U.S. energy secretary visits Baltics

  • 2000-02-10
  • By Brooke Donald and Rokas M. Tracevskis
TALLINN/VILNIUS – The United States will give Estonia up to $1 million over the next three years to research more efficient and environmentally-friendly uses of oil shale, a resource the Baltic state has thus far not fully utilized because of its expensive extraction.

U.S. Energy Secretary Bill Richardson and Estonian Economy Minister Mihkel Parnoja signed on Feb. 4 the oil sale research agreement at the Estonian Academy of Sciences in the city's medieval center.

The cooperative agreement should help Estonian and American scientists find solutions to the environmental impact of burning oil shale and generate ideas for cleaning up existing damage from past oil shale use.

"We expect our cooperation will lead to higher value products from processing this resource, and to some important environmental benefits as well," Richardson said at a news conference following the signing ceremony.

In the first year of the deal, Estonia will gain $300,000 in funding. If the parties are satisfied with the work done during that year, more money will be allocated for the scientific exchange. The program is slated to begin with the U.S. fiscal year in October.

Relieved to talk about scientific research rather than world oil prices during the Tallinn stopover of his tour of OPEC and other oil producing countries, Richardson encouraged further American investment in the region and applauded the privatization deal between Estonia and U.S.-based NRG Energy. The NRG deal is expected to conclude in April when the American concern acquires a 49 percent stake in Narva Electrijaamad, the oil shale fired power plant in northeastern Estonia.

"We hope to see a successful conclusion to the NRG deal," he said.

In an article in the Latvian newspaper, Diena, Richardson praised privatization of utilities as cost-effective and environmentally beneficial sell-offs by the state because the sales generate high returns whose funds can be used for improving schools and providing health care, for example.

"The most important result of privatization is the ability to attract capital from private investors for modernization and expansion," Richardson said.

As part of the deal between NRG and the Estonian utility, the American company will renovate the Soviet-era power plants to lessen their environmental impact. The company has said it will also set up a 75 million kroon ($4.6 million) social fund for workers displaced after the plant is handed over from the state.

Besides the NRG deal, Estonia has been in negotiations with Canada's oil company, Suncor, that is also considering opening an oil shale mining operation here.

A day earlier, in Lithuania, Richardson said he supported the Williams International deal, the agreement made last year when the U.S. company purchased one third of the Mazeikiu Nafta shares and operational control of the company. Mazeikiu Nafta is a Lithuanian oil refinery, pipeline and import/export sea terminal.

"The U.S. administration supports the Williams company. We support this government's efforts to cooperate with Williams in the energy projects," Richardson said.

He also urged the Baltic countries to cooperate among themselves. Cooperation, Richardson said, would make the "Baltic position stronger in dealing with your northern neighbors and other European countries as well as with Russia."

Also in Vilnius, the energy secretary signed three bilateral agreements with representatives of Estonia, Latvia and Lithuania committing the Baltic countries and the United States to take measures aimed at reducing environmental pollution. The joint clean energy statement "underscores our mutual commitment to the environment in general, and more specifically to clean energy and reduced greenhouse gas emissions," Richardson said in Tallinn.

The U.S energy secretary was in the Lithuanian capital for two days and was the keynote speaker at the U.S.-Baltic Power Sector Investments Seminar. Richardson said that "Baltic economies will flourish in the 21st century" and promised his country's cooperation with the Baltic energy sector.

Lithuanian Prime Minister Andrius Kublius asked the United States to help finance the closure of Ignalina, the nuclear power plant slated to have its first reactor shut down by 2005.

"This financial burden of closure is too heavy for Lithuania alone and it is a global interest," Kublius said.

Richardson rounded out his Baltic visit – a first for a U.S. secretary of energy – with a stop in Riga.