[Mb-civic] Meeting energy supply risks - Marc Grossman - Boston Globe Op-Ed

[William Swiggard]

  Meeting energy supply risks

By Marc Grossman  |  January 5, 2006  |  The Boston Globe

AMERICANS NEED to recognize the importance to the United States of what 
Gazprom, Russia's state-owned gas monopoly, did to Ukraine and, by 
extension, to Europe, by squeezing gas supplies to Ukraine. Last week, 
Gazprom raised the price of the natural gas it supplied to Ukraine 
nearly fivefold. When the Ukrainians refused to pay, Gazprom cut off the 
gas, affecting not just Ukraine -- which lost 100 percent of Russian 
imports -- but also Austria, Hungary, Poland, Slovakia, Romania, 
Germany, France, and Italy. All the countries reported drops in gas 
supplies that run through pipelines crossing Ukraine. A compromise deal 
was reached yesterday. Gas is flowing again, but the threat is clear.

The Russians claim that Ukraine was ''stealing" Europe's gas and that 
Ukraine should no longer benefit from old price arrangements. Ukrainians 
are sure they are being punished for the Orange Revolution and their 
dreams of joining the European Union and NATO.

Why should the United States care about this? First, because it says 
something about President Vladimir Putin's Russia. Putin took over the 
leadership of the G-8 bloc of industrial countries on Jan. 1. 
Ironically, he has chosen the security of energy supplies as a focus for 
Russia's G-8 presidency.

Second, the United States should care because America is highly 
dependent on others for energy supplies. Yet Americans continue to avoid 
meeting the challenge of energy security. US oil dependence distorts US 
foreign policy, making it harder to pursue the war on terrorism and 
promote democracy in the Middle East. Through our oil purchases, 
Europeans and Americans have helped Iran build up hard currency reserves 
reported to be over $29 billion, some of which fund the nuclear program 
in Iran we are committed to stop. By buying billions of dollars worth of 
oil products from Venezuela, we also pay for President Hugo Chavez's 
support of Fidel Castro, opposition to the Free Trade Area of the 
Americas and his weapons purchases, some of which end up in the hands of 
Colombian narcoterrorists.

If the United States wants to avoid being held hostage, like Ukraine or 
Europe, by a major source of its energy, there are five things it must do.

First, the administration should revive one of its best, but now 
forgotten, ideas: the 2001 commitment to a North American Energy 
Initiative designed to increase reliable energy supplies, promote modern 
infrastructure and technology improvements, increase efficiency and 
conservation, and create a modern North American electricity grid.

Canada is America's leading supplier of imported natural gas, 
electricity, and oil. In a world of $60-per-barrel oil, Canada's oil 
sands provide a viable new source of energy that puts Canada in second 
place in the world's proven oil reserves. While Mexico has more work to 
do to free its energy sector, in 2004 Mexico was the second-largest 
exporter of oil to the United States. Both countries offer more secure 
energy supplies than the Middle East or Venezuela.

Second, the United States must dramatically increase the efficiency of 
its use of oil. The Rocky Mountain Institute estimates that changing the 
way America does business could save 50 percent of consumption. The oil 
giant Chevron ran advertisements at the end of 2005 saying that if 
automakers improved fuel economy across the board by just 5 miles per 
gallon, it would save more than 22 billion gallons of gas a year.

Third, the United States must substitute for oil. Hydrogen-powered cars, 
biofuels, and natural gas (which all three North American countries 
have) are places to start.

Fourth, the United States should continue to support multiple routes for 
moving energy out of the Caucasus, such as the pipeline that runs from 
Azerbaijan through Georgia into Turkey. While Russia has a right to 
compete in global energy markets, it is not in US interests for Moscow 
to have a monopoly on supply or distribution. Fifth, US energy security 
needs to be a priority. The United States will never be energy 
independent, so let's not waste time debating policies to meet that 
objective. But surely the lesson of Gazprom's action in Ukraine is that 
the United States needs to start working on all fronts, and especially 
in North America, to make sure that it is not a victim of someone else's 
agenda.

Marc Grossman, former undersecretary of state for political affairs, is 
vice chairman of The Cohen Group in Washington. 

http://www.boston.com/news/globe/editorial_opinion/oped/articles/2006/01/05/meeting_energy_supply_risks/
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