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Calendar No. 116
110th Congress Report
1st Session 110-54
ENERGY DIPLOMACY AND SECURITY ACT OF 2007
April 12, 2007.--Ordered to be printed
Mr. Biden, from the Committee on Foreign Relations,
submitted the following
R E P O R T
[To accompany S. 193]
The Committee on Foreign Relations, having had under
consideration a bill to increase cooperation on energy issues
between the United States Government and foreign governments
and entities in order to secure the strategic and economic
interests of the United States, and for other purposes, reports
favorably thereon and recommends that the bill do pass.
II. Committee and Legislative History................................3
III. Committee Action.................................................5
IV. Section-By-Section Analysis......................................5
V. Cost Estimate....................................................7
VI. Evaluation of Regulatory Impact..................................8
VII. Changes in Existing Law..........................................8
The Energy Diplomacy and Security Act of 2007 is intended
to increase United States diplomatic attention and capacity in
matters related to energy security. Through a series of
hearings noted in Section III of this report, the committee
established that the United States national security is
threatened by its current reliance on energy imports,
particularly oil, and this reliance is constraining foreign
policy options. ``No one who is honestly assessing the decline
of American leverage around the world due to our energy
dependence can fail to see that energy is the albatross of U.S.
national security,'' Senator Lugar said at The Brookings
Institution on March 13, 2006. At the March 30, 2006 hearing,
Senator Biden said, ``Our foreign policy has been distorted for
over half a century by our dependence on oil from parts of the
world with very different interests from our own.''
Energy issues are central to contemporary global politics.
Energy resources are more frequently being used for political
gain. Foreign governments directly control more than three-
quarters of the world's oil supplies, and an increasing number
of these governments are using their oil wealth to entrench
corruption and authoritarianism, fund anti-American demagogic
appeals, and support terrorism. By stunting development and
increasing poverty, high world oil prices contribute to
instability that can lead to internal civil strife and regional
conflict. Likewise, the unclean use of fossil fuels is a major
cause of global climate change, as confirmed by the most recent
Intergovernmental Panel on Climate Change (IPCC) report on
climate science. The most recent IPCC report on the effects of
global warming predicts population movements, disease, drought,
famine, and other events, which can threaten United States
The United States quest for energy security must include a
vigorous global diplomatic component. The geopolitics of energy
today require innovative international partnerships to blunt
the ability of producer states to use energy as a weapon, to
increase our own security of supply, and to reduce the
vulnerability of our economy to high oil prices.
S. 193 provides a framework to address the foreign policy
implications of energy. The bill calls on the administration to
invigorate existing bilateral energy partnerships and seek new
ones with key producing and consuming countries, with a special
emphasis on increasing the use of sustainable energy sources.
The bill bolsters the State Department's capability to
integrate energy security needs into our diplomatic activities.
Although our ambassadors and top diplomats are factoring energy
considerations into their work, responsibility for energy
diplomacy is fragmented between several different offices.
Despite the growing importance of energy to our overall
diplomatic efforts, there is no Senate-confirmed official in
the State Department (or even a deputy assistant secretary)
whose sole responsibility is energy. To ensure that the State
Department's energy diplomacy efforts have more robust
coordination, S. 193 would create a Coordinator for
International Energy Affairs within the Office of the Secretary
The bill also directs the administration to seek formal
agreements with India and China that commit those countries to
establish their own strategic petroleum reserves that are
coordinated with other consumer nations. Such a move would give
oil consuming nations more leverage and flexibility during
international oil supply disruptions and help stabilize world
oil markets. It also directs the President to seek ways to work
with other nations to increase energy emergency preparedness.
Finally, the bill calls on the administration to weave a more
reliable energy security fabric within our own hemisphere,
working more closely with Canada and Latin America on emergency
preparedness, conservation, sustainable energy, and energy
access for the poor.
II. Committee and Legislative History
A previous version of S. 193 was introduced in the 109th
Congress as S. 2435 by Senator Lugar on March 16, 2006. It was
cosponsored by Senators Craig, Biden, Byrd, Salazar, DeWine,
Dorgan, Lieberman, Snowe, Landrieu, Coleman, Harkin, Thune,
Hagel, Rockefeller, and Obama.
Energy security and its effects on United States foreign
policy was a priority issue for committee activities in the
109th Congress. The committee held the following full committee
On July 26, 2005, the committee held a hearing
entitled ``Energy Trends in China and India'' to
examine the implications for the United States of
economic development and growing energy needs in China
and India. Testimony was provided by E. Anthony Wayne,
Interim Under Secretary for Economic, Business and
Agricultural Affairs, Department of State; David K.
Garman, Under Secretary for Science and Environment,
Department of Energy; Mikkal Herberg, Director,
Globalization & Asian Energy Security Program, The
National Bureau of Asian Research; Randall G. Schriver,
Partner, Armitage International; and Sumit Ganguly,
Director, Indian Studies Program, Indiana University.
On November 16, 2005, the committee held a hearing
entitled ``High Costs of Crude: The New Currency of
Foreign Policy'' to examine the complexity of U.S.
reliance on imported energy sources, particularly oil.
Testimony was provided by James R. Schlesinger, Senior
Advisor, Lehman Brothers and R. James Woolsey, Vice
President, Booz Allen Hamilton.
The committee held three public hearings to examine
U.S. cooperation with India on civilian nuclear energy.
On November 2, 2005, the committee held a hearing
entitled ``U.S.-Indian Nuclear Energy Cooperation:
Security and Nonproliferation Implications.'' Testimony
was provided by R. Nicholas Burns, Under Secretary for
Political Affairs, Department of State; Robert G.
Joseph, Under Secretary for Arms Control and
International Security, Department of State; Ronald F.
Lehman, II, Director, Center for Global Security
Research, Lawrence Livermore National Laboratory;
Ashton B. Carter, Co-Director, Preventive Defense
Project, Belfer Center for Science & International
Affairs, Harvard University; Henry D. Sokolski,
Executive Director, Nonproliferation Policy Education
Center; and Michael Krepon, Co-Founder and President
Emeritus, Henry L. Stimson Center. On April 5, 2006,
the committee held a hearing entitled ``U.S.-India
Atomic Energy Cooperation: The Indian Separation Plan
and the Administration's Legislative Proposal.''
Testimony was provided by Secretary of State
Condoleezza Rice. On April 26, 2006, the committee held
a hearing entitled ``U.S.-India Atomic Energy
Cooperation: Strategic and Nonproliferation
Implications.'' Testimony was provided by William J.
Perry, Senior Fellow, Hoover Institution, Stanford
University; Robert L. Gallucci, Dean, Edmund A. Walsh
School of Foreign Service, Georgetown University;
Ashton B. Carter, Co-Director, Preventive Defense
Project, Belfer Center for Science & International
Affairs, Harvard University; Ashley J. Tellis, Senior
Associate, Carnegie Endowment for International Peace;
Ronald F. Lehman, II, Director, Center for Global
Security Research, Lawrence Livermore National
Laboratory; Robert J. Einhorn, Senior Adviser,
International Security Program, Center for Strategic
and International Studies, Gary Milhollin, Director,
Wisconsin Project on Nuclear Arms Control; and Stephen
P. Cohen, Senior Fellow, Foreign Policy Studies
Program, The Brookings Institution.
On March 30, 2006, the committee held a hearing
entitled ``The Hidden Cost of Oil'' to examine costs
attributable to U.S. oil consumption that are not
accounted for in the market price, with particular
emphasis on the costs of imported oil. Testimony was
provided by Milton R. Copulos, President, National
Defense Council Foundation; Hillard Huntington,
Executive Director, Stanford University Energy Modeling
Forum; and Gary W. Yohe, John E. Andrus Professor of
Economics, Wesleyan University.
On May 16, 2006, the committee held a hearing
entitled ``Energy Security and Oil Dependence'' to
examine strategies for reducing dependence on oil.
Testimony was provided by Vinod Khosla, Partner, Khosla
Ventures and Jason S. Grumet, Executive Director,
National Commission on Energy Policy.
On June 7, 2006, the committee held a hearing
entitled ``Oil Dependence and Economic Risk'' to
consider the consequences of dependence on oil imports
for U.S. economic prosperity, with particular attention
to the economic risks to the United States and other
global economies stemming from oil dependence, the
potential of natural events and the investment
decisions of oil-rich governments to destabilize the
market price of oil, and the connections between oil
price and GDP growth in oil import dependent countries.
Testimony was Alan C. Greenspan, President, Greenspan
On June 22, 2006, the committee held a hearing
entitled ``Energy Security in Latin America'' to
examine energy security and foreign policy implications
between the United States and Latin American countries.
Testimony was provided by Senator Larry E. Craig;
Senator Ken Salazar; Domingo Cavallo, Chairman and CEO
DFC Associates, LLC; Luis E. Giusti, Senior Adviser,
Center for Strategic and International Studies; Eduardo
Pereira de Carvalho, President, Brazilian Association
of Sugar Cane and Ethanol Producers; and David L.
Goldwyn, President, Goldwyn International Strategies,
LLC. Additional written testimony was submitted by Eric
Farnsworth, Vice President, Council of the Americas;
Stephan C. Johnson, Senior Policy Analyst for Latin
America, The Heritage Foundation; and Johanna
Mendelson-Forman, Senior Associate, Center for
Strategic and International Studies.
On June 29, 2006, the committee held a hearing
entitled ``Russia: Back to the Future?'' to examine
Russia's recent energy policies and political trends.
Testimony was provided by Stephen Sestanovich, Senior
Fellow for Russian and Eurasian Studies, Council on
Foreign Relations; Dmitri Trenin, Deputy Director and
Program Co-chair, Foreign and Security Policy, Moscow
Center, Carnegie Endowment for International Peace; and
Amy Myers Jaffe, Fellow in Energy Studies and Associate
Director, Rice University Energy Program.
In conjunction with a series of committee hearings
examining corruption and transparency issues related to
international financial institutions and multilateral
development banks, on July 12, 2006, the committee held
a hearing entitled ``Multilateral Development Banks:
Development Effectiveness of Infrastructure Projects''
to consider the role of development banks in
infrastructure projects, and the ability of those
projects to improve economic and social development.
Testimony was provided by Clay Lowery, Assistant
Secretary for International Affairs, Department of the
Treasury; Jaime Quijandria, Executive Director for
Argentina, Bolivia, Chile, Paraguay, Peru and Uruguay,
The World Bank; Carlos Herrera Descalzi, Vice-Dean,
National Engineers Association of Peru; Korinna Horta,
Senior Economist, Environmental Defense; and Manish
Bapna, Executive Director, Bank Information Center.
In conjunction with a series of committee hearings on
developments in Iran and United States policy options,
on May 18, 2006, the committee held a hearing entitled
``Iran's Political/Nuclear Ambitions and U.S. Policy
Options'' which included examination of the Iranian
energy industry. Testimony was provided by Frank G.
Wisner, Vice Chairman for External Affairs, American
International Group, Inc.; Vali R. Nasr, Professor of
National Security Affairs, Naval Postgraduate School;
Julia Nanay, Senior Director, PFC Energy; and James A.
Phillips, Research Fellow for Middle Eastern Affairs,
Douglas and Sarah Allison Center for Foreign Policy
Studies, The Heritage Foundation.
In conjunction with a series of committee hearings on
the situation in Iraq, on July 20, 2005, the committee
held a hearing entitled ``Accelerating Economic
Progress in Iraq'' which gave particular attention to
development of the energy industry in Iraq. Testimony
was provided by Keith Crane, Senior Economist, RAND
Corporation; Fareed Mohamedi, Senior Director, Country
Strategies Group, PFC Energy; and Frederick D. Barton,
Senior Advisor, International Security Program, Center
for Strategic and International Studies.
III. Committee Action
S. 193 was introduced by Senators Lugar, Biden, Craig,
Salazar, Snowe, Landrieu, Coleman, Lieberman, and Hagel on
January 4, 2007. It is also cosponsored by Senator Thune. On
March 28, 2007, the committee ordered the bill reported
favorably by voice vote.
IV. Section-By-Section Analysis
Section 1. Short Title.
This section designates the short title of the bill.
Section 2. Definitions.
This section provides definitions of certain terms in the
Section 3. Sense of the Congress on Energy Diplomacy and Security.
This section seeks to enhance recognition of the prominence
of energy in U.S. foreign policy and national security, and to
improve State Department capacity by:
Calling for the creation of a Coordinator for
International Energy Affairs within the Office of the
Secretary of State, who will be charged with ensuring
energy security is integrated into State Department
activities and to liaise with other federal agencies;
Calling for the President to ensure there is an
effective mechanism to focus and coordinate federal
agency international energy activities;
Defining the policy goal of energy security as
reliable, affordable, clean, sufficient, and
sustainable energy sources.
Section 4. Strategic Energy Partnerships.
This section seeks to promote energy security through
international partnership by:
Expanding international energy partnerships with
major energy producing and consuming countries, and
with other appropriate countries;
Creation of new international partnerships, and
development of political backing and strengthen
strategic focus for existing activities. These
partnerships are meant to address a comprehensive array
of international energy activities under the umbrella
of energy security, with particular emphasis on
increased use of sustainable energy sources;
Requiring reports on relevant international
activities of the U.S. Government and the actions of
foreign governments effecting U.S. energy security.
Section 5. International Energy Crisis Response Mechanisms.
This section would expand international mechanisms that
protect against petroleum supply disruption. It would:
Prioritize extension of emergency coordination with
China and India through the International Energy
Program if possible, including future coordination
mechanisms for strategic petroleum reserve drawdown,
subject to the achievement by China and India of
reserve holding standards set by the Secretary of
Enhance emergency preparedness in the Western
Hemisphere through increased provision of technical
assistance and development of emergency response
information sharing and coordination mechanisms;
Promote extension of emergency protection to non-
OECD countries by calling on the President to have the
Governing Board of the International Energy Agency
examine establishment of an application procedure
through which non-member countries of the International
Energy Program could apply for allocation of petroleum
reserves in times of emergency.
Section 6. Hemisphere Energy Cooperation Forum.
This section emphasizes the need for pro-active U.S.
engagement within the Western Hemisphere on energy issues by:
Establishment of a standing ministerial energy forum
to promote dialogue and partnerships, which would have
at least three working areas: preparedness for energy
crisis response; an energy sustainability initiative to
improve energy supply and efficiency; and a development
initiative to increase energy access for the poor in a
Creation of a Hemisphere Energy Industry Group to
improve conditions for private investment and public-
Section 7. Appropriate Congressional Committees Defined.
This section defines the term ``appropriate congressional
V. Cost Estimate
Pursuant to Rule XXVI, paragraph 11(a) of the Standing
Rules of the Senate, the following cost estimate has been
provided by the Congressional Budget Office.
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
March 29, 2007.
Energy Diplomacy and Security Act of 2007
As ordered reported by the Senate Committee on Foreign Relations on
March 28, 2007
S. 193 would authorize the Secretary of State, in
coordination with the Secretary of Energy, to foster greater
global energy security by establishing and expanding strategic
energy partnerships with countries that are major energy
producers or consumers. In particular, the bill recommends that
the Secretaries establish mechanisms within the Western
Hemisphere, and with the governments of China and India, to
respond to potential energy crises. Finally, the bill would
require both departments to provide several reports to the
Based on information from the State Department, CBO
estimates that the department would require the equivalent of
14 additional full-time employees to meet the requirements of
the bill, at an annual cost of about $2 million (including
travel costs), assuming appropriation of the estimated amounts.
Enacting the bill would not affect direct spending or receipts.
S. 193 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
The CBO staff contact for this estimate is Sunita D'Monte,
who can be reached at 226-2840. This estimate was approved by
Peter H. Fontaine, Deputy Assistant Director for Budget
VI. Evaluation of Regulatory Impact
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VII. Changes in Existing Law
In compliance with paragraph 12 of Rule XXVI of the
Standing Rules of the Senate, the committee has determined that
there are no changes in existing law made by the bill, as