Senator Richard Lugar Report Energy and Security from the Caspian to Europe

On December 12th, 2012 Republican Senator Richard Lugar submitted a report to the Senate's Committee on Foreign Relations United States Senate titled Energy and Security from the Caspian to Europe.  The report advocates placing NATO allies on equal footing with free trade partners under U.S. law in providing for automatic licenses for U.S. LNG exports. The PDF Report can be downloaded here. 

The introductory letter for the report is below.  

Washington, DC, December 12, 2012.

DEAR COLLEAGUES: For years, I have pressed for greater U.S. diplomatic engagement to realize the immense strategic and economic benefits of opening an oil and natural gas Southern Corridor from Central Asia and the Caucasus to European and global energy markets. I asked my Foreign Relations Committee professional staff members, Neil Brown and Marik String, to travel to Azerbaijan, Turkey, and Turkmenistan to assess progress on the next installment of the Southern Corridor to bring Caspian basin natural gas to Europe. This strategic U.S. initiative would advance U.S. interests by alleviating Russian gas-fueled pressure against NATO allies, bolstering bilateral relations in the Caspian Sea region, and further isolating Iran.

After years of infighting between energy companies involved in the project, the Southern Corridor for gas to Europe appears within reach. This result likely would not have occurred absent U.S. energy diplomacy over the last decade. Revitalized U.S. leadership is needed to fully realize strategic benefits for the United States.

This SFRC Minority Staff report provides background analysis and recommendations that will advance U.S. national security and economic interests. I would highlight three recommendations for Congressional consideration. First, the State Department should restore the dedicated, high-level position of U.S. Envoy for Eurasian Energy Security to ensure that U.S. interests are advanced at the highest levels of government in the Caspian region where energy decisions are made. Indications that the Envoy position will be subsumed, as opposed to better coordinated, within the State Department’s new Energy Bureau threaten to undermine confidence in U.S. resolve regarding energy security and our broader commitment to the region.

Second, the United States must make clear that our strategic interest lies in Caspian gas reaching our NATO allies in Turkey, Central and Southeastern Europe, and beyond, who are in acute need of energy diversification due to vulnerability to Russian energy cutoffs. If the gas instead arrives at destinations in Western Europe with multiple supply options, Congress should reexamine the merits of a statutory exemption from Iran-related financial sanctions for the further development of Azerbaijan’s Shah Deniz gas field, the source for initial stages of the gas corridor.

Finally, Congress should swiftly pass the Liquefied Natural Gas (LNG) for NATO Act. My legislation would place NATO allies on equal footing with free trade partners under U.S. law in providing for automatic licenses for U.S. LNG exports. Unlike in past years, U.S. domestic shale natural gas production affords us the opportunity to directly alleviate the dependency of our NATO allies in the Baltics, Central and Southeastern Europe, and Turkey on Russian supplies, and further isolate Iran, while benefiting the U.S.economy by opening new markets. This staff report provides further background on the Southern Corridor. I welcome any comments you may have.

Sincerely,

RICHARD G. LUGAR,

Ranking Member.