Viewing cable 09STATE38591
Title: ACTION REQUEST: DEMARCHE ON BALTIC ENERGY SECURITY

IdentifierCreatedReleasedClassificationOrigin
09STATE385912009-04-17 21:34:00 2011-08-30 01:44:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Secretary of State
VZCZCXRO3184
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHPOD RUEHROV RUEHSR
DE RUEHC #8591/01 1072153
ZNR UUUUU ZZH
P 172134Z APR 09
FM SECSTATE WASHDC
TO RUEHHE/AMEMBASSY HELSINKI PRIORITY 1669
RUEHRA/AMEMBASSY RIGA PRIORITY 1284
RUEHSM/AMEMBASSY STOCKHOLM PRIORITY 7129
RUEHTL/AMEMBASSY TALLINN PRIORITY 7114
RUEHVL/AMEMBASSY VILNIUS PRIORITY 2007
RUEHWR/AMEMBASSY WARSAW PRIORITY 3632
INFO EU INTEREST COLLECTIVE PRIORITY
EU MEMBER STATES COLLECTIVE PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY
UNCLAS SECTION 01 OF 03 STATE 038591 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON ENRG LG LH PL RS SW FI
SUBJECT: ACTION REQUEST: DEMARCHE ON BALTIC ENERGY SECURITY 
 
REF: A. A) 08 STATE 106338 
     ¶B. B) USEU 311 
     ¶C. C) RIGA 164 
 
SUMMARY 
-------- 
 
¶1.  (SBU) The Prime Ministers and Energy Ministers of 
Estonia, Latvia and Lithuania will meet in Vilnius on April 
26-27 to discuss energy security; Poland, Sweden and 
Finland will be represented at lower levels, as will CEOs 
of several Baltic energy companies.  The United States 
supports and has consistently advocated for regional 
efforts among the Baltic countries to improve their energy 
security.  Addressee posts -- including Embassies 
Stockholm, Helsinki and Warsaw -- should draw on the points 
in paragraph 6 to emphasize prior to the April 26-27 summit 
strong U.S. support for regional cooperation to enhance 
Baltic energy security, and the importance of moving beyond 
discussion and on to the actual implementation of 
cooperative energy projects. 
 
BACKGROUND 
---------- 
 
¶2.  (SBU) Isolated from EU electrical markets and dependent 
on imported gas from Russia, the Baltic States can be 
characterized as "energy islands."  Baltic dependence on 
Russian electricity will increase when the Ignalina nuclear 
power plant is decommissioned at the end of 2009 and 
Estonia's oil shale industry is subjected to costly 
EU-imposed environmental upgrades by 2016.  Given 
historically tense political relationships with Russia, the 
Baltic States view energy dependence as a threat both to 
sovereignty and European integration. 
 
¶3. (SBU) The Baltic States and Poland have sought to 
diversify their energy sources and increase connectivity of 
electrical grids with each other, their Nordic neighbors, 
and other EU Member States.  While some progress has been 
made, domestic interests in each of the countries has 
complicated cooperation and undermined regional energy 
security.  For example, delays in reaching an accord with 
Lithuania on a replacement nuclear power plant are driving 
Poland and Estonia to examine their own nuclear 
alternatives, and the inability of Latvia and Lithuania to 
agree on a terminus for a power connection to Sweden has 
delayed this much-needed connection.  The relatively low 
cost of the electricity the Baltic states receive from the 
Northwest Russia grid has contributed to the inertia, 
notwithstanding long-term concerns about over-dependence on 
Russian energy. 
 
¶4.  (SBU) Given the small size of the three Baltic markets, 
close cooperation among them will be key to the success of 
any strategy to enhance energy security.  The EU also could 
ameliorate the situation by providing the financial and 
technical support needed for Baltic energy integration and 
the development of additional energy sources.  Although the 
U.S. role is a subsidiary one, we believe that in the 
run-up to the summit, it is important that the U.S. 
reiterate our strong support for close cooperation among 
the Baltics and our conviction that now is the time to 
finalize agreements and move on to project implementation. 
 
TALKING POINTS 
-------------- 
 
¶5. (SBU) The Department requests Posts to draw on the 
background and points provided to communicate to host 
country officials U.S. views on Baltic energy security, 
prior to the April 26-27 summit, at the highest appropriate 
level.  Our overall objective is to reiterate strong USG 
support for close energy cooperation among the Baltic 
states and to encourage them to translate their extensive 
discussions into agreement and prompt implementation.  More 
specifically, we want to: (1) advocate the development of 
timelines to ensure that steady progress is made on the 
implementation of energy projects; (2) encourage the Baltic 
states, and other interested players such as Sweden and 
 
STATE 00038591  002 OF 003 
 
 
Finland, to work closely with the EU to fully integrate the 
Baltic states into the EU electrical grid; (3) promote a 
prompt agreement among the Baltic states and Poland on the 
construction of a nuclear power plant to replace Ignalina; 
and (4) encourage Latvia and Lithuania to quickly reach 
agreement on the location of the Swedlink terminus so that 
construction can commence. 
 
¶6.  (SBU) BEGIN POINTS: 
 
-- We applaud the initiative of the Prime Ministers of the 
Baltic States to form a Working Group to intensify energy 
cooperation with each other, and with key partners such as 
Poland, Sweden and Finland. 
 
-- Like you, we see energy security as a major challenge 
facing the Baltic republics and many other European states 
in the years ahead, one that has profound economic and 
national security implications.  We believe that close 
cooperation among the three Baltic states is the likeliest 
path to greater energy security. 
 
-- We encourage the establishment of a clear timeline for 
final decisions and the implementation of projects under 
consideration.  A timeline will help key players to measure 
progress and coordinate further implementation. 
 
-- We believe the EU can play a leading role in providing 
the financial and technical support needed to consummate 
the projects under consideration and we strongly support 
the work of the EU's High Level Group on Baltic energy.  We 
encourage all three Baltic republics to engage proactively 
with the EU to help shape EU energy policy and its 
prioritization of projects to increase the number of Baltic 
interconnections and grid redundancy. 
 
-- With the impending closure of Ignalina, it is 
particularly important that outstanding issues surrounding 
the construction of a replacement nuclear plant at 
Visaginas be promptly resolved.  While a regional reactor 
would have many advantages, we also understand Estonia's 
interest in pursuing the option of its own grid-appropriate 
nuclear reactor.  We are prepared to move forward as soon 
as practicable to organize the long-delayed TDA-sponsored 
Orientation Visit to familiarize the partners with U.S. 
nuclear technologies and financing options. 
 
-- Other forms of cooperation among the Baltic states -- 
such as a regional LNG terminal -- would also reduce 
dependence on Russian gas. 
 
-- For Vilnius and Riga:  We encourage you to come to a 
final decision on the Swedlink project.  We do not have a 
view as to where the Baltic terminus for Swedlink should be 
located.  Regardless of where the terminus is located, the 
entire Baltic region stands to gain from its completion. 
 
-- For Tallinn, Riga and Vilnius:  Given the small size of 
the three Baltic energy markets, greater market openness 
will help ensure that the benefits of the energy projects 
under consideration are fully realized.  We encourage you 
to take concrete steps to open your energy markets to each 
other. 
 
-- For Tallinn:  We applaud the efforts Estonia has made to 
address both its own energy security needs and the pressing 
environmental problems created by your current singular 
dependence on oil shale.  U.S. technologies, in nuclear and 
other alternate energy sectors, fit well with this 
strategy.  They provide cutting edge solutions that meet 
both energy supply needs and Estonia's goal to reduce 
carbon emissions.  We look forward to working with you to 
promote U.S.-Estonia commercial cooperation.  We note that 
you are working with our Department of Energy on an Oil 
Shale Technology MOU. We anticipate this cooperation will 
yield new ways to reduce dependence on oil shale while 
cutting CO2 emissions from residual oil shale electricity 
production. 
 
 -- For Stockholm and Helsinki:  We believe that with your 
sophisticated energy infrastructures, geographic proximity 
to the Baltic states, and considerable experience in the 
EU, your governments have an indispensable role to play in 
the process of ensuring EU engagement and in spurring the 
 
STATE 00038591  003 OF 003 
 
 
Baltic states to agreement and implementation.  We believe 
you can also play a positive role in encouraging the Baltic 
states to achieve greater openness in their energy markets, 
which will reduce their dependence on any single source of 
energy.   Please let us know when you perceive 
opportunities for us to contribute to the objective of 
enhancing the energy security of the Baltic states. 
 
¶7.  (U) Please report responses by April 24, slugging 
responses for EUR/NB - Alan Meltzer and EUR/ERA - Erin 
McConaha. 
CLINTON