US senator presses State Department to take stronger energy role

Washington (Platts)--12May2006

US Senate Foreign Relations Committee Chairman Richard Lugar Friday used
a hearing on ambassadors designate to Ukraine and Azerbaijan to continue his
push to make the State Department more pro-active on international energy
issues.

"I want to ensure that they and other ambassadors have the support and
institutional expertise necessary to effectively deal with energy issues,"
said Lugar, according to a copy of his statements provided to Platts.

"In my judgment, the State Department must greatly increase its capacity
to address energy issues at the highest levels of its bureaucracy," Lugar said
during the confirmation hearings of William Taylor Jr, who is President Bush's
nominee for Ukraine, and Anne Derse, Bush's choice for Azerbaijan.

Lugar, an Indiana Republican, also urged Daniel Sullivan, whose
nomination as assistant secretary of state for economic and business affairs
is before the committee, to "develop a sharp focus on energy as quickly as
possible."

Since last year, Lugar has been warning that the US and other
countries must work more closely to address energy security, including the
need to assure adequate supplies from reliable sources.

Lugar noted that Russia's state-owned Gazprom briefly cut natural gas
supplies to Ukraine earlier this year, restoring it after the price of the
commodity nearly doubled. "Like the United States, Ukraine's energy import
dependence makes it vulnerable to price volatility and the manipulation of
supplying countries," he said. "Development of alternative fuels, along with
rapidly increased efficiency, should be a central area of cooperation with
Ukraine."

"With Azerbaijan," Lugar said, "we should continue to assist in opening a
southern corridor for oil and gas transit to Europe, but also work with the
Azerbaijan government to promote transparency in the energy industry, and
development of alternatives to oil and gas that will strengthen the country's
future."

In March, Lugar introduced legislation that would create a coordinator
for energy diplomacy in the secretary of state's office, and "expand the
profile of energy considerations" within the department.

"Unfortunately, despite a good deal of prodding, the State Department has
not been able to express a definitive view of the bill or its needs in this
area," he said. "The Foreign Relations Committee plans further hearings on
this topic, and we intend to be persistent."

--Bill Loveless, bill_loveless@platts.com

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