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Columbia University, New York, September 20, 2006

Honorable guests,

Ladies and gentlemen,

Standing in front of this distinguished audience, I ask myself of my purpose of being here.     On the surface, global energy and Lithuania seem too distant topics to be discussed together. The amount of oil we produce can hardly affect global energy markets. Neither is Lithuania at the hub of the global energy transit flows. Therefore, the possibility that my speech will test your patience rather than challenge your views cannot be entirely dismissed.  I hope that the organizers have insured themselves against this possibility.

However, I accepted this invitation to speak on energy with great excitement. Not only because raising Lithuania’s most pressing problems in this room is already a great advantage, but also because everything has become so intertwined in this complex world that Lithuania also participates, no matter what, in global energy development. Just a short glimpse on the ongoing EU-Russia dialogue reveals the important role of Lithuania in this process.

The role of small nations should not be underestimated. Commitment to the principles of cooperation, transparency and broader institutional regulation is typically the strong point of the small. Lithuania is no exception. We can make a difference if more transparency and more international regulation are needed in global energy markets.

On the other hand, as we increasingly compete at the level of ideas and innovations, the size of the state is no longer important. Sometimes the small must be more innovative to cope with the same challenges as the large but at a lower cost. Thus, bright ideas need not necessarily come only from world-class universities.

That bright ideas have better changes to burst in the conditions of greater intellectual concentration is also a fact, though.  Enhancing this concentration is still a huge problem. Research and Development funds are scattered across the states and universities without overarching goals. We spend billions on Research and Development, hardly knowing what we want to achieve. Thus, defining global tasks for our Research and Development policies would be a strategic goal.  It is equally challenging to the big and the small. Perhaps, we should no longer limit ourselves to such conventional notions as ‘nation state’ or ‘European’ and ‘transatlantic’ community, but rather start speaking in terms of Western civilization.

I have no doubt that in the development of this new strategy focus on energy challenges will take a central place.

Ladies and gentlemen,

As the Old Prussian saying goes, “Diplomacy without arms is like music without instruments”. Perhaps, Modern Prussians would rephrase it as follows: “Diplomacy without energy is like music without instruments”.  

Energy has indeed become an inseparable part of European and transatlantic politics. On the one hand, the continued growth of developing markets has substantially increased global demand for energy resources.  In Lithuania alone, the economy has been growing by 7.5 percent on average during the last six years. We all need more oil and gas and new production capacities.

But on the other hand, the new tunes in the Russia-Ukraine gas dispute last year sent a serious signal. The European Union highly depends on imported energy resources. Nearly 54% of gas and 76% of oil consumed in the EU is imported from the third countries.  In 2030 imported energy will reach more than 80% for gas and more than 90% for oil. Thus, the question of where Europe will buy energy resources is already here.

Today Russia’s share in European energy imports is substantially large and constantly growing.  To welcome or to fear this fact is still unclear, as Russia’s prospects of becoming a full fledged free market democracy remain uncertain.  We believe that Russia will continue on the path of reforms, thus increasing the role of free enterprise in its economy, including its energy sector. But regardless of whether these hopes will come true or not, it is already obvious that the EU-Russia cooperation will have a huge strategic impact on European and global development. Lithuania, a member of the EU and a neighbor of Russia, can play a role in developing this cooperation.

Our interests in the EU are twofold. First, we need a more integrated energy policy of the EU. Second, we have to create more effective instruments, including Common Foreign and Security Policy, to promote our energy interests more efficiently. I believe that the U.S. can contribute in both cases; we just need to be a little bit more open and self-confident to engage the Americans in this exercise.

Ladies and gentlemen,

Building a common energy policy is one of the major topics on the EU agenda. Growing deficit in European energy resources and skyrocketing energy prices stimulate intense thinking in three directions.  First, diversification of supplies by source and geographic origin.  Today European generation capacities heavily depend on fossil fuels, like oil and gas.  To change this balance is one of the key challenges.

Some EU Member States have adopted ambitious strategies which should end their dependence on oil by 2020. Others revert to their once suspended files on nuclear energy. In Lithuania, too, discussions thrive on what sort of energy our country will use after the foreseen closure of Ignalina Nuclear Power Plant in 2009. Not so long ago, an agreement was reached with the other two Baltic States, Latvia and Estonia, to build a new modern nuclear reactor in Ignalina. The ranks of the EU countries interested in this project have expanded since, including Poland and Sweden.

However, my feeling is that the diversification debate still too much depends on conventional thinking and is overwhelmed by geographic details.  The ‘new’ energy projects circulating in the EU are largely focused on pipelines and other infrastructure. This discussion is of course very important.  We must have access to the Caspian Basin and the other energy-rich regions to diversify our supplies.  This is especially true for such countries like Lithuania, which import almost 100% of their energy sources from a single supplier. Without an alternative, we all become extremely vulnerable.

But on the other hand, new pipelines will solve only part of the problems. The greater challenge is to restructure our energy markets so that we no longer depend on fossil fuel monopolies.    We need a breakthrough in energy generation, transmission and accumulation methods. And Europe is taking only its first steps in this direction.

I guess, there is hardly a better place to speak of new innovations than Columbia University, one of the leading world universities. In the past, I was actively involved in research activities at the Institute of Physics of Lithuanian Academy of Science. I brought a simple conclusion with me from that period: Energy is all around us. We only have to learn how to bring it under control and apply it more universally.

To tell in which field of research new forms of energy will be discovered is still too early. Maybe in biology, but maybe in chemistry or in mathematics. This is not the point after all.  The point is that European Research and Development policies will not deliver a breakthrough unless they are fundamentally reformed. Research and Development policies have to be liberated from national jurisdiction and narrow ‘national’ interests. This is a challenge for the Western community as a whole.

Let me give you one example. New forms of energy generation, transmission and storage may remain for years under lock and key in patent institutions, if the companies or the national governments, who sponsored the research, don’t want to share their knowledge with us. If we learn to transform the sand from the Moon into electricity, so why to keep this knowledge in secret? Financial profits must always be weighted against the value added in terms of global peace and development.

The process of pooling the competences of all European states, large and small, in Research and Development is already under way. We also see a growing discussion in the other two sections of the so-called EU’s ‘reflection on energy’ – namely, energy efficiency and development of Single Market.  Lithuania seeks active participation in both.  For us, energy efficiency is a sore subject.  Compared to GDP, Lithuania uses two times more energy than the EU average and three times more than, say, Denmark.  The Soviet legacy is only part of the reason. We also need a closer look at how and where we spent energy. Buildings and energy systems have to be renovated; people should be encouraged, through taxes and education, to save energy. Membership of the EU has opened access to the EU funds, which can help the Government in this respect. I believe that Lithuania has a potential of becoming one of the most energy efficient nations in the EU.

Ladies and gentlemen,

The EU as such originates in European Coal and Steal Community and Euroatom. One of their primary tasks in the early 1950s was to regulate energy relations in Europe. These two communities later developed and transformed into Single European Market, which now ensures free movement of people, goods, services and capital across the European continent.

In modern times, coal has been replaced by oil and gas, which raise new forms of dispute between Member States, as well as in their relations with partners. But key challenge remains the same. Europe has to restructure its energy market so that European nations cooperate rather than compete with each other in pursuing their vital energy needs. Liberalization and integration of the energy markets is a promising step.   

For Lithuania, integration has a much deeper sense than for many other EU members.  Together with Latvia and Estonia, we live on an energy island, which is isolated from the European networks.  Our grids are connected only with each other and the former Soviet republics.  This situation severely curtails our possibilities of participating in the European energy market.     We need bridges to reach the European mainland.

Two important projects have been developed to connect the Baltic States to the rest of the EU.  One is a power bridge between Estonia and Finland, which has already started and will connect our countries to the Nordic energy grid. The other bridge should connect Lithuania and the other Baltic States to Poland and Central Europe. Our recent contacts with the new Polish Government have raised new hopes that the Lithuanian-Polish Power Bridge project will gather momentum in the near future.

The latest proposal by Ukraine’s Prime Minister Yanukovich to extend the planned Odessa-Brody-Plock oil pipeline to Lithuania opens up new opportunities to our integration into the European pipeline system.  These integration efforts were largely ignored by the Russian-German deal to build a gas pipe under the Baltic Sea waters. The Odessa-Brody-Plock project bears a strategic importance to the whole EU as it provides an alternative access to the Caspian oil fields. We expect that this project will receive full support from the European Union and the other interested parties.

The lack of infrastructure is not the only reason limiting Lithuania’s access to alternative energy fields. We also suffer from the lack of will in some transit countries to ensure free and safe transit. In some cases, pipelines are even used as political instruments. The solution to this problem lies, perhaps, not so much in ‘enhanced’ or ‘privileged’ dialogues with transit countries but in their transformation into free market democracies, where politics and commerce are strictly separated.  Europe and the broader transatlantic community need a clear and focused policy, based on democratic values and free market principles, to achieve this goal.

Russia is a historical, and now a geographical, neighbor of Lithuania. Throughout centuries our relations have seen ups and downs, which now form the foundation of our relations. We seek to share our experience of cooperation with Russia with our European and transatlantic partners, using for this purpose not only our membership of the EU and NATO, but also concrete examples of bilateral and multilateral cooperation. Lithuania’s role in maintaining transit between Russia and Kaliningrad is just a case in point.

I have no doubt that Russia is a European nation. It is our shared interest that Russia smoothly integrates into the European community, which is firmly committed to the elimination of conflicts on the European continent. However, the growing tension on Russia’s European borders raises the question as to whither Russia under its current leadership is actually going. Perhaps, the Russian people and the Russian administration should be more clearly separated in our policies towards Russia.

We should make our point to the Russian society that Europe and democracy is not a threat. Europe wants to embrace the Russian people and is open to further cooperation. Our will has been demonstrated on many occasions, including the transit to Kaliningrad. We should continue this policy by facilitating people-to-people contacts, business cooperation and academic exchange.   

Meanwhile, we should not fear asking the Russian administration what they have done to embrace Europe.  When will Russia be prepared to join the WTO? When will she ratify the European Energy Charter and its Transit Protocol?  When will she withdraw, as promised, her troops from Moldova and Georgia and conclude border treaties with neighbors?  Those who prefer to withhold from such questions, in fact write Russia off as a European nation. From this perspective, I believe that Lithuania is one of the most sincere friends of Russia.

Ladies and gentlemen,

Europe can make its voice better heard if it raises difficult questions in cooperation with America. During enlargement, European and transatlantic policies were going firmly hand in hand. This success repeated itself in Ukraine during the Orange Revolution. I believe that our cooperation, which evolved in our relations vis-à-vis Belarus, will also continue and produce concrete results. Russia should be no exception, only the scope of the challenge, given the diversity of our interests, will be much bigger.

However, I still ask myself whether the transatlantic community is well fit to meet new challenges. Yes, we have NATO providing us with collective instruments of dialogue and action. In the EU, we have regular meetings in the 25+1 format. The EU is also America’s key ally in coping with such security challenges as Iran’s nuclear ambitions. Lithuania, too, maintains a very active partnership with the U.S., which is helping us both to address the most persisting security issues in the region and beyond.

But beneath this surface, the momentum of cooperation goes down. Every minute which is spent in the U.S. consular office waiting for an American can be spent at developing U.S.-Lithuanian relations, but is not. Every dollar spent on acquiring an American visa can be spent otherwise – for example, investing in security and stability in our neighborhood. I am not surprised that under such circumstances people so easily buy theories which are not true.     Like the one telling that Americans come from Mars and Europeans come from Venus.

We should bring down these barriers as quickly as possible. Time to start thinking, in practice, of ourselves as one community and one civilization. We welcome the Visa Waver Program, which was developed by the U.S. administration for the new members of the EU, and hope that it will only accelerate the establishment of visa free travel between our countries.

Ladies and gentlemen,

In conclusion, I would like to get back to the question from which I started: What is my purpose of being here? If now you already have an answer to this question, as I do, I guess that this exercise has been a success. I hope that now you better understand the role and the place of such nations like Lithuania in European and global politics. And I thank you for this understanding.

Yet, I believe that the limits of my purpose of being here are not yet exhausted.  So I look forward to the possibility to answer your other questions about Lithuania, the European Union, and transatlantic relations.

Thank you.