Date: 17 November 2020
Event Summary: Challenges For Energy Security. Transatlantic Approach.
On 17 November 2020, the Warsaw Institute think tank and the Warsaw Institute Review hosted an online interview with H.E. Ambassador Virginia Palmer from Bureau of Energy Resources within U.S. Department of State. The discussion focused on the geopolitics of energy security in the Central and Eastern Europe and the prospects for U.S. involvement in Europe’s energy transformation and diversification of supplies. The main themes were American LNG, nuclear energy, and security of critical infrastructure. The meeting was hosted by Warsaw Institute’s Executive Director, Tomasz Kijewski.
- An energy secure Europe serves as a strong partner for the United States in facing global challenges and Poland will continue to be a key partner in this endeavour.
- There is a strong bi-partisan support in U.S. for European energy projects which strengthen security.
- U.S. Department of State strives to work with European Allies to establish a transparent energy market.
- U.S. is strongly supporting the projects towards energy supply diversification in Europe, such as the Baltic Pipe (Polish-Denmark pipeline).
- U.S. aims to intensify civil nuclear technology cooperation with Poland and other European partners such as Romania, Bulgaria, Slovenia, and Ukraine, with others to follow.
- American government and companies are devoted to support Europe in transition to clean energy technologies.
- Current dependence on energy supplies from Russia in Europe could be used as a political leverage.
- Poland and the United States strongly oppose Nord Stream 2 – a Kremlin’s geopolitical project undermining European energy security.
- Stable LNG supplies from the U.S. could increase competition on the European energy market.
- Three Seas Initiative remains a “top priority” of the U.S. State Department
TRANSATLANTIC ENERGY SECURITY AND DIVERSIFICATION
Madam Ambassador highlighted that energy cooperation between Europe and the United States helps to advance their common economic and security goals and interests. She urged to remember that “energy security is national security,” especially in terms of supply stability and growing impact of cyberthreats on critical infrastructure. It is therefore crucial to diversify suppliers, routes, types of fuels. Green transformations such as nuclear and renewables are advised, and transatlantic cooperation is of great value to all parties involved.
The American government strongly supports creation of opportunities and assistance programs that strengthen implementation of energy market rules, promote transparency and third-party access. European energy security requires a broad-based U.S. and European focus to diversify energy sources, liberalize markets, and enable smooth transitions to clean energy. She concludes that “an integrated European energy market is a more secure energy market.”
H.E. Ambassador underlines that the United States seeks to continue their work with European Allies and partners to ensure transparent and open energy markets that level the playing field for U.S. products and services. They also want to build common resilience to economic pressure and coercion by great power rivals like Russia.
U.S.–POLAND ENERGY COOPERATION
H.E. Ambassador named Poland a “key ally” and a “leader” in strengthening national energy security and praised Polish contribution to the future of energy security in Central Europe, bringing the Baltic Pipe and the LNG terminal in Świnoujście as examples thereof. She stressed Poland’s role in the Baltic state’s desynchronization from the “Moscow-controlled” electricity grids towards European ones – crucial for reducing Russian influence in EU. Furthermore, she expressed America’s support for the Poland-Lithuania natural gas interconnector (GIPL) which is currently being constructed. Here, H.E. Palmer thanked Poland for its definitive opposition to Nord Stream 2, a project she accused of undermining European energy security.
Madam Ambassador stressed that the U.S. government strongly supports all initiatives strengthening European energy security. Therefore, American authorities consider that the Three Seas Initiative a “top priority”. She also reminded Secretary Pompeo’s decision to support the Initiative with 1bln USD for infrastructure development projects (through U.S. International Development Finance Cooperation). She adds that the Three Seas Initiative projects are of significant importance especially in the context of stimulating the post-pandemic economic recovery and job creation.
RUSSIA’S ROLE IN EUROPEAN ENERGY
According to Madam Ambassador, Europe is currently over-reliant on Russia when it comes to energy supply, granting Kremlin an unnecessary strategic, political, and economic leverage over European governments. She added that Nord Stream 2 and Turk Stream pipeline projects are explicit attempts to destabilize Ukraine through diminishing its role in the transit of Russian gas, and that Poland was an “early recogniser” of that fact. Simultaneously, these pipes divide Europe giving Russia the ability to supply natural gas to Europe’s west sooner than to its centre and east. Hence, Kremlin will get a chance to pressure Eastern Europeans – said H.E. Palmer. She also called it Russia’s “long game” of strengthening political networks abroad to pursue “malign policy” against both Europe and the U.S.
Madam Palmer stressed Russia’s use of disinformation campaign aiming to portray American natural gas as inferior to that from Russia. She called such claims “simply and categorically false,” supporting her view by appropriate data – methane emissions intensity from U.S. is proven to be significantly lower than from Russia, according to the International Energy Agency. Moreover, methane emissions from U.S. producers do not exceed those from Gazprom. Based on the data, Ambassador urged EU allies to be “mindful” of Russian disinformation.
Regarding the controversial energy projects in Europe, Ms. Palmer highlighted that the U.S. does not want to sanction anyone but rather to level the playing field across energy suppliers in Europe. She stressed that American opposition to Nord Stream 2 is not an anti-Russian policy; it is a fight for fairness and competition on European energy market. Moreover, the Nord Stream 2 and Turk Stream pipeline projects undermine the security of Europe, which will certainly remain a priority regardless of the party governing in the U.S.
Therefore, in America, there is a bi-partisan agreement condemning the projects that threaten European energy security. This is why in October 2020 the Department of State issued new public guidance pertaining to the Protecting Europe’s Energy Security Act (PEESA). This public guidance clarifies how the State Department interprets the term knowingly, “provide[d] those vessels for the construction of such a project” in PEESA. This may cover foreign firms or persons who provide certain services or goods that are necessary or essential to the provision or operation of a vessel engaged in the process of pipelaying deep underwater for projects like Nord Stream 2 and Turk Stream. The guidance issuance for PEESA follows the July 15, 2020 update to public guidance for section 232 of the Countering America’s Adversaries Through Sanctions Act (CAATSA) bringing both Nord Stream 2 and the second line of Turk Stream within the scope of the act. These actions make clear that U.S. resolve on this matter is unwavering.
GLOBAL ENERGY DYNAMICS
One challenge that has affected the entire Transatlantic community and the world is of course COVID’s unprecedented energy demand shock, which also accelerated several existing energy sector trends. The cooperation between Europe and the U.S. will determine the global energy market which will set the stage for international energy security. Besides challenges posed by the pandemic, the world is facing the consequences of climate change. Therefore, the United States and Europe are now working more closely than ever on the supply chain issues of energy resources, crucial to develop cleaner energy technologies. We are facing shared challenges, together – concluded Ambassador Palmer.
Addressing the growing threat of hybrid attacks, Her Excellency declared the readiness of U.S. companies and authorities in supporting the security of Europe’s critical infrastructure with their expertise. Ms. Palmer stressed the increasingly relevant issue of cyber and asymmetric threats. Increased energy system digitalisation, with proper defence systems in place, can make countries’ vulnerable to cyber threats and thus a field of financial and political game. She also described the U.S. State Department’s project aimed at energy digitalisation development. Interestingly, three cities will soon be selected to run a pilot trial and American authorities will provide them with tools to implement smart city solutions with a focus on ensuring cyber- and energy-security. Nevertheless, she added that, in this scope, “the U.S. has a lot to learn from their European Allies,” too.
CLEAN ENERGY SOURCES
Moreover, Madam Palmer assured that the U.S. is “enthusiastic” about sharing its expertise within the field of civil nuclear energy and said that America would like to “regain its lead” globally. The aim for United States is to provide top quality nuclear technology that is not poisoned with malign threats from other global suppliers such as Russia or China.
Moreover, Madam Ambassador highlighted U.S. interest in advancing fuel supply and nuclear energy projects not only in Poland, but also in Romania, Bulgaria, Slovenia, and Ukraine. She added that, in the future, U.S. plans to expand such programmes to other countries in the region, too.
The U.S. also recognises the passion of its European Allies towards green energy and clean technology and would like to engage with EU countries on this transformation. H.E. Ambassador stressed that increased trade of American liquified natural gas could not only boost competition on the market thus lowering the prices, but also reduce Europe’s dependence on Russian gas.
Warsaw Institute’s followers inquired Madam Palmer on how American energy exports fit within the broader diplomatic strategy towards Europe. Besides increasing the earlier discussed security of the region, she highlighted that “optionality reduces prices” and Lithuania has already benefited financially from being able to negotiate a lower price of gas from the U.S. than it would receive from Russia. Her Excellency added that many European countries rely on Russian energy supplies by over 70%, while American natural gas saved Europe 8 billion euros in 2019 alone. Therefore, there is huge potential for increasing transatlantic cooperation.
Another question from the audience concerned the impact that the pandemic had on the work of the State Department and its initiatives within the field of energy policy. Ms. Ambassador said that European governments are seizing the opportunity to use recovery packages to invest in green technology, and consequently the U.S. has been acknowledging the increasing demand for energy minerals – necessary for the development of batteries, wind turbines, or photovoltaic panels. Indeed, this demand has now exceeded that for natural gas from the U.S. Madam Palmer expressed the State Department’s devotion to providing assistance, knowledge, and the tools necessary for minerals exploitation, and the priority aim to monitor the supply chain and provide satisfactory demand for these goods.
H.E. Ambassador Virginia E. PALMER – Principal Deputy Assistant Secretary at the Bureau of Energy Resources within U.S. Department of State; Minister Counsellor of the Senior Foreign Service; former U.S. Ambassador to the Republic of Malawi, South Africa, and Vietnam; served diplomatic assignments in Canada, Zimbabwe, China, Kenya, and Hong Kong, working on political and military affairs, trade, and development.
Tomasz KIJEWSKI – Executive Director at Warsaw Institute; scholar at the Centre for Transatlantic Studies in Maastricht, Netherlands; graduate of the national security program at the George C. Marshall European Centre for Security Studies (Washington DC / Garmisch-Partenkirchen); formerly served as a diplomat at the Polish Embassy in Canada; his areas of expertise include energy security, hybrid warfare, asymmetric conflicts, and counter-terrorism.
Warsaw Institute is a geopolitical think tank in Poland. The main areas of our interest are international relations, energy security, defence, disinformation, and any other issues crucial for Poland and East-Central Europe. We are proudly supporting the Three Seas Initiative and transatlantic relations. Warsaw Institute develops and provides innovative and practical recommendations based on the wide experience of its experts (over 40 cooperating experts). Warsaw Institute helps to improve public policy and decision-making through research and analysis. Our activities are dedicated to government organizations and agencies as well as non-governmental organizations, think tanks, research institutes, academic communities, opinion-forming media, and experts. Warsaw Institute is an independent, non-profit, nonpartisan organization supported by contributions from individuals.
The Warsaw Institute Review is a free, independent Polish quarterly magazine. We cover a broad spectrum of topics concerning Poland, a leader among East-Central European countries, in the form of analytical articles on political, legal, economic, social, historical, and institutional issues. The authors of the articles in The Warsaw Institute Review are, on the one hand, analysts and experts, and on the other hand, people who have an active and practical influence on Poland’s political, economic and cultural life.
All texts published by the Warsaw Institute Foundation may be disseminated on the condition that their origin is credited. Images may not be used without permission.