Richard Morningstar, U.S. Special Envoy for Eurasian Energy Roundtable with Turkish Journalists

Ankara July 12, 2009

Embassy Spokesperson:  Thank you to all for coming today.  Ambassador Morningstar is the U.S. Envoy for Eurasian Energy and has come to Ankara to voice U.S. support for the Nabucco Pipeline project.  He is also ready to speak to larger issues regarding U.S. energy policy today.

Question: Welcome to Turkey and thank you for joining us. We are at a critical point right now. The Nabucco Project, the inter government agreement will be signed just a few moments from now on. Why do you think the Nabucco Project is this important for the world for Europe and for the United States?

Morningstar: I think it’s important for a lot of reasons by increasing energy supplies from a global standpoint. An increase in energy security for Europe is important to the United States, because obviously it’s important to Europe as well, but it’s important to the United States as Europe is our partner. We want a strong economic Europe and a partner that can deal with all sorts of global issues. Nabucco is important from the standpoint of developing the economies of the countries in the Caucasus in the Central Asia Region and we have always been a supporter of Turkey’s role as a transit country and Turkey’s role as a leader in the region and I think Nabucco helped to (support) that.

Question:  When we are writing our stories, when you are live on TV you always say that the Nabucco project is going to change the energy balances in the world. Do you agree with that?

Morningstar: Yes. Nabucco will change balances from the standpoint that it will increase the production of energy in the Caucasus in Central Asia and will help bring diverse supplies to Europe and the development of natural resources.  For example in Azerbaijan and Turkmenistan and in other countries it will also free up resources in other parts of the world that would otherwise have to go to present consumers. So, it’s really to the benefit of everybody.

Question: It is not only going to change the energy balances, it will change the political balances.

Morningstar: Well, you know we’re concerned about the energy balances. We are also concerned that, we want the countries in the region to develop both economically and politically and this will help that as well.

Question: The agreement is now going to be signed but there are lots of discussions going on still about the participation of, for example, Iran. Although we know quite well how you look at Iran’s position I will ask you to evaluate.

Morningstar: I think our position on Iran is very clear. We do not think that Iran today should be a participant in Nabucco. We have tried to engage with Iran. So far with little results, but hopefully that will change. We don’t know what the effects of events in Iran during recent weeks will have on potential negotiations between us and Iran. We hope that we will be able to engage and we hope that we will be able to resolve our outstanding issues. Particularly in the nuclear area, but in other areas as well. If we can ultimately normalize relations with Iran then Iran will be able to participate in a much greater way in the energy sector and we hope that will be an incentive for Iran to want to normalize relations.

Question: What about Russia? Russia is working on an alternative project called South Stream but they might be a source as well in the Nabucco pipeline.   What do you think about Russia being a source for Nabucco?

Morningstar: Well, you know the way the Nabucco agreement is set up, 50 percent of the gas is open to competitive bidding for suppliers to bring gas to the pipeline. And Russia is certainly under the agreement, free to compete to put gas into the pipeline on an open competitive basis and mostly if they take advantage of that opportunity.

Question: When the Nabucco pipeline reaches the point of 30 billion cubic meter capacity, will source countries be able to fill the pipeline? Because that is a very important topic also.

Morningstar: Well we think so. And one of the great advantages of the signing of this agreement is that it will give impetus and confidence in the process. But that process has to continue and there are countries that are potential sources such as Azerbaijan, Turkmenistan, and Iraq. We think that there is enough gas available in those countries to fully supply Nabucco. It is going to be important that Turkey and Azerbaijan reach an agreement with respect to the pricing of gas and transit arrangements and certainly I think that gas from Azerbaijan is going to be important to get the project started. But ultimately we think there are real opportunities with other countries as well to be sources for the gas.

Question: Iraq for example. Do you think Iraq will be stabling up to import gas to Europe to Turkey?

Morningstar: We certainly hope so and think that it’s possible. Arrangements will have to be made between the national government and the Kurdish government in the north as what the structure will be for agreements that take place with respect to Iraqi gas coming from the north. There appears to be a lot of gas there. There are companies that are interested in bringing that gas to Turkey and then on to Europe. We are hopeful that that will develop and that the national government and the Kurdish government will be able to reach an agreement as to how that can take place.

Question: Thank you very much.

Morningstar: Thank you.