Murphy Discusses Need for the U.S. to Do More to Support Energy Independence in Europe

WASHINGTON-U.S. Senator Chris Murphy (D-Conn.)spoke on Thursday at a U.S. Senate Foreign Relations Subcommittee hearing on America's role in supporting Europe's energy diversification agenda with Amos Hochstein, Senior Advisor for Energy Security at the U.S. Department of State.

Murphy highlighted the importance of investing in energy security assistance: "Note that we just passed $40 billion in assistance for Ukraine, and nowhere in that package were hard dollars to try to help our friends and allies in Europe become energy independent. And that remains very strange to me that we spend billions of dollars on our Russia and Ukraine policy, and yet we don't seem to put real hard dollars into the projects that are necessary to break these countries free from Russian dependence.

Murphy continued:"Senator Shaheen and I were in Serbia about a month ago, and they were talking about a project - a small project - to lessen than their dependence on Russian gas in which their shortfall was $20 million. And there wasn't a clean way for the United States to make that up. $20 million is a drop in the bucket when it comes to the amount of money that we are sending into the fight in Ukraine."

During today's U.S. Senate Foreign Relations Committee business meeting, Murphy's amendment calling out Russia's efforts to undermine transatlantic security by cutting off natural gas exports to Finland and other European allies and partners was included as part of S. Res. 646, a resolution supporting Finland and Sweden's expedited membership in the North Atlantic Treaty Organization (NATO).

Murphy also discussed Saudi Arabia's role in the energy crisis:"I will just say: I have been incredibly unimpressed by the commitments that they have made. I think there's great doubt as to whether it will actually move the needle on global pricing. And I also note at the same time that they're increasing production, they're also increasing their official selling price for refiners in top destinations in Asia and Europe, signaling that they are still very much looking to use this crisis as a means to increase their profit taking. So I think we have a lot more work to do on that front."

You can read Murphy's full exchange with Hochstein:

MURPHY: "Thank you very much, Senator Shaheen, for convening this important hearing.

"It's good to see you. You are a truly indispensable person in our fight to try to make sure that Russia pays a price for their aggression and that we move Europe forward on a path towards energy independence. So thank you for everything you're doing.

"I'm not going to ask you a question about Saudi Arabia, but I know that you are deeply involved in the effort to try to unlock additional resources from our Gulf partners. I will just say: I have been incredibly unimpressed by the commitments that they have made. I think there's great doubt as to whether it will actually move the needle on global pricing. And I also note at the same time that they're increasing production, they're also increasing their official selling price for refiners in top destinations in Asia and Europe, signaling that they are still very much looking to use this crisis as a means to increase their profit taking. So I think we have a lot more work to do on that front.

"I do want to stick to the topic at hand, though, and talk about what capacities we have to try to help our friends in Europe. Note that we just passed $40 billion in assistance for Ukraine, and nowhere in that package were hard dollars to try to help our friends and allies in Europe become energy independent. And that remains very strange to me that we spend billions of dollars on our Russia and Ukraine policy, and yet we don't seem to put real hard dollars into the projects that are necessary to break these countries free from Russian dependence.

"Senator Shaheen and I were in Serbia about a month ago, and they were talking about a project - a small project - to lessen than their dependence on Russian gas in which their shortfall was $20 million. And there wasn't a clean way for the United States to make that up. $20 million is a drop in the bucket when it comes to the amount of money that we are sending into the fight in Ukraine.

"You and I have had this discussion, but just for the record: Shouldn't we as the legislative body be thinking about giving the administration additional tools with which to use on the European continent to try to help some of these energy independence projects that sometimes have trouble getting funded through European or private channels?

HOCHSTEIN: "Senator, yes. I fully agree.

"I'm not in a position to tell the legislative branch what to do, but I think that it is sometimes staggering how small the number is from what would actually make an impact. And as we look at - and I don't want to only focus on the gas side, because you're right: When it comes to Bulgaria and Serbia, the total demand is three BCM a year. That's it. And we can see a government in Bulgaria that falls literally on the concerns for gas sales from gas pump cut off, where really small numbers would have helped us to be able to do that.

"That doesn't necessarily mean that the U.S. taxpayer should pay for gas in Bulgaria. That's not anyone suggesting that. But if financing for some facilities that could help them do that - the way that we've done with Ukraine in 2014 to Romania, Czech Republic, and some others, [like] Poland, [countries that] would like to expand their nuclear power SMRs which were supporting American technologies of SMR that can be deployed far faster for less money but need support on the financing side - those are things that we can do. Getting routing [and] changing around some of the routes from Central Asia and other places around the Middle East med. could benefit from our support as well. So there are things that we can do if we had the resources and the authorities to do that through the DFC and others."

MURPHY: "So I think it's simply extraordinary what you and your team have been able to do.

"You mentioned Bulgaria. Behind the scenes, we have - I think - provided substantial help and assistance to Bulgaria to try to manage this energy crisis. I just argue that there are more capacity and more tools we can give you. Senator Johnson and I have written and passed legislation increasing DFC's capabilities, but we can do more.

"Can you just give a word - my time is up - but can you just give a word on India? Obviously, we've seen this dramatic increase in exports to India. They're a critical partner.

"What [does] the future look like of the Russia-India energy relationship and what can we be doing together to try to talk to our friends in India about the consequences of continuing to ramp up their dependence?"

HOCHSTEIN: "So obviously, the relationship with India is really critical from energy, strategically in the region, [and] for a variety of reasons, and energy is just one of them.

"In my conversations with them, I've said look, we don't have secondary sanctions and we can't ban your purchases. But as you base your purchases from Russia, I would ask two things.

"One, don't go too far, and don't look like you're taking advantage of the pain that has been felt in European households and in the United States.

"Second, make sure you negotiate well because, if you don't buy it, nobody else is. So you have an advantage here.

"It's a very difficult conversation because the Indian economy is so dependent on these imports and their inflation is worse than ours. And as such a big importer compared to the U.S. being a producer, [inflation] hits them a lot harder than it hits us. So it's a balance.

"I think there is a ceiling to what they will take and how much they will increase further, but we'll have to see as we go."

MURPHY: "And I think it's a policy question for this committee and for this Congress as to whether this has an effect on our growing enthusiasm for the U.S.-India relationship and our willingness to look the other way as they have more deeply integrated themselves with both Russian energy sources and Russian military equipment."

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