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U.S. Policy on Eurasian Energy

"Any serious effort to address the complex, inter-related problems of Eurasian energy must be informed by humility," says Ambassador Richard Morningstar in the inaugural event for the European Studies Program's new European Energy Security Initiative.

Date & Time

Friday
Oct. 15, 2010
10:00am – 11:00am ET

Overview

"Any serious effort to address the complex, inter-related problems of Eurasian energy must be informed by humility," said, Ambassador Richard Morningstar in a speech at the Woodrow Wilson International Center for Scholars on October 15, 2010. "Trends that look obvious today can reverse, and quickly," he went on to explain. Morningstar's presentation was part of the Director's Forum series at the Woodrow Wilson Center and the inaugural event for the European Studies Program's new European Energy Security Initiative. His speech addressed the fast-changing environment of Eurasian energy needs and policies.

Morningstar began his presentation by addressing the realities of the current Eurasian energy environment. He said that this environment is no longer dominated by a "zero-sum" mentality and that "political will…is not alone sufficient for realizing major [energy] projects." He emphasized the importance of commercial leadership in Eurasian energy, a point he repeated throughout his presentation.

In the short to mid-term, Morningstar said the approach to energy in Eurasia needs to be focused on getting the most out of existing infrastructure. In this regard he highlighted U.S. efforts to make Ukraine's gas transit system more reliable, engage with Russia, develop transit systems for anticipated increases in Kazakh oil production, and coordinate energy security in Central and Eastern Europe. He also acknowledged the need to connect existing power networks within Europe and build new storage capacity and recognized EU efforts at doing so.

Despite this focus on efficiency in the existing system for the short term, however, he also identified a need for new, major energy infrastructure projects, saying "there is nothing that comes close to matching the reliability and economies of scale that large-capacity, dedicated pipelines or similar fixed infrastructure can provide."

Response to this need is already underway, and Morningstar pointed to more than a dozen projects at various stages of development. He said that the Obama Administration's approach to these projects is grounded in three core principles: Europe's energy security is in the interest of the U.S.; diversity of energy sources is good; and the best solutions are produced by the market.

Looking ahead, Morningstar projected that the near future will be a decisive period for Eurasian energy, pointing to three issues that will soon be clear:

  1. "There will be a Southern Energy Corridor," Morningstar said. He mentioned recent conclusions to a Turkish-Azeri gas purchase/transit agreement as evidence.
  2. It will become clear if Turkmenistan will contribute to the Southern Corridor by shipping gas across the Caspian Sea, or will focus on other routes for exporting energy sources.
  3. Importing energy supplies from the south - particularly Iraq - through the Southern Corridor appears more promising. In reference to this, Morningstar noted Prime Minister Maliki saying last year that Iraq could provide 15 BCM of gas to Nabucco and stated his own optimism towards a hydrocarbon law and revenue sharing agreement between Baghdad and Irbil.

Morningstar also mentioned a new agreement between BP and SOCAR that could bring additional gas to Southern and Eastern Europe from Azerbaijan.

Having mentioned all of these potential new projects, Morningstar re-stated the U.S. support for a Southern Corridor and said that Nabucco would be preferable out of the options but maintained that commercial issues "will ultimately determine which project gets the go ahead and with which sources of gas." He went on to say "although governments will continue to play a role, the markets will decide, or will at least have the strongest voice in making the decisions involved."

In concluding, Morningstar said that flexibility will be key in determining which new projects are realized, as changes in the Eurasian energy environment are frequent and "the markets reward those who can best adapt to change when circumstances require it."

Drafted by Drew Sample.

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Speaker

Richard Morningstar

Richard Morningstar

Former U.S. Ambassador to the European Union, former U.S. Ambassador to Azerbaijan, Founding Chairman at the Atlantic Council Global Energy Center
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Hosted By

Global Europe Program

The Global Europe Program addresses vital issues affecting the European continent, US-European relations, and Europe’s ties with the rest of the world. We investigate European approaches to critical global issues: digital transformation, climate, migration, global governance. We also examine Europe’s relations with Russia and Eurasia, China and the Indo-Pacific, the Middle East and Africa. Our program activities cover a wide range of topics, from the role of NATO, the European Union and the OSCE to European energy security, trade disputes, challenges to democracy, and counter-terrorism. The Global Europe Program’s staff, scholars-in-residence, and Global Fellows participate in seminars, policy study groups, and international conferences to provide analytical recommendations to policy makers and the media.  Read more

Environmental Change and Security Program

The Environmental Change and Security Program (ECSP) explores the connections between environmental change, health, and population dynamics and their links to conflict, human insecurity, and foreign policy.  Read more

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