The United States is working to ensure that energy resources are used to drive economic growth, stability, and cooperation, rather than conflict. But the task is made more difficult when a region or country is overly dependent on one source for its fuel. This is certainly the case for Ukraine and many other European countries that rely heavily on Russia for their energy.
Earlier this year in June, after weeks of negotiations, Russia unfortunately ceased supplying gas to Ukraine. “The situation is urgent for Ukraine,” said Acting Special Envoy and Coordinator for International Energy Affairs Amos Hochstein, during recent Congressional testimony.
While Ukrainian production is sufficient to cover summer demand, without Russian gas Ukraine will not be able to meet its consumption needs when the heating season resumes. The impact has thus far been minimal in Europe for similar reasons.
However, said Acting Special Envoy Hochstein, an energy crisis in Europe may be just around the corner. On an annual basis, Russia supplies more than half the gas consumed in Ukraine and more than a third of the gas consumed in the European Union.
Supply diversification is critical to mitigating the impact of such a cut off. That’s why the U.S. supports the building of new liquefied natural gas terminals. Europe and Ukraine also need a diversity of import routes.
With that in mind, the United States strongly supports the creation of the Greece-Bulgaria Interconnector, which will allow gas from the Southern Corridor pipeline to supply gas to Europe. For the same reason the U.S. supports proposals to build an extension of the Southern Corridor from Albania all the way to Croatia, once enough gas becomes available, ultimately supplying neighbors Hungary, Ukraine, and others.
Part of the answer for Ukraine’s energy security is its integration into the EU’s energy market. But before that can happen, Ukraine must reform its energy sector, purge itself of corruption and inefficiency, and reduce its fiscally-crippling energy subsidies for consumers.
The U.S. has worked closely with the governments of Ukraine, Hungary, Poland, and Slovakia and with European energy companies to promote gas exports from Europe into Ukraine. Thanks in part to these efforts, gas is now flowing from both Poland and Hungary into Ukraine. Ukraine also signed an MOU on April 28 with Slovakia to allow reverse-flows to Ukraine starting in September.
The United States remains committed to helping Europe and Ukraine ensure their economic prosperity and security by diversifying both their energy sources and import routes.