U. S. State Department Bureau of Energy Resources input on energy and climate at Central Europe’s Tatra Summit

Tatra Summit is an initiative of the Center for European Affairs (CEA), begun with the immodest goal of shaping the future of Europe.

Launched in 2013, it periodically brings together a diverse group of leaders to discuss important European topics. There is a meeting happening now during the period of November 4-6, 2015. This morning, there was a panel discussion titled Fueling Energy Union: Boosting Economic Growth and Protecting EU’s Interests held in the Grand Hotel, River Park, Bratislava, Slovak Republic.

fdfahddeRobin Dunnigan — Deputy Assistant Secretary for Energy Diplomacy, Bureau of Energy Resources, U.S. Department of State — was one of the five invited panelists.

Right before Ms. Dunnigan began her remarks, Vazil Hudak, Minister of Economy Slovak Republic, requested the opportunity to say a few additional words in response to Maroš Šefčovič, the Vice President for Energy Union of the European Commission. Though Mr. Šefčovič spoke for about 10 minutes about energy sources and climate change, mentioning coal, oil, gas, wind, and solar, he did not say a word about nuclear energy.

Here is a clip that includes Mr. Hudak’s short remarks emphasizing the importance of treating all sources of clean energy, including nuclear energy, fairly from a policy point of view.

Following Mr. Hudak, Ms. Dunnigan spoke for ten minutes. Like Mr. Šefčovič, she did not let the ‘N’ word pass her lips.


Julian Popov: Thank you very much. Just one sentence from Mr. Hudak.

Vail Hudak: I think it’s a really very important issue for this discussion and maybe overall. Which is the question mark of whether a move toward environmentally friendly climate related production is consistent with increasing the competitiveness of the European economy.

Because we are now maybe in the second phase of what Mr. Topolánek described in terms of the climate change type of energy. Especially in terms of the introduction of renewables, where we are in the stage of some kind of paranoia or bad feelings because all of us are suffering from the cost of renewables in our energy mix.

And also in Slovakia we have to subsidize the production of renewables. We believe this is just the second phase and maybe we will move into a new phase. This is equivalent to what Marc mentioned that there is an overall push towards cleaner energy, a cleaner environment which is global.

Rich Chinese and even middle income Chinese are moving out because they are seeking a cleaner environment. So there is another push in this direction. There are technologies which have been introduced that are making the production of renewable energy sources much cheaper. Europe was always different from the other parts of the world by being able to capture the new innovations and new technologies and to be the leader.

Just one point I want to mention is that while we are doing this — and I think it is the right process to move towards clean energy and to look at energy from the point of view of climate change — we have to be sensitive to the internal economy and to the prices. And one of the issues that is important to Slovakia is the move towards, for example, the goal of 40% reduction of CO2 by 2030 – the overall goal for the EU – from our point of view should be neutral in terms of the types of clean energy being used.

For us it means that our national energy mix, which includes a very big portion of nuclear energy, nuclear production should be kept and we believe that this is also a contribution to the clean energy production.

Julian Popov: Mr. Šefčovič already introduced the relationships with the US in the area of sanitization, electric cars, smart grid and so on. So, Robin Dunnigan, what is your take from US point of view about energy union and energy security of the European Union and the neighboring states. Because from your point of view you have posed a great interest in the stability of Ukraine and also other neighboring states.

Robin Dunnigan: Thank you. And thank you for actually including a US official into this conference and to the organizers. One of the questions is why do you have an American up here on the stage talking about European Union energy security.

And I have to say that I’m actually from our foreign ministry. The State Department is our foreign ministry and we’re the only foreign ministry in the world that has an entire bureau — 100 people — dedicated to energy policy. And the reason for that is the recognition of the essential interconnection between energy policy and our national security.

Really it centers around a trifecta of interests, our economic growth, our geopolitical security and our climate goals. Energy policy is essential to all three of those national security objectives. And the energy security of our partners, especially here in Europe, is equally important to our national security. So we have worked hand in hand with the European Union and bilaterally with member states for years before the energy union, even.

Starting back in the 1990s with the Baku–Tbilisi–Ceyhan oil pipeline to support diversification. As far as the energy union, we applaud the efforts of the vice president and the commission on the energy union strategy and plan. In fact, I joined the vice president last February in Latvia when the energy union proposal was launched. When you look at the essence of what’s proposed in the energy union, diversification of fuel types sources and routes, innovation, energy efficiency, cohesion and integration of infrastructure but also of policy.

This is really the core to energy security, the core. Diversification is absolutely essential. And it doesn’t just mean oil and gas pipelines. It means electricity markets. It means integrating renewables into the grid in a way that works. It means cohesion in regulatory policies.

So, we’re very big supporters of the energy union strategy. And through the US-EU energy council we’ve also worked closely with our partners, starting with the vice-president on “How do you translate this into action?” The work of the Commission to get the priority list of infrastructure projects down from two hundred thirty or forty to 14 or 10 real priority infrastructure projects was an important undertaking. And the agreement of countries to a list that didn’t include them was essential.

We’ve also advocated… You know there is a lot of talk about big mega pipeline projects, Turkish Stream, South Stream… there are small infrastructure projects that we can do, that can be done here, that will make all the difference. Interconnectors, important interconnectors such as an interconnector between Greece and Bulgaria. Southern gas corridor. United States, we don’t have a single company investing in the southern gas corridor to bring Caspian gas through Turkey and into Europe. And yet we’ve been huge supporters of it because it will bring non-Russian gas into a market and inject some competition.

We’ve also supported the Baltic energy projects. When Lithuania opened its LNG terminal a year ago, hugely important. It’s not a lot of gas coming in through that terminal, but it’s allowed Lithuania to renegotiate its gas purchase contract with Gazprom. Competition is always a good thing for prices — for the consumer.

We’re also supporters of an LNG terminal, a floating LNG terminal off the coast of Croatia. Again, inject some competition and allow for a different source of gas to come into that region. So we’re very big supporters of the energy union proposal. And we look forward to seeing that column of the “to dos” shrink and applaud you for those efforts.

If I could turn quickly to a couple of other things that were mentioned, starting with Nord Stream 2, or the Nord Stream expansion. We very much appreciate the comments of my colleagues up on the stage today because the United States is very concerned about Nord Stream 2. Maybe I can basked the concerns into two baskets. The first is regarding Ukraine. There are a lot of people in this room — and everybody on the stage — that has worked very hard over the last couple of years to support Ukraine. Slovakia, through its reverse flow of natural gas into Ukraine has been absolutely critical to Ukraine getting through last winter and this winter.

The EBRD has just… and through Ricardo’s personal work — a lot of work over the last year — has secured, among the many things the EBRD has done, has secured a loan for $300 million dollars to help Naftogaz purchase gas. The vice president and the commission worked tirelessly to get a gas agreement between Gazprom and Naftogaz. So, a lot of work to support Ukraine.

And you have to ask, why would you support Ukraine with one hand and strangle it with the other? I think that’s what Nord Stream 2… If it’s built in a way that cuts off all gas transit through Ukraine, if that’s the end result, $2 billion of revenue per year lost. That would be the end effect. We are very concerned of that being one possible outcome of Nord Stream 2.

The other basket goes back to this diversification of sources in Europe. There are a lot of possibilities. The vice president mentioned new finds in the eastern Mediterranean, off the coast of Egypt, Israel and Cyprus. We have US LNG hitting the market and I will get into that in a moment. The LNG market is going to look very different in five years than it looks today.

But all of these projects require a market in Europe to happen. Why are you as a developer going to, especially in today’s price environment, going to be exploiting resources, natural gas resources in the Eastern Med, or the second phase of [inaudible], or really use LNG terminals in Western Europe, in Spain, or in Greece. If you’re already getting another 55 BCM of Russian gas through the Nord Stream 2 expansion that locks in countries to long term contracts from the same supplier.

So I think Nord Stream 2 threatens not only Ukraine’s viability and their resources but is a risk to real diversification in Europe, especially in central and southeastern Europe.

Finally, I think I have to touch just on two more things. One is the US oil and gas exports. The vice president mentioned it. It’s one of the questions I’m most frequently asked in Europe. “When is the United States going to open its exports of liquified natural gas to Europe?” And I think as the vice president found in the United States, the oil question is something that’s being hotly debated in our Congress and not something that I’m going to resolve at my pay grade.

But talking about gas — every molecule of LNG that we are exporting over the next five years, and we haven’t started yet, but it will start to hit the market in early 2016 has been approved for export to free trade agreement countries and non free trade agreement countries. So all of the LNG that the United States will be putting on the market, and it could be over 100 BDM of gas has been approved for export to anywhere in the world, any customer. And ultimately commercial concerns will drive where that LNG goes, but our LNG that we will be exporting can go to Europe. And, in fact, a lot of European suppliers are already negotiating with US companies.

The question is, it doesn’t matter how much LNG we’re putting onto global markets or how much we’re exporting into Europe if once it gets to Europe it can’t move to any point in Europe from the place it got to, the place it entered. Again, this goes back to that project-based approach, building interconnects, making a really viable natural gas market here.

And finally, turning to energy efficiency, renewables the prime minister mentioned. Is economic growth and meeting our climate goals, are they not compatible? Can we do both? And we believe absolutely you can.

I spent a couple of weeks recently in Silicon Valley, the technological heart of the United States. I have to tell you, there’s nobody in Silicon Valley that doesn’t think there’s money to be made and economic growth opportunities in renewable energy, in energy efficiency programs, in smart grid technologies, in battery technology.

In fact, companies in Silicon Valley look to the East Coast where the policy makers are and think we are far behind the times talking about big pipeline infrastructure. I mean they are busy working at the technologies that are really going to drive growth.

In the solar industry in the United States last year, we added jobs ten times more quickly than in any other industry, or that the industries as a whole. (??) I think the International Energy Agency estimates that between now and 2050 $25 trillion dollars worth of investment will be put into power markets globally. That is a huge opportunity and I think that integrating renewables, using new grid technologies, looking at battery technology…

These are industries that will drive growth and good, competitive jobs.

I am heartened by the fact that our state department recognizes the importance of energy policy enough to devote an entire bureau, with 100 staff members, to focus on the topic. On the other hand, I’m discouraged by the experience of listening to a well-spoken, seemingly well-connected leader of that bureau give a carefully prepared, ten minute talk about energy, energy security, diversity of sources, and impacts of clean energy developments without once mentioning nuclear energy.

It’s not as if she had felt obliged to diplomatically avoid a sensitive subject for her hosts. Vazil Hudak, the Minister of Economy of the Slovak Republic, the hosting country, had just emphasized nuclear energy’s importance to his country’s energy system.

This situation does not bode well for the prospects of taking a strong, effective position establishing nuclear as a solid, ultra low emission energy source during the COP21 meeting in Paris next month. Ms. Dunnigan’s contribution to the discussion leads me to believe that there is a significant amount of political work to be done in a short period of time.

No U.S. policy maker focusing on energy resources should feel free to ignore the importance of nuclear energy for our future safety, security, environmental cleanliness and prosperity.

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