Energy sector tops Baltic discussions

  • 2010-05-12
  • From wire reports

RIGA - Latvian Prime Minister Valdis Dombrovskis (New Era) met with the Special Envoy of the United States Secretary of State for Eurasian Energy Richard Morningstar on May 7 to discuss bilateral cooperation in energy, reports news agency LETA. The prime minister talked of the progress in the creation of a common Baltic energy market, which will connect all three Baltic states, as well as connection and integration with the Scandinavian energy market.

At the same time, both officials discussed the influence the United States’ shale gas project will have on the European gas market, as well as the necessity of competition in the gas markets in the Baltics and Eastern Europe. Dombrovskis emphasized that Latvia is interested in long-term U.S. energy investments in Latvia, so as to diversify energy supplies in the Baltic region. During the meeting, the two officials positively assessed the United States’ current investments in the energy sector by supplying Latvia with the necessary technology to construct a modern cogeneration power plant in Riga.
While Dombrovskis was meeting with Morningstar, Lithuanian Prime Minister Andrius Kubilius was in Washington having discussions with American Deputy Secretary of Energy Daniel B. Poneman reviewing Lithuania’s plans for developing the country’s energy independence. According to Kubilius, the American energy expertise and cutting edge technology was what Lithuania needed most to strengthen energy security in the region.

Lithuania’s prime minister was interested in new technologies that would be useful in the construction of a new nuclear power plant and liquefied gas terminal. The American deputy secretary of energy said that America will “do what it can.” Poneman said that nuclear energy was the most promising in reducing greenhouse gas emissions; therefore, President Barack Obama considers nuclear energy to be a priority. At the same time, in the modern world of international terrorism it is essential to ensure non-proliferation of nuclear weapons, therefore, the Lithuanian nuclear power plant can become an example of how to produce safe and green energy.

According to Poneman, it will not be global agreements, but good examples that would overcome global warming and Lithuania could be one of those examples. “We need to create an environmentally friendly energy system step by step, and a Lithuanian nuclear power plant could be one of those steps,” said Poneman.
Meanwhile, Russia is seeking to operate Ukraine’s gas system, and buy up energy and transportation assets in the Baltic republics, according to a Russian Newsweek story, citing a draft document prepared by the Russian Foreign Ministry, reports Bloomberg. The document can be considered as a new foreign policy doctrine, one in which the country “will not have friends and enemies, but only interests.” It is “intended for official use” and differs from the earlier programs, according to one senior diplomat. Specifically, the program provides for “economic conquest of the Baltic States.”

The document, drafted in February, outlines the ministry’s proposed agenda for relations with 61 countries. President Dmitry Medvedev has given his preliminary approval to the document, which is being reviewed by First Deputy Prime Minister Igor Shuvalov, said Newsweek.

Operating Ukraine’s gas transport system and creating an international gas consortium is a strategic task, the magazine said. Russia is also seeking long-term contracts to deliver nuclear fuel to Ukraine’s power stations.
Russia expects to expand its economic presence in the Baltic countries, with investments in energy, logistics, information technology and transport companies active in the region. The Baltic States are losing investment interest from European Union members, and asset prices are falling in the wake of the global economic crisis, so Russia should consider buying companies in the region, the draft says, according to Newsweek.

The Kaliningrad exclave is also mentioned as being included into the transport infrastructure, “to ensure a continuous flow of vital supplies to the district,” adds the report.
Russia wants to boost projects in energy, transport and technology with Germany, France and Italy. Russia would also like to get access to U.S. nuclear technologies, attract investment and persuade the U.S. to lift sanctions against Russian companies for its cooperating with Iran and Syria.

Russia plans to develop its energy cooperation with Iran and promote sales of Russian commercial aircraft to Syria. It also wants to sell weapons to the United Arab Emirates and Saudi Arabia, according to the draft.
The foreign policy agenda favoring better relations with the West stems from the shortage of financial means - money - to modernize Russia’s economy, according to the document, Newsweek said. Russia will need about 780 billion euros up to 2013 to make good on its plans for infrastructure and social development, the magazine said, citing Economy Ministry calculations.

Russia, according to the document, is interested in “strengthening of mutual dependence-based relationships with the world’s leading powers, which would focus on the economy and culture through cooperation.” The EU, and the U.S. in particular, are Moscow’s most desirable partners.
One Russian diplomat said that the tone of dialogue between Russia and the U.S. had changed, and even that U.S. representatives involved in recent negotiations never invoked the Georgia issue.

This unexpected turn in Russia’s foreign policy is being pushed by the reality that the economy and transport infrastructure need modernization, and that there is a serious lack of money available domestically.
The Russian leadership’s triumphant optimism that it showed last year, boosted by record-high oil prices, is now a thing of the past. The post-crisis world sees Moscow looking for friends and trying to create favorable economic relations, linking all the expectations of foreign investors who are willing to invest in Russia, and for cooperation with Russian business in developing joint projects around the world, concludes the magazine.