Remarks As Prepared for Deputy Secretary of Energy Clay Sell
Thank you Rose for that kind introduction. And a special thank you to the Carnegie Moscow Center for putting together this morning's event.
Non-governmental organizations like the Moscow Center do unique work that plays a very important role in civil society. The Carnegie Institute has been instrumental in bringing together the thought and opinion leaders of Russia in support of democracy and freedom.
You and others took a leading role in the transformation of political discourse here over the past 15 years. And it will be you who help keep the political and opinion leaders accountable by convening experts, fostering debate, and performing crucial research that addresses some of our world's most important public policy challenges. I commend you for it and I thank you for having me.
One individual who personified the important role that reformers can make, even against staggering odds, was the former Russian Admiral Nikolai Yurasov. I recall meeting the Admiral about 5 or 6 years ago back in the U.S. He was a great and early advocate for nuclear nonproliferation and he helped to strengthen the U.S. - Russian partnership in this area.
His work began opening the door to a number of opportunities for the D.O.E.. I think fondly of him and express my condolences to his family.
The strategic rivalry between the U.S. and the Soviet Union was the most important foreign policy dynamic in the 2nd half of the 20th century, without question. It defined our relationship and separated the world into groups…aligned with…aligned against…or not aligned at all.
But that time is over. In the 21st century, our relationship must not be defined by a rekindling of our strategic rivalry of old, but instead by a new strategic partnership. A partnership defined by our joint leadership on the world's greatest challenges. And right now, there is no greater challenge than energy.
Perhaps some would say that is an overstatement. I don't think so. And I would like to tell you why.
Energy necessarily underpins almost every other major challenge we face.
The development and success of countrywide economies - a matter critically important to addressing the poverty and despair that breeds terrorism - will depend, in large part, on whether or not nations have secure and affordable supplies of energy.
And ensuring that this continued development is achieved in a clean and environmentally sensitive way, and in a way that allows us to effectively address the challenge of global climate change, will depend on the decision we make about how to source and consume our energy.
And each nation's sense of countrywide security will depend in large part on having stable and diverse supplies of energy. Energy security cannot be separated from countrywide security.
And when one looks at the great potential that nuclear power can play in addressing these issues, we can add in a further issue: energy security cannot be separated from our nonproliferation and counterterrorism policies related to fissile material.
These issues matter. How Russia leads on these issues matter. And perhaps there is no area in which Russia and the U.S. together can have a greater impact than on energy.
In some of these areas, like nonproliferation policy, the U.S. and Russia have a rich track record of cooperation on which to build…I would like to talk about that today.
On broader matters of energy policy, our partnership is still emerging. Frankly we, in the United States, see areas of great concern about what is happening here, but we also see areas of great opportunity. I will talk about that as well.
But first, let me speak to our collaboration and cooperation on nonproliferation and on reducing the threat of loose nuclear material. Some of our greatest achievements of the last 15 years have been in this area.
U.S. - Russian cooperation is making an important difference, and is helping to keep our respective nations, and nations around the world, safe.
3 years ago, Russia joined the U.S. and others in support of UN Security Council Resolution 1540, which mandated that states work to prevent terrorist organizations from building or otherwise acquiring nuclear, chemical, or biological weapons.
Following those efforts, Presidents Bush and Putin, last summer, announced the Global Initiative to Combat Nuclear Terrorism. This initiative unites in excess of a dozen like-minded nations who are taking pro-active steps to help reduce the threat of nuclear terrorism. The participating nations are developing and implementing projects that will enhance security of their nuclear and radioactive substances, keep financial resources away from terrorists, prepare to thwart terrorist attacks, and to respond to them if necessary.
Russian and U.S. leadership is making this progress possible. And this is just one example.
In addition, we have also been working together to secure nuclear materials here in Russia, and 2 years ago, we agreed to accelerate the timetable for that work to have it completed by 2008. This will not be an easy task, but it is vital to the world's security that we get it done and done soon.
Just this past January, the Countrywide Nuclear Security Administration, an arm of the D.O.E., announced that it had begun upgrading the ninth and final Russian nuclear warhead location that it was assigned under the Bratislava Agreement. This work will protect against the risk of theft or attack by terrorists, and include installing physical protection systems, such as intrusion detection sensors, access controls, and hardened defensive positions.
The NNSA has previously provided security upgrades at 61 military-affiliated sites in the Russian Federation, and has contracts in place to install security systems at 23 additional sites in the next 2 years.
However, while we are making substantial progress in securing nuclear materials, we need to make more progress in the disposal of excess plutonium within our borders.
7 years ago, the U.S. and Russia reached an arrangement that we would each dispose of 34 metric tons of excess weapons-grade plutonium. But to date, none of this plutonium has been disposed of.
In the U.S., we have a location that is ready to begin construction. However, much of the political capital that we are expending to implement this policy is due to the fact our legislators - our Congress in the U.S. - doubt Russia's commitment to the arrangement or cite the lack of a credible project that Moscow is committed to.
We, at the D.O.E., are trying to allay those concerns and hold up our end of the bargain. And, in accordance with our current budget, we are preparing to begin construction on our facilities in August. However, the Russian Federation must also move forward and join us in eliminating this dangerous and potentially deadly material.
In these areas we must accelerate our progress, because progress here - on matters of nonproliferation - will continue to strengthen the foundation for partnership on broader matters of energy policy.
This is the 2nd area in which I believe our strategic partnership can have a long and profound impact.
At the D.O.E., we have an independent bureau that makes energy forecasts, known as the Energy Information Administration. The EIA predicts that energy demand will increase by 70% over the next 25 years. More dramatically, they predict a doubling of world consumption of electricity during that same period. Much of the growth, of course, will come from the developing economies around the world.
With these stark facts as background, last summer the Group of 8 nations met in Saint Petersburg, under Russian leadership, and committed to a Project of Action on Global Energy Security. And each country agreed that the development of transparent, efficient and competitive global energy markets - markets with a certain investment climate and fair and predictable regulatory regimes - were the best way to achieve our common objectives.
The U.S. and Russia will naturally have different perspectives on exactly what this Project means. That is not surprising…the U.S. is the world's biggest net consumer of energy and Russia is the world's biggest net producer. So, we won't always agree.
But I think I understand why Russia agreed to these principles. Russia wants to advance its dominant role as an energy supplier to the world. Russia wants to mature its energy sector to take full potential from its incredible natural wealth. And further, I believe Russia wants to increase the share value of its energy companies, and desires the benefits that will accrue from collaboration with privately-owned international companies. I would cite, as a great example the collaboration that exists with ConocoPhillips and Lukoil.
New development in the oil and gas sector in Russia will require new technology, foreign capital, and the experience and best practices of the world's leading energy companies. And the greatest success in this area will require a transparent marketplace, a certain investment climate, and fair and predictable regulatory regimes.
However, this is still a work in progress.
The world has watched as the Russian government has taken greater and greater control over Russia's energy resources, while private entities have been marginalized. Foreign investors have stood on the sidelines, waiting for Russia to clarify the law on strategic industries and terms for developing its subsoil resources. We have viewed with alarm as foreign companies have been subject to the arbitrary application of uncertain regulations, and new demands for payment of unexpected tax liabilities. And of course these developments are threatening to potential new investment, but even more damaging to what I perceive to be Russia's long-term interests.
There was great hope that the technically challenging development of the Shtokman field would be an opportunity for foreign companies to broaden their investment partnerships in Russia - and for years we were led to believe this would be the case. But now it appears foreign companies will not be allowed to participate on an equity basis. But again, perhaps this is still a work in progress.
Recently, the U.S. has been vocal in our concerns on many of these issues, not because we want to limit Russia's global energy leadership, but because we want to encourage and expand it. What Russia does matters. It matters to the world. It matters to the U.S. And it matters to global energy security.
By maintaining an open marketplace with a fair and level playing field, Russia can ensure its continued energy leadership, and together, our 2 nations can serve as an example to others.
When it comes to the US-Russian relationship, every area of concern seems to carry with it the greater potential for opportunity. And in no area is there more opportunity than in the nuclear energy arena.
Our countries, and perhaps more importantly, our 2 Presidents, share the view that we can work together to provide safe, clean nuclear energy to growing economies all over the world in a manner that will also serve and advance the world's nonproliferation interests.
Recently, your President delivered a very tough speech in Munich on the state of world affairs from his perspective.
His blunt criticism of the U.S. received a strong and effective rebuttal from U.S. Defense Secretary Robert Gates the following day and I do not desire here to go into that matter further.
But in another part of his speech, that wasn't as widely covered, he outlined his great desire to work together with the U.S. towards this shared goal of safely expanding nuclear energy.
President Putin said, and I quote, "The present international legal principles allow us to develop technologies to manufacture nuclear fuel for peaceful purposes. And many countries with all good reasons want to create their own nuclear energy as a basis for their energy independence. But we also understand that these technologies can be quickly transformed into nuclear weapons. This creates serious international tension…"
From there, President Putin went on to say, "Last year Russia put forward the initiative to establish international centres for the enrichment of uranium. We are open to the possibility that such centres not only be created in Russia, but also in other countries where there is a legitimate basis for using civil nuclear energy. Countries that want to develop their nuclear energy could guarantee that they will gain fuel through direct participation in these centres. And the centres would, of course, operate under strict I.A.E.A. supervision. The latest initiatives put forward by American President George W. Bush are in conformity with the Russian proposals. I consider that Russia and the U.S.A. are objectively and equally interested in strengthening the regime of the non-proliferation of weapons of mass destruction and their deployment. It is precisely our countries, with leading nuclear and missile capabilities that must act as leaders in developing new, stricter non-proliferation measures. Russia is ready for such work. We are engaged in consultations with our American friends."
That is very true and in fact that is what we are doing and why I came to Russia this week.
At about the same time that President Putin put forth his program, President Bush forwarded a similar policy initiative in the U.S. called the Global Nuclear Energy Partnership, or GNEP.
This initiative will develop the technologies that could further spur a nuclear expansion by recycling used fuel, while at the same time addressing spent fuel disposition and nonproliferation concerns.
Under GNEP, fuel supplier nations would commit to operating both nuclear power plants and fuel production and handling facilities. They would then provide fuel services to user nations who would operate the nuclear power plants themselves.
If supplier nations can provide the fuel services in a commercially attractive form - and from a diversity of suppliers - it will reduce incentives for nations to acquire sensitive fuel cycle technologies, reduce stockpiles of separated plutonium, enable proliferation resistant reactor technology, and strengthen safeguards technology.
We welcome Russia to this strategic partnership and look forward to working with them on the policy and technology necessary to bring the developing world clean, safe, and affordable nuclear energy in a proliferation resistant manner.
Moving forward, our joint cooperation in the spread of nuclear energy will, indeed, be a tremendous development; and one that could literally change the world.
No one could've imagined, even 20 years ago, that our 2 nations would be working together - in partnership - on ways to expand nuclear energy to the world. This is the result of a maturing of our relationship that has seen old Cold War fears melt into an era of new opportunity.
Just a generation ago, it was inconceivable to think of a world where Russia and the U.S. were not enemies, but were allies, and great partners.
Now as 21st Century partners, our nations can push each other forward. We are already making significant progress on energy expansion and non-proliferation issues - and we must see this continue.
And by moving forward together on matters such as energy efficiency, expanding the use of alternative energy, and cultivating a fair, open, and transparent energy market, our 2 nations can continue to make a difference in the world.
And years from now, rather than our relationship being remembered for the vices of the past, it will be remembered for the virtues of our future.
That is what I see. That is what I hope for. And that is what we, in the United States, are committed to.
Thank you.
