US Ambassador: Russian gas no laughing matter

Russia’s recent incursion into Georgia has brought into renewed focus the need for Sweden to continue the development and promotion of alternative energy sources, writes US Ambassador to Sweden, Michael M Wood.

• American envoy plants green shoots (26 Oct 06)

I have made alternative energy the focus on my tenure as US Ambassador to Sweden. For the past two years I have travelled to all 21 län [counties] visiting Swedish alternative energy companies. I compiled information about these companies into a list, sometimes simply called the Ambassador’s List, which I have shared with American investors.

At the end of September, I will unveil the latest version of the list, with more than 50 companies on it, at a meeting in New York City. My hope is that these great Swedish ideas can grow and spread through partnership with American investors, researchers and alternative energy companies.

I have emphasized alternative energy cooperation for two reasons. Like most Swedes and most Americans, I am concerned about global warming. We all recognize the danger posed by climate change and want to do something about it. Alternative energy is key to any realistic solution to the climate challenge.

Russia’s invasion of Georgia brought into stark relief the other major reason why we need alternative energy: energy security.

About 58 percent of the petroleum that we use in the U.S. is imported from foreign countries. We are dependent on other nations for more than half of our oil needs. Dependence on foreign sources is not a great problem if the sources are diversified. The U.S. gets its oil from North America (Canada, Mexico), the Middle East (Saudi Arabia), Africa (Nigeria) and South America (Venezuela). Europe, however, is at risk because it relies too much on one unreliable energy supplier: Russia.

Five European Union members are wholly dependent on Russia for their natural gas, and four more receive more than 50 percent of their natural gas from Russia. One third of all EU oil imports come from Russia. And we know that Russia will not hesitate to use energy as a weapon. On New Year’s Day 2006, Russia cut off natural gas supplies to and through Ukraine because of a contract dispute.

About 80 percent of the natural gas Europe imports from Russia passes across Ukraine, so the effects were felt not just in Ukraine, but as far away as Italy. In May 2007, Russia cut off delivery of oil products and coal to Estonia because the Estonian government decided to move a monument to the Red Army to a less prominent location.

Sweden is less vulnerable to energy threats than many European countries. Hydropower and nuclear energy provide for almost all of Sweden’s electricity needs. Oil is imported for transportation, but as ethanol vehicles and electric hybrids become more common, oil imports should become relatively less important. Overall, 36 percent of Sweden’s energy needs are met from foreign sources, compared to about 50 percent for the EU 27 as a whole.

Starting from this position of relative energy independence, Sweden can be a leader in efforts to reduce dependence on Russian energy supplies. Europe needs to unite and speak with one voice on energy, not allowing Russia to sow differences between European states as it has often done in the energy arena.

In the EU Summit Declaration on Georgia on September 1 there was a brief statement that indicates that European leaders understand their difficult situation: "Recent events illustrate the need for Europe to intensify its efforts with regard to the security of energy supplies.”

There are two primary ways to do this:

First, keep developing alternative fuels. Ethanol instead of gasoline, biogas instead of natural gas, solar and wind power instead of coal; all of these steps will reduce dependence on imported oil and natural gas while also cutting carbon emissions. Sweden leads the world in alternative energy technology. I will continue my efforts to create lasting linkages between energy innovators in the U.S. and Sweden.

Second, develop alternative fuel routes. Europe needs to work with the energy producing and transit countries in Central Asia, Azerbaijan, Georgia and Turkey to develop an energy infrastructure outside the Kremlin’s control. Russia’s invasion of Georgia shattered one of Europe’s fastest-growing economies. It was also a significant setback to the Nabucco pipeline project. The European Parliament and the Council of Europe initiated Nabucco in 2003.

This pipeline and another new project, the Turkey-Greece-Italy pipeline, will when completed bring natural gas from the Caspian Sea through Georgia to Turkey and then into the heart of Europe. It represents a non-Russian supply of natural gas passing from the exporting countries directly to Europe without crossing Russian territory. Needless to say, this would reduce Russia’s ability to cut off natural gas to Europe as it did in 2006 and 2007.

On the other hand, one energy pipeline that should be reexamined is the South Stream project, which may not be in Europe’s overall interests. South Stream, a natural gas pipeline that will be firmly in Russian control, will not do much to provide new energy supplies to Europe. The principal goal is simply to cut Ukraine out of a portion of the natural gas distribution system. This is a time for Europe to bolster Ukraine, not undermine it.

Closer to home, Sweden should also take a hard look at Nord Stream, the proposed natural gas pipeline in the Baltic Sea to bring more Russian natural gas to Germany. Nord Stream bypasses the Baltic States and Poland, potential consumers, and represents a special arrangement between Germany and Russia. The EU should be speaking with a single voice to counteract the power of Russia’s energy weapon.

The economies of the United States and Europe are going to depend on imported oil and natural gas for many years to come. We need to recognize the threat posed by this dependence and take steps to counter it. On September 11 and 12, top energy experts from the United States, Sweden and the rest of Europe will meet in Stockholm for an extraordinary Transatlantic Energy Security Dialogue.

This gathering underscores the heightened concern about European energy supplies following Russia’s aggression against Georgia. We must create alternative forms of energy, and we must establish new ways to get the imports that we can’t, for the moment, do without.

US Ambassador Michael M Wood’s article was originally published in Swedish by Svenska Dagbladet .