Ukraine crisis: Kerry says energy should not be used as a weapon

Ukraine crisis: Kerry says energy should not be used as a weapon
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Wednesday, April 2, 2014 - 7:19am

Energy supplies must not be used as a political weapon, U.S. Secretary of State John Kerry said Wednesday at an EU-U.S. energy summit dominated by the simmering crisis in Ukraine.

His remarks in Brussels, Belgium, came 24 hours after Russian energy giant Gazprom announced a hefty increase in the price of natural gas it supplies to Ukraine.

Kerry, who spoke flanked by EU foreign policy chief Catherine Ashton, said the European Union and United States were taking "important steps" to make it harder for one state to hold another hostage to energy supplies.

"No nation should use energy to stymie a people's aspirations," said Kerry, co-chairman of the EU-U.S. Energy Council. "We cannot allow it to be used as a political weapon or an instrument of aggression."

Europe and the United States are working together to reduce Ukraine's reliance on Russian energy by developing alternative sources for natural gas, he said.

"We're working in lockstep to help Ukraine bring natural gas in from Poland and Hungary and develop a route through Slovakia," he said, adding that the United States also hopes to export more natural gas in the future.

At the same time, Kerry said, Ukraine has committed to work on reducing consumer subsidies to make its energy market more efficient.

The International Monetary Fund last week agreed to lend Ukraine up to $18 billion over the next two years in return for a package of reforms, including to its energy market.

In the United States, the House of Representatives gave final congressional approval Tuesday to legislation that would provide $1 billion in loan guarantees to Ukraine, as well as imposing sanctions on Russia over its actions in Ukraine. President Barack Obama is expected to sign the bill.

"Developments in Ukraine have brought energy security concerns to the fore and prove the need to reinforce energy security in Europe," said a joint statement issued by the EU-U.S. Energy Council.

The statement also "underscored that energy relations with Russia must be based on reciprocity, transparency, fairness, non-discrimination, openness to competition and continued cooperation to ensure a level playing field for the safe and secure supply of energy."

After the meeting, Kerry joined NATO foreign ministers for a second day of discussions focused on the crisis sparked by Russia's annexation of Ukraine's Crimea region.

The U.S. secretary of state spoke with his German counterpart, Frank-Walter Steinmeier, as well as Norway's Borge Brende, Poland's Radoslaw Sikorski and British Foreign Secretary William Hague.

Kerry: Russia's action is a 'wake-up call'

The Brussels meeting is the first for foreign ministers from the 28-member bloc since Russia grabbed the Black Sea peninsula from Ukraine last month, triggering the worst East-West crisis since the Cold War.

On Tuesday, NATO said that it would suspend "all practical civilian and military cooperation" with Russia because of its actions in Ukraine, and that it had seen no sign that Moscow is withdrawing some of its troops from the eastern Ukrainian border, as it has claimed.

Gen. Philip Breedlove, head of the U.S. European Command and military chief of NATO, said in a media interview that Russia had the forces it needed near the border to carry out an incursion into Ukraine, a NATO military official confirmed.

Breedlove also said that Russia could "roll across the country in three to five days if it wanted to," the official said.

After Tuesday's session, Kerry said Russia had challenged truths that only a few weeks ago seemed self-evident: that European borders in the 21st century would not be redrawn by force.

"It is important for everybody in the world to understand that the NATO alliance takes seriously this attempt to change borders by use of force," he said. "So that is the wake-up call."

Russia's aggression "is the gravest threat to European security in a generation, and it challenges our vision of a Europe whole, free and at peace," NATO Secretary General Anders Fogh Rasmussen told reporters.

He also stressed that NATO wants to find a diplomatic solution to the crisis.

In a joint statement announcing the suspension of cooperation, the ministers said political dialogue in the NATO-Russia Council could continue, "as necessary, at the ambassadorial level and above, to allow us to exchange views, first and foremost on this crisis."

They said they would review NATO's relations with Russia at their next meeting in June.

Gas price hike

After the increase in gas prices reported by Russian state media Tuesday, Ukraine will pay $385.50 per 1,000 cubic meters of gas, up from the previous rate of $268.50.

The move, which went into effect Tuesday, ends a discount that was agreed to before Ukraine's pro-Moscow President Viktor Yanukovych was ousted after months of street protests.

Ukraine also owes $1.7 billion in unpaid natural gas bills, Gazprom chief executive Alexei Miller was quoted as saying by the state-run RIA Novosti news agency.

In a move that may add to Ukraine's financial woes, Russian President Vladimir Putin signed a bill Wednesday terminating Russian agreements with Ukraine over the lease of its Black Sea naval base in Crimea, RIA Novosti reported.

Russia paid the Ukrainian government $530 million annually for use of the Sevastopol base, and it wrote off nearly $100 million of Kiev's debt for the right to use Ukrainian waters, according to the news agency. This deal will now come to an end.

Also terminated was an agreement under which Russia gave Ukraine a $100 discount on natural gas, RIA Novosti said. This means that the price Ukraine pays is expected to rise to $485.50 per 1,000 cubic meters of gas once the Russian government issues an official resolution, it said.

Journalist Susannah Palk reported from Brussels and CNN's Laura Smith-Spark wrote and reported in London. CNN's Jonathan Helman contributed to this report. 

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