Letter to Barack Obama, President of the United States - Use Upcoming Summit to Counter Putin's Energy Influence in Ukraine, Europe

Letter

March 21, 2014
President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC

Dear President Obama,

We write to you today because we are deeply concerned with the events unfolding in Ukraine and Crimea that have been instigated and supported by Russia. President Vladimir Putin's aggressive actions and intransigence, and his continued dismissal of U.S. and European Union warnings, is of particular concern. We share your view that tough sanctions from both sides of the Atlantic will be required to provide the necessary motivation to change Putin's behavior, and to enable a diplomatic resolution of this crisis.

The sanctions that have been implemented so far are good and appropriate; however, we believe that energy security is a critical component to achieving a successful outcome in the region. Russia provides one-third of Europe's natural gas needs. With Russia in a position to slow or stop gas flowing into much of Europe, Putin retains leverage to continue to dominate European energy markets. Though Russia has publically committed to maintaining a full supply of gas to Ukraine and Europe, their recent history contradicts these proclamations. In January 2009, Moscow cut its supply of gas flowing through Ukraine, and at least 18 European countries saw their supplies completely or partially reduced. Some governments declared states of emergency and ordered factories and schools to close, while millions of people struggled to cope in freezing temperatures.

As long as Vladimir Putin continues to use energy as a weapon, we must take this threat seriously and take this Russian threat off the table. For the first time in a generation, America is in a position to export energy, and acting strategically to increase our natural gas exports accompanied by a more comprehensive U.S.-EU energy security dialogue will weaken Putin's grip on European energy markets.

We urge you to take five specific actions that will have near and long term positive impacts on the energy security of Ukraine and the EU.

First, direct the Department of Energy to accelerate the natural gas export permit process by approving the pending permits within 60 days, or providing specific reasons why it cannot approve individual permit applications. Though exports would not start immediately, and though the price points in Asian markets are currently more attractive to natural gas exporters, calling for expedited approval of Liquefied Natural Gas exports will increase liquidity on the global markets and will improve the European energy security.

Second, conduct a strategic review of U.S. energy policies, and expand the group of nations that currently qualify for U.S. energy exports to beyond those with free trade agreements to include our NATO allies, the EU, Ukraine, and any others that are in the national security interest of the United States. The review could include examining the potential of additional investments in facilities capable of liquefying natural gas.

Third, launch a joint U.S.-EU initiative on energy security at next week's U.S.-EU summit in Brussels, with specific near-term and future deliverables. One area of critical importance to ensure greater energy security in Europe is the natural gas infrastructure. While some European countries such as Lithuania or Austria receive 100 percent of their gas from Russia, others receive far less, and by improving and the interconnections, these countries could far more easily direct supplies to one another in case of an outage. One specific fix would be to reverse the flow of gas from Slovakia to Ukraine, a proposal that is under consideration by the European Commission. Additionally, we should assist Ukraine to establish and maintain a high level of security around its strategically significant gas storage facilities in Southern Ukraine.

Fourth, help Ukraine implement a significant energy productivity initiative. U.S businesses have developed many off-the-shelf technologies that can greatly reduce energy waste and promote greater efficiency, which will reduce Ukraine's energy needs. This has the potential to greatly reduce the amount of energy required by Ukraine and lessen their dependence on Russia.

Finally, help Ukraine implement energy development technology to enhance domestic production and promote energy security. We have been contacted by several U.S. companies that are ready to make strategic investments to help Ukraine increase production of their own energy resources to reduce reliance on Russian energy supplies. We urge you to support and encourage the U.S. State Department's Unconventional Gas Technical Engagement program that allows U.S. local and state-level officials to share best practices with European government officials. Already, U.S. oil and gas companies are leading EU countries in shale gas exploration and off-shore exploration in Eastern Europe to help these states diversity their energy sources.

We urge you to use the meetings to encourage more European cooperation to solve their own energy dependency problem. A recent proposal from the United Kingdom provides a series of recommended reforms to the European energy infrastructure. We believe our proposal aligns with the British recommendations and will provide a helpful starting point for the discussions next week. The U.S. has a long history of supporting the transatlantic relationship on areas of security and defense, and energy security should be part of that dialogue.

We look forward to working with you to implement this plan.

Sincerely,

John Hoeven

Mark Warner

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