Speaking notes ´Eurasian Energy Market Security´

Toespraak | 15-10-2009

Speaking notes Ms M.J.A. van der Hoeven, the Netherlands Minister of Economic Affairs, Clingendael Roundtable on "Eurasian Energy Market Security" with Ambassador Richard L. Morningstar in The Hague, 9 October 2009.

Mr Ambassador, Ladies and Gentlemen,

  • It is a delight to be here today and speak to you on the issue of Eurasian energy market security.
  • In Kazachstan, over the past few days, I have again witnessed first-hand the complexities involved in integrating Eurasia into our overall effort to secure Europe's energy future.
  • Potentially, future oil and gas supplies from the Caspian Sea region are vast. No doubt about that.
  • The Kashagan oil field, for instance, in the northern part of the Caspian Sea, will at some stage produce about a million and a half barrels a day. This is no 'easy oil', so to speak, far from it. Natural circumstances require state-of-the-art technology, and I was deeply impressed by the scale of the project that is being worked on. Here we will continue to find plenty of opportunities for our businesses. We can provide the technological expertise that is lacking in the region itself.

Transport options

  • As to Eurasian gas supplies to Europe, there Kazachstan encounters difficulties, mostly relating to a lack of transport options. I had an interesting meeting on Wednesday, with Mr Balgimbayev, chief advisor to the Kazakh President on issues relating to the exploitation of Caspian Sea Resources. He explained that Russia and China are at the moment to be preferred as trading partners. The EU fails to speak with one voice, so he said. European countries seek to enter into trade deals individually. That is too fragmented an effort, according to Mr Balgimbayev.
  • Let's face it: European countries one by one just cannot compete with Russia and China. This makes a strong case for pursuing Nabucco. We need initiatives like Nabucco to succeed, otherwise we will be left empty handed.
  • Like the US, the Netherlands feels very strongly about involving the Caspian Sea region in our overall energy policy. We must work out a way of enabling countries like Kazakhstan to strike a balance between trading partners in the East and West.

EU energy programme well on course

  • Mr Ambassador, your presence here today is much appreciated. The US is showing a deep commitment to what we now refer to as 'energy diplomacy'. In the Eurasian region, particularly, it is vital that we work together, and (indeed!) speak with one voice.
  • I would like to emphasise here that the EU energy programme is well on course, regardless of difficulties. A substantial effort is being made, aimed at further diversifying energy supply routes and sources, as well as stimulating a low-carbon energy programme. This is already showing an effect in the Eurasian region.
  • Infrastructure is key, so we are glad the Southern Energy Corridor is now firmly taking shape. The CPC pipeline, for instance, already is by far the most important export link for Kazakh oil. Also, electricity and gas interconnections are being developed in the region, and preparations for Nabucco have started.
  • Increasingly, all the more so as we approach Copenhagen at the beginning of December, our energy policy (energy security included) is being discussed in the light of our urgent effort to combat climate change.

Ambitious climate targets

  • The Netherlands has set ambitious climate targets, in line with EU targets for 2020. Major investments in renewables, wind energy most prominently among them, are currently underway.
  • Likewise, enhancing energy efficiency, will also prove instrumental in fighting climate change and promoting energy security.
  • In Kazakhstan this week we signed a Memorandum of Understanding, outlining a state-of-the-art project on energy efficiency. Countries like Kazakhstan need to be drawn into the global effort to reduce carbon emissions. The efficiency project we will be supporting was set up by the IEA. I am sure it will further boost Kazakhstan's involvement in the international world of energy, which is just what we need.
  • All in all, considering our Eurasian energy strategy, we face new challenges in markets that are highly politically charged and find ourselves looking for new modes of cooperation, new partnerships.
  • I have no qualms about saying that Dutch energy policy is about pursuing the interests of the Dutch people. Of course it is. That to me seems only natural. I do wish to underline, however, that national policies, including bilateral contacts, serve to benefit the rest of Europe also. The Netherlands has a clear task cut out for itself in this respect.
  • Our commitment to help raise energy security and reduce carbon emissions shows up in all our efforts in the field of international energy politics.
  • The Netherlands is a committed member of the Pentalateral Forum, made up the Benelux, France and Germany. Our strategy is one of market coupling, and its proving successful. The Forum is now also looking into ways of removing barriers for cross-border trading in gas.
  • It is one of a range of initiatives that contribute to a North-West European gas market emerging ever more strongly. The Netherlands is keen to function as a gas hub, providing storage, trading and shipping facilities to countries worldwide. We are in the process of building LNG terminals in the Port of Rotterdam, for instance. As a gas hub, the Netherlands will help diversify supplies and thus help safeguard energy security in a major part of Europe.
  • Furthermore, we are the only EU Member State to take up an observer position at Gas Exporting Countries Forum. It is in the interest of Europe as a whole to be represented in this consulting body.
  • As part of our gas market policy, we aim to establish good business relations with Russia. This will, of course, benefit the rest of Europe also. Russia is a close neighbour. We simply need Russian gas to meet present and future EU demand. Nordstream, therefore, is a must. Evidently. Equally importantly, though, there is the Caspian Basin to think of.
  • Energy diplomacy should cover a wide range of countries and issues, so much is clear. At all times, however, Russia's integration into a multilateral governance system is of paramount importance. Russia has meanwhile rejected the Energy Charter Treaty, though did not 'opt out' altogether. At the moment, the impact of this Russian move on the future of ECT is unclear.

Transatlantic economy

  • This is one of many issues on which we welcome the active involvement of the US. The current economic crisis has shown to what degree our economies are intertwined. Energy is a major component of the 'transatlantic economy', so I am most happy about the US proposal to establish a US-EU energy council. We will not run out of issues for discussion, we can be sure of that!
  • I would also like to call on the US to continue its commitment to the International Energy Forum. We need a platform like the IEF to balance security of supply and demand. Producers and consumers need to meet, face to face, in order to build trust and maintain dialogue.
  • In Paris next week I will chair the Ministerial meeting of the IEA. Our overall aim is to prepare for discussions in Copenhagen. One of the sessions will be devoted to broadening notions of energy security. Raising awareness of the importance of energy efficiency among Eurasian countries will help us reach our climate targets and will promote energy security. The Copenhagen framework is relevant to our business in the Caspian region, I would like to emphasise that.
  • Let me conclude by saying that the growing interdependence among countries and regions, together with rising global energy demand and an urgent need to reduce carbon emissions, has set a major challenge before us. In the Eurasian region, particularly, energy diplomats as well as energy companies enter complex territory. We greatly appreciate US commitment to the task ahead. Our field of work is more dynamic than ever, more complex than ever, and in any case more challenging than ever. In other words: today's Roundtable I consider most appropriately timed and I look forward to our discussion.

Thank you.