energy security, obtaining an ever more diverse supply of reliable and clean energy resources. This is also the goal of my own government, which, like yours, is blessed with a rapidly-growing economy.
In the United States, we believe that energy security is tightly linked with economic prosperity and national security. Every key U.S. foreign policy objective, including support for democracy, trade, sustainable economic development, poverty reduction, and environmental protection relies upon safe, reliable and affordable energy supplies. As President Bush said: "Extending hope and opportunity depends on a stable supply of energy".
A big part of Energy security policy is energy diversity. Energy diversity is good for both consuming and producing nations and improves energy security by reducing dependence on any one type of energy. It reduces pressure on traditional energy markets, and is good for the environment.
As you all know, Greece is undertaking a major effort to transition itself away from being purely a consumer country of hydrocarbons to being a transit country as well. It is therefore a country whose policy decisions will increasingly affect not only itself, but the global market at large.
I am speaking, of course, about Greece's efforts to realize the Burgas-Alexandroupolis oil pipeline, the Turkey-Greece-Italy gas Interconnector, and most recently the South Stream gas project.
Let me start with Burgas-Alexandroupoli. The United States welcomes this development. Since many people in Athens believe the opposite of what I just said, let me repeat it: The United States government welcomes and supports construction of the Burgas-Alexandroupoli oil pipeline, for exactly the reasons Ms. Loverdou cited. It is important to find and develop routes for delivering oil from the Caspian and Black Sea regions that provide an alternative to the Bosporus Straits, the world's narrowest strait used for international navigation.
Burgas-Alexandroupolis will reduce the transit cost in general for Russian and Kazhak crude oil coming out into the world market. All of this will be good for consumers, producing more choice, and hopefully reducing upward cost pressures in the oil market. It will also help reduce the chances of an environmental catastrophe in Turkey. In short: win-win-win.
Greece's moves on the gas front have even further-reaching ramifications. In gas, as in oil, the United States wants to see more competition for consumers. What we see today in Europe’s gas market is an enormous system of gas infrastructure that leads from Western Siberia and Central Asia to Europe. As you all know, this is the Gazprom network, and it's a good thing it is there. It keeps Europe warm and in light throughout the winter. It is operated relatively reliably, depending upon which country you have lived in for the last few decades. Without it, Europe's energy situation would get a lot more difficult.
However, as the Siberian fields that Russian producers have exploited for the last few decades deplete, we believe the next major increment of gas for Europe is likely going to come from the Caspian region. And one of the ways that gas is going to be delivered to Europe is through the Gazprom network, including the new North Baltic Pipeline. But the other way that Caspian gas can move to European markets is from Azerbaijan, across Georgia and Turkey to the European Union.
And that is the route that Greece is doing so much to realize through its support for, and participation in, the Turkey-Greece-Italy gas Interconnector, or TGI. This will provide the first corridor to bring Caspian gas and possibly other gas directly to Western markets. It will give Western consumers choices. It will bring competition. It will lead to better prices and larger quantities of gas into Western markets. It will directly support greater energy security and diversity for Europe.
But this is an opportunity that can be missed. Putting Caspian gas into TGI will require patience as this region's huge supplies gradually come on line, as technical problems are overcome. It will require a tremendous degree of cooperation and coordination between many of you in the room today, as well as financial creativity.
Greece has already shown that it has the capacity to achieve TGI: witness the historic inauguration last winter of the first stage of this pipeline, when the Turkish and Greek gas grids were linked at Kipi bridge. The result is that, for the first time, Caspian gas is now flowing directly to Europe. Greece, Turkey and Azerbaijan made this happen by working together. Now these governments must complete the task ahead, forging the final link of TGI with Italy.
The Greek government has said it is committed to completion of TGI. We welcome this commitment and will offer our support when requested.
A final word on TGI, about the source of its first gas: Azerbaijan. The Azerbaijani leadership – at the highest level -- has made a strategic decision to take the steps necessary to make TGI, and other Caspian Sea – Western European gas pipelines, a reality. President Aliyev has made it clear that he will do what it takes to work with his partners in TGI to make it a true alternative pipeline bringing a new source of supply to Western Europe. The latest estimates of Azerbaijani gas supply – not from the US government, but from private investors - show that, in spite of what many claim, there is more than enough gas for TGI and the initial phases of Nabucco – possibly for all of Nabucco. So there is a will and there is a way to realize this project, and I can assure you that all partners in this project will have our support and cooperation.
Before talking about South Stream, let me say a word about Russia. On the same day Prime Minister Karamanlis went to Moscow, we held in Washington the first meeting of the high-level US-Russia Economic Dialogue, Like Greece, the US wants to do more business with Russia. Like Greece, we want to buy energy from Russia. We want to do that in a transparent, competitive, market-oriented fashion.
Transparency and competition are our approach to energy sales, and for that matter to defense sales. Whether the US is buying or selling arms, we always prefer a process that is competitive – with several bidders involved, and transparent on price, quality and terms of the contract. Anything less than this does not serve the interest of the taxpayers, nor the interests of the soldiers, sailors and airmen who will use the weapons.
And another word about Gazprom. Gazprom is not a “bad guy” because it is Russian; it is not a “bad guy” because it is a monopoly. In fact, it is not a “bad guy” at all. But it IS a monopoly, and that is a crucial fact for both producers and consumers of natural gas.
Greece has now signed an agreement to participate in South Stream, a pipeline designed to run along routes close to those planned for Nabucco and for TGI.
Let me quote the reaction of our Deputy Assistant Secretary, Mr. Matt Bryza, because very few media quoted his actual words, “reports saying that we are somehow annoyed are fantasy. They’re manufactured reports. We’re not annoyed at all. It is up to Greece to do whatever it wants with its energy supplies.” If you want to see everything Mr. Bryza said, I think you need to go to our Embassy website.
To reiterate, we respect the Greek government’s right to establish its own energy policy.
In our view, the primary purpose of the South Stream pipeline is to delay or prevent construction of the Nabucco pipeline, which Brussels (and not Washington) has declared a priority project of the European Union. This is not an evil plot by Gazprom. This is not a conspiracy. This is straightforward rational self-interest on the part of Gazprom. Even if, as expected, South Stream is the most expensive gas pipeline ever built, if it can operate for several years without competition from Nabucco, it will expand the market power of Gazprom. This will be true not only on the consuming end in Europe, but also on the producing end in Central Asia.
It’s not a plot. It’s not a conspiracy. It’s just economics. But please note: it is NOT market economics. It’s monopoly economics, and within that context, it is optimal behavior for Gazprom. Consumers, on the other hand, optimize their interests when they purchase not only from Gazprom but from a wide choice of other providers.
Given a choice between a market-oriented, competitive pipeline, and a non-competitive pipeline, the United States will always prefer the competitive pipeline. That is what best unites the common interests of producers and consumers.
I understand that not everyone in this room agrees with our analysis, but I hope you see that our concerns about pipelines are driven by the economic issues involved, and NOT by big-power politics. Please keep three things in mind:
-- First, when it comes to decisions on Greek energy policy, the way the US prioritizes pipelines is NOT as important as the way Greece prioritizes pipelines.
-- Second, it is possible, as Foreign Minister Bakoyannis has said, for good allies to have different opinions on an issue.
-- and, third, as Matt Bryza said, we are NOT annoyed.
Enough about global energy. Let me close by telling you very quickly about an energy project we are working on at our Embassy. I'm very proud of it. Last month, Ambassador Speckhard signed our Embassy into the League of Green U.S. Embassies. Already seventeen Embassies and diplomatic missions in Europe, including ours, have signed a commitment to take concrete steps to increase energy efficiency and adopt environmentally responsible practices. Our Embassy specifically has started what we call the "Green Embassy Initiative" which aims to drastically reduce our net energy consumption. The most ambitious component of this initiative, so far, investigates the installation of photovoltaic panels on the rooftops of our buildings. We are currently working to install 100kW of these panels in the near future, and are working with Washington to approve a larger program as soon as possible.
We applaud the Greek Government for their focus on renewable energy initiatives, and given the location of the Embassy, hope our project stands as a strong and visible symbol of support for these initiatives in the future. We are excited to explore this ground-breaking project, in hopes that it will also motivate local companies to use alternative forms of energy. The fact is, preserving the environment is the moral responsibility of each and every one of us.
The steps we are taking at the Embassy are small compared to larger national initiatives. On April 16th, President Bush announced a new national goal to stop U.S. greenhouse gas emission growth by 2025. The growth in emissions will slow over the next decade, stop by 2025, and begin to reverse thereafter. To reach this goal, we will pursue an economy-wide strategy that builds on the solid foundation that we have in place. We believe these strong new laws and the principles the President outlined will help put the United States on an ambitious new track for greenhouse gas reductions. Our new 2025 goal marks a major step forward in America’s efforts to address climate change. As proud as I am of these new initiatives, U.S. action cannot stand alone. Even if we reduced our emissions to zero tomorrow, we would not make a meaningful dent in solving the problem without the concerted action of all major economies.
Recent reviews have shown that emissions in China alone have surpassed those of the United States. Our belief that effective global efforts to combat climate change must include the developing world is the foundation of our ongoing efforts to address climate change via the Major Economies process. Last week, the Major Economies group met in Paris to lay the groundwork for the world leaders' climate meeting to be held in conjunction with the G-8 summit in July. At the Major Economies leaders' meeting in July, we will seek agreement on a long term global goal for emissions reductions, as well as agreement on how national plans will be part of the post-2012 approach.
This approach must be environmentally effective and economically sustainable. To be effective, this approach will require commitments by all major economies to slow, stop, and eventually reverse the growth of greenhouse gas emissions. To be economically sustainable, this approach must foster the economic growth necessary to pay for investments in new technology and to raise living standards. Rather than drastic emissions cuts that have no chance of being realized and have every chance of hurting national economies, we believe in setting realistic goals consistent with advances in technology, while increasing our energy security and ensuring that our economy can continue to prosper and grow.
At the same time, we are committed to make national and multilateral steps to address our own emissions growth. These steps are on par with what Europe and other developed nations are making, and we have national plans to go further. The centerpiece of our strategy is in setting high, but realistic goals. We believe that it is essential for other nations to do the same. To be economically sustainable, this approach must foster the economic growth necessary to pay for investments in new technology and to raise living standards. We must help countries in the developing world gain access to the technologies, as well as financing that will enable them to take a lower carbon path to economic growth
In closing – addressing energy security and climate change requires the same concepts: Cooperation and Alternatives. With so much focus in the media on the affect on investors of the competition between pipelines – what is often missed is the progress being made through bilateral and multilateral agreements to pursue each pipeline. This cooperation, bodes well as we all seek to address emission rates, as well as we seek to promote alternate and renewable energy sources. Diversity of supply – be it in oil, natural gas, or in methods for harnessing renewable energy is vital in ensuring energy security for all involved. In the pursuit of hydrocarbon pipelines, this equates not to a multiplicity of pipelines but a diversity of supply. In relation to climate change, determining diverse and effective yet realistic goals for individual countries to reduce emissions. And finally following actions such as the Greek Government’s - in the promotion of a multitude of renewable energy programs.
I would like to thank the organizers of this conference as well as my esteemed colleagues on the panel, and I look forward to hearing the next discussions.