U.S., Russia Move Forward With Oil Spill Accord

ST. PETERSBURG, Russia, September 22, 2003 (ENS) - Russian fossil fuel development and and oil spill prevention were front and center today as U.S. Energy Secretary Spencer Abraham and Commerce Secretary Don Evans joined Russian Minister of Energy Igor Yusufov and Minister of Economic Development and Trade German Gref in opening the second U.S.-Russia Commercial Energy Summit in St. Petersburg. The first summit was held in Houston, Texas in 2002.

The meetings provide a forum where U.S. and Russian energy sector representatives can work together to solve common problems, develop projects of mutual benefit, and create improvements in such areas as electricity reform, energy efficiency and alternative energy sources.

Russian Energy Minister Igor Yusufov (Photo courtesy Norwegian Petroleum Directorate)

The idea for a new pipeline and deepwater tanker terminal, designed to carry crude oil from Russia's West Siberian Basin and Timan Pechora basin westward to Murmansk on the Barents Sea, was first suggested during a summit in May 2002 between Presidents George W. Bush and Vladimir Putin. A consortium of Russia's leading oil companies currently is conducting feasibility studies, and expects that initial transit could begin as early as 2007.

A liquefied natural gas (LNG) facility at the port has also been suggested, possibly allowing for deliveries to American markets.

Summit participants also will discuss large Russian LNG projects capable of shipping large amounts of the gas to the United States. These topics are elements of Russia's energy infrastructure development that could include significant roles for U.S. companies.

Today Secretary Abraham and Energy Minister Yusufov held a meeting to implement an oil spill prevention and response agreement the two countries have developed over the past year. The two signed the oil spill response protocol in March. Today's action formalizes the arrangement, and implements the plan.

The original proposal was developed at Yusufov's request and recommended extensive mutual assistance from both countries in the areas of technology, logistics, training, regulatory issues and exchange programs.

The agreement advances the concept that both nations are committed to environmentally sustainable development and transport of oil.

U.S. Energy Secretary Spencer Abraham (Photo courtesy Office of the Secretary)

Under the accord, U.S. and Russian experts will expand the framework for bilateral cooperation outlined in the U.S.-Russia Energy Working Group, and will specifically address the environmental risks associated with oil production and transportation.

The Russian Federation says it has already developed oil spill contingency plans for each of its regions, and has worked closely with local government officials on plans to cover marine bodies from the Black and Caspian Seas to the Barents and Pacific coast.

U.S. officials say the United States has developed similar response plans, employing new technologies to clean up oil spills. They add that the United States continues to update and improve technologies to prevent oil spills in the first place.

The agreement calls for the nations to share ideas, information, technologies and methods in support of helping each other increase the effectiveness of their oil spill regulation, prevention and response.

"Presidents Bush and Putin agreed that there were certain common imperatives in our energy relationship - investment, market access, small and medium enterprise development and commercial partnerships," Secretary Abraham said. "The summits have enabled us to move forward in each of those areas and assist Russia as her role in the global energy market increases."

Russia’s economic growth over the last four years has been fueled primarily by energy exports, with a boom in Russian oil production and relatively high world oil prices during this period. In 2002, energy accounted for almost 20 percent of Russia’s Gross Domestic Product (GDP).

According to some analysts, says the U.S. Energy Information Administration (EIA), Russia could easily produce 10 million barrels of oil per day by the 2007-2010 period were it not for the country's insufficient infrastructure. Developing new connections to the outside world, while simultaneously re-organizing the country's domestic industry, will be key to securing sustainable economic expansion into the future, the EIA said.

On May 16, Russian President Vladimir Putin charged the country with doubling GDP within 10 years, and on May 22, the Russian government released its energy strategy to 2003-2020, which designates the energy sector as the engine of this growth.

Map showing possible pipeline routes from the Russian oil and gas fields to Murmansk. (Photo courtesy Energy Information Administration)