Remarks by Ambassador Krol at the International Conference “Reliable and Stable Transit of Energy and the Role of Energy in Sustainable Development and International Cooperation”
Ashgabat, Turkmenistan
April 24, 2009
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| George Krol, Deputy Assistant Secretary of State |
I would like to begin by thanking the government of Turkmenistan for hosting this conference today and for sponsoring last year’s UN General Assembly resolution on today’s subject—a resolution my government proudly co-sponsored.
Both the resolution and today’s conference draw attention to an issue that is of vital and increasing importance to all of us gathered here today.
As a net energy exporter, countries like our host Turkmenistan rely on predictable, diversified, secure, and transparent energy markets to derive the fullest benefits from their natural riches, to anticipate and plan for future infrastructure investment needs, and to maximize access to both established and emerging markets worldwide.
Net importers like my own and many other countries represented here today rely on those same predictable, secure, diversified, and transparent market principles to develop reliable import contracts, anticipate market-driven price and supply fluctuations, and manage a long-term energy security strategy.
In other words, energy security policy is not a competition between producers and consumers. All of us -- producers, transit countries, and consumers of energy -- benefit from a system that provides transparency and security. The same principles that make energy markets work best for energy exporters are those that provide the foundation for sound energy policy for energy importers. The fact that both producers and consumers are coming together today to discuss these ideas in one room reflects growing acknowledgement of the many benefits we both can derive from this common understanding. Above all, such discussions can lead to more efficient markets that benefit ultimately our peoples and the global economy and global environment -- natural, political, and economic.
Energy infrastructure, including transit security, is essential both to producers and consumers. By reducing our vulnerability to the impact of natural and man-made disasters, changes in political situations, threats posed by terrorism, and energy theft, infrastructure security lays the foundation for stability key to well-functioning markets.
Secure access to energy is also central to facilitating economic growth. In a world of increasing demand for energy resources, expanding access to energy and enhancing security of supply are a crucial part of ensuring reliable and stable deliveries of energy resources to international markets.
The energy security concerns this conference is designed to discuss are strongly incorporated in my country’s foreign policy. Our international energy security strategy is inextricably linked to our domestic energy security strategy. Both advocate for: (1) greater diversity of energy sources; (2) wise use of energy through efficiency and conservation; (3) a diversity of secure and reliable energy supply routes; and (4) a diversity of energy suppliers working in an open and transparent energy marketplace free from political pressure.
In this time of fragile global financial and economic health, it is more important than ever to have a reliable international energy supply. Greater energy interconnectivity, as well as greater diversity, competitiveness, and transparency in energy markets, will help propel economic recovery and development and increase energy security overall.
The prosperity and security of each of our countries are intrinsically linked to secure, reliable, and diverse supplies of energy. The United States fully supports the efforts represented here today to think strategically and to develop a vision for improving the global energy infrastructure.
A microcosm of our international energy security policy, as well as the interplay between energy security and broader foreign policy, is contained in the very region where we are meeting today -- Central Asia. For that reason, I’d like to say a few words about how my government views this region.
A basic tenet of U.S. foreign policy in Central Asia – one which also impacts our energy policy – is to respect the sovereignty and independence of the countries in the region. We want to support partnerships throughout Eurasia, and we will advocate for those partnerships that respect the sovereign states in the region.
We acknowledge the need for interdependence that facilitates trade and investment among countries, but the United States also believes that a country’s sovereignty, independence, and prosperity are best enhanced and protected by increasing and diversifying trade ties. For this reason we strongly support the diversification of energy markets and transit routes, both among Central Asian states and between this region and broader international markets. Diversification does not come at the expense of long standing, traditional trade ties. Rather diversification can enhance these ties and provide efficiencies overall.
At the same time, we continually highlight the potential for and benefits of regional cooperation in Central Asia, which we believe will foster long-term, durable stability. Such interaction can facilitate expanded trade and economic prosperity, coordination on the use of crucial resources such as water and minerals, and in a number of other areas.
Since energy endowments differ among the countries of the region, there is potential for significant synergies in the energy sector as well. Some states in the region have tremendous potential as oil and gas producers, and others are rich in hydroelectric generation possibilities. Improved regional cooperation can leverage these comparative advantages in a way that benefits everyone, producers and consumers, and that contributes to a stable and prosperous regional economy.
Looking beyond Central Asia to global markets, pipeline and market diversification offers tremendous opportunities for both suppliers and importers. For instance, access to a stable and secure energy supply is one of the biggest challenges faced by firms seeking to operate in South Asia. Energy exports from Central Asia can offset this challenge while bringing increased growth and prosperity to the exporting states themselves.
That is one reason my country is an active participant in the effort to create a transmission corridor for electricity from Central to South Asia. Getting Central Asian-generated electricity to South Asia requires progress in Afghanistan, and the United States has been working actively with the international donor community to increase the availability of electricity in Afghanistan and to develop its resources.
Another area for regional energy cooperation with tremendous potential lies in the Caspian basin.
The U.S. helped in creating the Baku-Tbilisi-Ceyhan oil pipeline and the South Caucasus Pipeline to bring energy exports from the Caspian Basin to markets.
Kazakhstan already ships substantial amounts of oil via Azerbaijan to world markets. We hope to see that energy trade expanded and encourage the growing dialogue between Azerbaijan and our host, Turkmenistan.
Free market forces are key to developing the world’s energy resources, and tapping those forces will require tapping into the expertise of international energy firms.
In Central Asia, American and other private companies have the required technical expertise to handle the high sulfur, high temperature, high pressure and depth challenges that are often involved in developing gas fields in this region. Cooperating with the private sector in upstream investment and in expanding transit and export capacity is the most efficient and cost-effective means of capturing the full potential of the region’s natural resources.
The United States has long supported energy sector reform and regional energy cooperation in Central Asia. We emphasize sound regulatory frameworks, modernization, investment, and regional energy market development. We continue to believe that diversification, conservation, and investment in technology, and transparent marketplaces that give adequate space for private capital will help the region and the world economy by meeting and managing efficiently the growing demand for energy.
Specifically in regard to what American energy policy will look like under the Obama Administration, I would note that a balanced approach to global energy security is at the forefront of the Administration’s policy. This is evidenced by the early appointment of Ambassador Richard Morningstar as our Special Envoy for Eurasian Energy.
This appointment of a Special Envoy reflects the high priority the Obama Administration places on cooperation and dialogue on energy issues. Ambassador Morningstar could not be here today but he asked me to send all of you his sincere regrets that he could not attend this important conference due a prior commitment to participate in this week’s Sofia Energy Summit. He is, however, no stranger to Ashgabat or Central Asia. I remember traveling with him myself to Ashgabat in the mid 1990s. Ambassador Morningstar anticipates visiting the region shortly and looks forward to meeting many of you.
I will leave the more detailed discussion of our energy policy to Ambassador Morningstar when he meets with you in the future. But I can assure you he is very well aware of the importance and potential of this region and of the importance of energy security. And he is most anxious to work with all of you.
In conclusion, I once again wish to thank the wise and far-seeing leadership of Turkmenistan for hosting this important discussion and drawing attention to the issue of energy security. Thank you for the opportunity to speak to you today. The United States looks forward to working with all of you to continue our cooperation on creating a secure, reliable, and stable global energy framework that can benefit each of our countries and mankind in general.
