FOR THE RECORD: U.S. energy secretary's remarks in Kyiv (06/12/05)

FOR THE RECORD: U.S. energy secretary's remarks in Kyiv

Following are excerpts of remarks by U.S. Energy Secretary Samuel Bodman at the Energy Security Conference at Kyiv Polytechnic Institute on May 26. The full text (as prepared for delivery) was provided by the U.S. Embassy in Kyiv.

... President Bush asked me to come to Ukraine because of the shared bonds we hope to strengthen, and because of the similarities between our nation and all the nations of this region.

Chief among those, it seems, are the similar energy and economic challenges we share as we embark upon the 21st century.

The next few decades promise to be an exciting time for this region. Democracy is taking hold, economies are growing, and because of the increasing flow of Caspian oil to world markets, Ukraine and the other nations of this region have the opportunity for greater prosperity because of the prospect of greater energy independence.

But the abundance of opportunity should not obscure the fact that there are serious energy challenges looming over these next few decades. These are problems that face not just your nation, or my nation, but every nation on the planet that is interested in economic growth, in improving the lives of its citizens, in raising standards of living. ...

At present, the world consumes 82 million barrels of oil each day, a number that global oil markets are straining to meet. Our experts anticipate that this figure will jump by 50 percent in the next two decades. Consider that, by the year 2025, the world is slated to consume 120 million barrels of oil each day.

We have all heard it said that energy is the lifeblood of any economy. Oil, gas, and electricity are critical to a functioning and growing nation. For all nations, economic and social well-being depend on safe, affordable and dependable supplies of energy.

It becomes very clear, then, that the question of energy security is not just a question of economic security, but of national security as well.

So in a world that can expect to see a massive jump in demand for energy over the next two decades, what steps must be taken to ensure this security?

There seems to be a simple answer - to ensure energy security, a nation needs to maintain a diversity of fuels from a multiplicity of sources. In my view, it is unwise for a nation to become overly dependent on one type of fuel, or to become overly dependent on one supplier. Doing so is an invitation to economic difficulty, political instability, or both.

A diversity of fuels and a multiplicity of sources is the simple answer, but, of course, it is really not so simple to accomplish. Achieving diversity of supply is long, hard work, involving diplomacy and requiring investment. Diversity of energy supplies involves traveling the world, seeking suppliers and encouraging exploration. The opening of the Baku-Tbilisi-Ceyhan Pipeline yesterday, for instance, is the culmination of many years of work and negotiation by many parties, by many countries and will add to overall energy security and market stability. I am very proud of my government's involvement in the Baku-Tbilisi-Ceyhan pipeline project. Our participation is just one of many, many steps we are taking in a bid to ensure our own energy future.

We are looking to diversify our supplies of traditional energy sources like oil and natural gas by boosting domestic production, such as President Bush's proposal to allow oil and gas exploration in a small portion of the Arctic National Wildlife Refuge in our state of Alaska. And we are looking for ways to increase our imports of liquefied natural gas, and have sought cooperation with potential suppliers in Russia, Australia, Africa and the Caribbean, as well as the Middle East.

But in order to meet our growing energy needs, we are looking beyond traditional sources to the energy sources of the future. Technology holds the key to new sources of energy that are both highly efficient and environmentally responsible by reducing the level of greenhouse gas emissions.

As many of you know, Presidents Bush and Yushchenko agreed last month to work cooperatively on energy issues. President Bush is very committed to helping Ukraine increase its energy independence, diversify its energy trade, and restructure its energy sector into a more-robust part of the economy. It is one of the reasons I am here this week.

But if I may, I'd like to suggest that there is something broader at stake. Ultimately, the best path to energy security and independence is that path of freedom. President Bush has made spreading the light of freedom a beacon of his presidency. Upon being sworn in to a second term, President Bush declared that "the survival of liberty in our land increasingly depends on the success of liberty in other lands. The best hope for peace in our world is the expansion of freedom in all the world." He added, very eloquently, I think, "Across the generations we have proclaimed the imperative of self-government, because no one is fit to be a master, and no one deserves to be a slave. Advancing these ideals is the mission that created our nation. It is the honorable achievement of our fathers. Now it is the urgent requirement of our nation's security, and the calling of our time."

The president consistently and forcefully speaks about the foundations that sustain human freedom and support successful democracies - freedom of speech, freedom of assembly, a free economy, an independent judiciary, the rule of law, and freedom of worship. freedom is the key to progress, stability, and prosperity in the 21st century world.

And free markets, free economies, entrepreneurship, regulatory certainty, the rule of law are essential ingredients for true prosperity to grow. ...

This has been the experience in my country. For all the problems we Americans have - like our growing dependence on imported oil - the United States still has one of the strongest energy positions in the world. In part this is because of our policy of seeking a diversity of supply and suppliers. But it is also because our policy of diversifying supplies relies on commercial investment in energy projects. We don't tell our companies where to invest or where to buy oil. It is up to them. Just as it is up to them to assess risks and determine the economic feasibility of investment, whether in infrastructure, exploration, or new technologies. Neither do we set the prices that consumers pay. We feel the market can do a better job of establishing and changing prices than any government entity could.

The United States discovered this the hard way.

In the early 1970s, our government instituted price controls on gasoline. The hope was that it would keep a lid on inflation and protect consumers. The policy failed utterly. Instead of low-priced gasoline for our citizens, there was no gasoline. The policy led to shortages, hoarding, rationing. Instead of stability, we got panic. It was a painful lesson to learn and live through, but we learned it, and learned from it.

And I think that a large part of the credit for the economic expansion the United States experienced in the 1980s and '90s is due to the fact we put those notions behind us and put more faith in letting the free market determine prices. I mention this story to make the broad point that energy security is best achieved if societies and economies are free. If there is any message I want to leave with you this afternoon, it is that.

I encourage you to continue down the path to greater freedom and democracy. I know you will. When President Yushchenko visited America, he was welcomed as a courageous hero. The people of my nation were thrilled by his words as he concluded his address to our Congress: "Ukraine is free," he said, "and will always remain free."

Those words are an inspiration, not only for Ukrainians, but for people in all the nations of Central Asia. ...

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