Quantcast

Lithuanian Energy Freedom: Will the US Help?

Lithuania and our Baltic neighbors of Poland, Latvia, and Estonia are shining examples of the transformative nature of freedom, democracy, and open markets.

As for me, personally, I like to say that I am a “kid of the Reagan revolution” since I came of age in Vilnius in the 1980s. I joined the Ministry of Foreign Affairs in 1993 and—inspired by American ideals—I have served as Lithuania’s ambassador to the United States since August 2010.

It has been an inspiring experience. But one thing has perplexed me: how America seems to exempt its energy policies from its ideals. Let me explain.

Read On

Elisabeth Braw's picture
Transatlantic Connection
Follow weekly commentary in Elisabeth Braw's World Affairs blog.

During fifty years of illegal and often brutal occupation, the Soviet Union designed an energy infrastructure for Lithuania that made it totally dependent upon Russia for oil and natural gas. After the re-establishment of independence in 1990, we moved from suffering under the status quo to accepting the need for change, and finally to making steady progress toward energy independence.

For the entire duration of Lithuania’s energy “evolution,” Russia abused its position as a monopolistic supplier, forcing us to pay far more than our European neighbors for both oil and natural gas. On numerous occasions, the Kremlin used energy as a political tool.

In 2006, for example, the Druzhba (“Friendship” in Russian) oil pipeline was shut down by Russia for so-called “technical repairs” after Lithuania refused to sell its oil refinery to a Russian-led consortium and after a rousing speech by Vice President Dick Cheney outlining US goals for democratic freedoms, free-market economies, and energy security in Eastern Europe.

Fortunately, Lithuanian leaders had long anticipated just such a disruption and in 1999 completed an oil import-export terminal on the Baltic Sea, which has been used since the shutdown. Today, eight years after Russia’s attempt to re-subordinate Lithuania, the Druzhba pipeline is still shut down despite dozens of offers over the years by both Lithuania and the European Union to make the necessary “technical repairs.”

In the aftermath of the ongoing Druzhba oil pipeline troubles, Lithuania’s political leadership moved deliberately to diversify our sources of natural gas as well, and thereby reduce our complete dependence on Russia.

Our quest led us to lease a floating liquefied natural gas (LNG) storage and regasification vessel—appropriately named Independence. Now docked at the Lithuanian port of Klaipeda on the Baltic shore, this vessel is already fully operational.

Lithuanian President Dalia Grybauskaite summed up the importance of the LNG terminal by noting that “no one ever will blackmail us over gas prices or influence, through energy, our political or economic life.” The president described the Independence as “the most sophisticated vessel that will serve not only Lithuania, but also the entire Baltic region. Lithuania is becoming a stable energy nation.”

In a speech given in Istanbul, US Vice President Joe Biden later described the Lithuanian LNG terminal as a milestone development and stated that “the region that was once almost entirely dependent on Russia has seized the initiative and now is on track to achieve greater energy security and not incidentally greater freedom.” He ended by warning: “But we can’t rest on our laurels.”

 

And we have not: We continue to focus on interconnections and question of alternatives of supply. The gas interconnections between Poland and Lithuania and Lithuania and Latvia are being built and enhanced, and we are pursuing the challenging goal of integrating the isolated gas markets of the Baltic states into what the EU calls an Internal Energy Market. The only thing Lithuania needs now is a politically reliable, reasonably priced, long-term supply of natural gas. America, in the middle of an energy boom and with a stake in strengthening Lithuanian freedom and energy independence, would seem to be a natural choice of supplier.

But when I studied the list of companies that have applied to the US Department of Energy for a license to export American LNG to nations such as Lithuania, via the first of the LNG export terminals scheduled to go online in late 2015, I found that most of them are already “fully subscribed and contracted.” I also discovered that at least a dozen companies have gas to sell but are waiting to get their export licenses from the US government. So, in every meeting on Capitol Hill and with executive branch officials, I’ve been asking the same question: Why doesn’t America lift its self-imposed limits on natural gas exports to help free countries such as ours from energy blackmail?

America’s shale gas bonanza means that the US will become a net exporter of natural gas very soon. Why not share this energy abundance with those friendly nations who need it to escape the Kremlin’s energy chokehold, and who are also willing to pay market rates for it? Lithuania would be the first customer.

Historically, we have been paying the political price for Russian gas for so long that we almost got accustomed to it, but I still trust that a world gas market driven by the American natural resources could change everything.

 

There is no “magical” solution, and finding alternative energy sources and reducing overreliance on particular suppliers isn’t something that one can change overnight. On the other hand, Europe has to stick to its priorities and act accordingly. Projects that seek to diversify gas supply sources and routes to Europe need a stronger political backing by the EU as well as by the US, and should be made more attractive to European and American investors. These would include priorities like the elimination of “energy islands” (such as the Baltics) and the support of the Southern Gas Corridor and other infrastructure projects that aim to bring Caspian energy resources to Europe. Such projects are vital for enhancing the EU’s energy security, and therefore should be treated as such.

European member states would be wise to implement the EU’s Third Energy Package without further delay. This would open internal gas and electricity markets and ensure that they are competitive and transparent. Member states have to think beyond their short-term interests and focus on long-term interests, which coincide with the wider interests of the EU. This long-term thinking, however, is currently being clouded by indecision and delays in the implementation of the energy legislation.

I have been convinced for a long time that transparency, open competition, and rule of law are the greatest foes of the Russian energy giant Gazprom in the European market, and the surest antidote for Russian energy blackmail. The solidarity of European states has never been as vital as today. It is particularly important in light of Russia’s aggression in Ukraine, which has dramatically increased concerns about European security writ large, and especially about overreliance on Russian gas. Europe imports about one-third of its gas from Russia, of which about fifty percent travels through Ukraine. That is why we have struggled to diversify our sources and routes of supplies.

Lithuania has never forgotten the Soviet occupation. We have been called “Russophobic,” but unfortunately our so-called phobia has proved to be an accurate reading of the kind of coercive state Russia has become at home and abroad. Its aggression in Georgia should have been the wake-up call that its aggression in Ukraine has belatedly become. Between these two events, the lesson has been reinforced over and again that it is not possible to trust a country that does not respect its neighbors, or its international commitments, and is willing to use actual as well as energy weapons to enforce its will.

And yet I remain optimistic because I believe in America and American energy. I believe that America will do all it can to enhance the energy security of its allies today, not years from now. Or, to put it simply, that America will be more “American” than it has been when it comes to doing the right thing with its energy abundance on the world stage.

Zygimantas Pavilionis is the Lithuanian ambassador to the United States and Mexico and holds a Ph.D. in political science from Vilnius University.

OG Image: