President of Turkmenistan Gurbanguly Berdimuhamedov's statement at the International High-Level Conference titled "Reliable and Stable Transit of Energy and its Role in Maintaining Sustainable Development and International Cooperation"
Dear conference participants,
Ladies and Gentlemen,
Together with you I would like to look at the issues of the reliability and stability of international energy supplies in the world and share with you our approaches and proposals to address this urgent problem.
Ensuring reliability and stability of international energy supplies has now come to the forefront of the global agenda. In recent years, due to the financial and economic crisis and well-known events in a number of states, they have become critical and turned from an economic issue into the political one directly affecting the interests of the majority of countries.
These issues now affect the progress of the social and economic development of countries, the standards and quality of life of people, prospects of the successful accomplishment by the world community of the millennium goals on sustainable development.
Today, it is hard to imagine any sphere of contemporary life without energy, independent to a certain degree from access to energy resources and means of their delivery. The global development trends in the XXI century and emergence of new world economic centers require steady growth in energy consumption, expansion of geography of their use and increasing the capacity of markets. They are objective processes, and their adequate understanding and perception can open new opportunities for the utilization of the planet's energy potential to the benefit of the entire humankind and become the pledge of successful international cooperation in this sphere.
To date, fossil fuel makes up 85 per cent of the world energy consumption. Despite comprehensive researches aimed at finding alternative kinds of fuel, hydrocarbons - oil and natural gas - will remain the main resource of energy supply for the world economy in the foreseeable future.
In these conditions supplies of hydrocarbons to international markets acquire priority importance. They increasingly influence the overall situation in the world, the nature and direction of the regional and international cooperation, the degree of involvement of these or other states in the global development processes. The issue of energy supplies has thus grown into the global issue and therefore needs to be addressed from the wider perspective and in a proper way. Guided by this point of view, Turkmenistan put forward an initiative for the United Nations to create a framework to start broad international discussions of the energy supply issue. As is known, our proposal was supported by the UN General Assembly that unanimously adopted a resolution to this effect. Availing myself of this opportunity, I would like to express appreciation to all member states and the UN Secretariat for the cooperation during the drafting and adoption of this resolution, understanding and support.
Of course, our initiative did not emerge spontaneously.
It was a product of thorough and objective analysis of the general situation in the world, influence of different factors, including energy ones, assessment of prospects of international interaction in fulfillment of common development goals, Turkmenistan's role and place in it as a major supplier and producer of energy and a state that together with others shares responsibility of the fate of the humankind. Having put forward this initiative, we were guided by the contemporary international relations as a progressive process aimed at looking for constructive solutions and the ability of subjects of these relations to go beyond the frames of narrow practicality, momentary benefits and take a broader look at the problem in the context of universal trends.
While developing our approaches, Turkmenistan focuses on lasting stability and security as a key factor. At the same time, we proceed from the integrity and indivisibility of the notion of security both in the geopolitical sense and from the point of view of interrelationship of its specific aspects. We are convinced that security of one country cannot be ensured without ensuring security in the region, continent and world.
Similarly, the political or defensive security will not be lasting and full if there is no economic, energy and food security, no prevention and mitigation of risks and threats of ecological and man-caused nature, no effective counteraction to international terrorism, organized crime, spread of weapons of mass destruction and other global challenges.
From this point of view the current system of energy supplies is one of the most vulnerable links of the global economy. We should admit to this. Such vulnerability is caused by a number of factors - political instability, absence of generally recognized regulative international legal mechanisms, imperfection of infrastructure, and narrowness of geography of pipeline routes. All this leaves a mark on the general atmosphere in the global energy market. To change this situation, to overcome the inertia of stereotypes, to reach the new level of thinking in line with contemporary requirements are the objective necessity.
Today, we are not talking about the adoption of preventive measures, local agreements on certain aspects of energy transportation. We are talking about the creation of a fundamentally new, universal model of relations in the world energy space. It should be a model based on the multilateral balance of interests, common views and visions of the global architecture of energy security, understanding of the long-term benefits and advantages of cooperation.
As a first step in this direction, starting broad international discussion of energy supply issues is logical. We should compare our positions, find out common interests, identify baselines and develop a general language that the dialog will be carried out in. In other words, we need to lay the ground for concrete and lively interaction. To this end, having received the mandate of the United Nations, Turkmenistan proposed to host the International Conference "Reliable and Stable Transit of Energy and its Role in Maintaining Sustainable Development and International Cooperation". The name of the conference carries positive meaning and we hope it will determine the course of its work.
I take the Ashgabat meeting as a starting point of the forward movement, of the establishment of cooperation and mutual understanding.
Dear the Conference participants,
Ladies and Gentlemen,
Diversification of routes is the most important component of ensuring the reliability and stability of the international energy supply system. In the conditions of the permanently growing demand for energy in different parts of the world the aspiration of major producers to build up their potential, create manifold, modern and effectively functioning infrastructure of their transit and delivery to consumers is logical and natural. Depending on the available resource and peculiarities of geographic location, producer countries look for new markets and, accordingly, the shortest and convenient routes to them.
It is a normal and absolutely justified position for any energy producer country wishing to maintain its economic and energy security and asserting its national interests with responsibility. Turkmenistan belongs to this category of states, and throughout its modern history Turkmenistan has never provided a ground to doubt it. The energy security has been the cornerstone of the foreign economic strategy of our country. It defines its essence, content and direction.
Alternative routes are more than simply a profitable commercial project. In the current conditions, it is the diversification of energy flows and inclusion of new countries and regions into the geography of routes that can make the global economy sustainable and protect it from faults and deformations, and, on the basis of sound competition, provide for the balance of interests of all participants in the international energy market - producers, transit countries and consumers.
The growing energy consuming capacity of the world economy, overall change of the political landscape, nature and content of the global challenges and threats are the factors that objectively stimulate the search for new configurations, schemes and models to implement energy supply projects via alternative routes. Choosing one of them is a sovereign right of participants of one or another specific project.
The issue of the sovereign right of choosing the energy supply routes is directly connected with the forming of prices for them. Due to a number of serious objective reasons, the ideas of creating international structures of natural gas producing countries in the form of supranational regulators, including pricing, produce no results. In this context, direct agreements between the seller and buyer are the only efficient way of price formation for natural gas. It is logical that the producer country sets up the price based on the prime cost of gas production that differs depending on the climatic conditions, depth of hydrocarbon beds, and ways of extraction and exploitation of fields.
In the framework of concrete agreements with a consumer Turkmenistan sets up the price for natural gas taking into account the criteria of production costs, trends of price formation in the world market. Such approach to the price formation appears to be fair.
In this context, I would like to stress that the attempts to politicize the problem of energy supplies, use them as an instrument of achieving political goals or satisfying some corporate interests do not meet the current global development logic and needs. As the practice shows, in such cases the long-term losses inevitably become considerably larger than benefits gained. The time requires a different approach based on the consideration of interests of all energy market participants, reasonable compromises and coordinated principles enabling us to secure energy supplies from various risks. Apparently, efforts of one country or event group of countries are not enough to achieve these goals. The whole world community including states, international organizations, financial centers, companies operating in the energy market need to unite their efforts.
I think we need to call on the relevant UN structures to consider the issue of creating an expert group that would deal with designing relevant international legal norms regulating relations in the energy sphere. Such work is appropriate to be handled under the aegis of the United Nations which is a universal global organization set to provide political guarantees and legal framework of the security system, stability and reliability of energy transportation to the international markets, and has wealth of experience in developing documents of such level. Certainly, we understand that the creation of universal legal norms in the energy sphere is not a matter of one day. In the course of this work many juridical, financial and technical issues will have to be addressed. However, we have to take into account the fact that in contemporary conditions the reliability of energy supplies, first of all via pipelines, is one of the main guarantees of the global economic stability and the most important factor of progress and wellbeing of regions and continents.
In this context, the interrelations among producers, transit countries and consumers are critical. The expansion of the energy markets geography increases the role of transit deliveries in the global energy space. It is the transit flows that provide powerful impetus for the development of regional and interregional links, stimulate business activity in the related fields and give interstate political and economic cooperation additional sustainability.
It puts special responsibility on the participants of transit deliveries, requires strict implementation of obligations by each of them, respect for each other's interests, readiness for constructive discussion of emerging issues on the principles of mutual respect, equality and openness. I'm convinced that all parties - producers, transit countries and consumers - will be the winners, and the relations among them will reach the level of true partnership and cooperation.
In all, formulating the priorities of its international cooperation, Turkmenistan proceeds from understanding of inseparability of long-term national interests and development objective with the global processes.
It fully refers to Turkmenistan's foreign economic activity and its most important component - fuel and energy complex.
Our country has been consistently pursuing the "open doors" policy and created favorable conditions for the successful operations of our numerous partners in Turkmenistan. Major foreign companies successfully operate in this sector. The cooperation with them opened real opportunities for the successful implementation of a number of large-scale projects. Based on the clearly defined principles of state strategy in this issue, objective assessment of the domestic resource potential and capabilities of its use, Turkmenistan has not opted for replacing one energy supplies with others, not changing the geography of their routes. It has opted for extending and complementing them with new outlets to promising markets. First of all, we are talking about the considerable build up of natural gas deliveries to various states and regions of the world.
In this context, we regard our resource potential and advantages of the geographic location as the factors that positively influence the development of regional and interregional economic cooperation, an important condition for preserving the balance of interests in Eurasia on the basis of equal and equitable access of partners to the Turkmen hydrocarbons and means of their delivery. Economic and commercial viability, compliance with the modern environmental and technological requirements, strong political and legal mechanisms of the reliability and stability of supplies are the main criteria in this respect. This is our position that we will follow in the future.
The contemporary processes and trends in the world economy become more complicated. Their geopolitical and economic direction is changing, new configurations of interrelations and interests are emerging, and the number of states involved in the sphere of energy supplies is growing.
As a matter of fact, a big block of issues requiring from the world community to focus on working out adequate political and legal instruments to address them is emerging in the system of global relations. We are talking about a particular sphere in international relations called "energy diplomacy". As in the traditional diplomacy, prudence of words and deeds, respect for partners, aspiration for mutually acceptable solutions and commitment to the constructive dialogue should be inherent in the energy diplomacy. We were guided by these criteria when we established a group on energy diplomacy of Turkmenistan. This group is charged with a number of important functions centered one main task - to promote our country's close international cooperation in the energy sphere, strengthen partnership relations and increase the level of trust and mutual understanding. Perhaps, there is a special meaning in the fact that the energy diplomacy group held its first meeting on the eve of this conference that gathered representatives of dozens of countries, major international organizations, financial institutions, companies that understand the importance of issues raised and common aspiration to find proper solutions to them.
Dear conference participants,
Ladies and Gentlemen,
Let this forum become a good start for the future multidimensional and joint work on creation of the effective model of cooperation meeting the vital interests of our peoples and states, global aims of progress and development in the XXI century.
I congratulate you on the opening of the conference and wish you success.
(Ashgabat, April 23, 2009)