This meeting focused on Europe’s increasingly troubled energy relationship with Russia, with particular emphasis on Northern Europe. Against the backdrop of the Ukrainian gas crisis and renewed pledges on the Nord Stream gas pipeline project, participants assessed Russia's influence in European energy markets and the critical interplay between Russia's economic downturn and energy export policies, as well as the attendant implications for the transatlantic relationship. Participants included Pekka Sutela, Head of the Bank of Finland's Institute for Economies in Transition; Anders Åslund, Senior Fellow, Peterson Institute for International Economics; Jaroslav Kurfürst, Deputy Chief of Mission, Embassy of the Czech Republic; Dr. Phyllis Yoshida, Deputy Assistant Secretary for International Energy Cooperation, U.S. Department of Energy; Tomas Gulbinas, Deputy Chief of Mission, Embassy of the Republic of Lithuania and J. Robinson West, Chairman, Founder and CEO, PFC Energy. Ambassador C. Boyden Gray, former U.S. Special Envoy for European Union Affairs and Special Envoy for Eurasian Energy presented keynote luncheon remarks.

C. Boyden GrayRussia is at the heart of the difficulties of energy security in Europe. One of the problems, of course, is that Russia just isn’t investing enough in their own gas development. (It’s even more acute on oil: within five years, they won’t have enough to play games with, whether they want to or not.) It’s a key problem: they need to attract outside capital. Gazprom desperately needs it because it has huge debts and a very low stock price. So there is trouble ahead if we don’t collectively figure out a way to get that attended to, whatever their internal or external intentions are. Now on natural gas, Europe reportedly faces a shortfall of somewhere between 120-150 billion cubic meters annually by 2030. How can it be covered? This issue has a climate change component because if Europe doesn’t get the gas (from Russia or elsewhere), they are going to use other fuel for their power plants, including the coal-fired power plants they’re building now. How are they going to deal with the carbon emissions that result? As I read it in the papers, the EU plans to make it up by allowing member states to use “offsets” that will come – up to 50 percent of them – from outside the EU. In a sense, Europe would only do 50 percent of these nations’ purported clean-up and instead get cheaper offsets from operations in China or India or elsewhere.

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Matthew BryzaConfronted with new and ongoing challenges to energy supplies – our own and those of our friends in Europe – this administration has decided to reorganize some policies and renew a long-standing U.S.-led effort aimed at expanding oil and gas production in the Caspian, using public-private partnerships as the preferred Western approach.

 

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