Portman Co-Chairs Senate Foreign Relations Committee Hearing, Presses State Department Energy Nominee on Russian Energy

June 23, 2022 | Press Releases

WASHINGTON, D.C. – This afternoon, U.S. Senator Rob Portman (R-OH) questioned The Honorable Geoffrey Pyatt, nominee to be the Assistant Secretary of State for Energy Resources, on the importance of countering Russian malign influence in Europe by promoting European energy security and independence. Senator Portman questioned Ambassador Pyatt on the Biden Administration’s refusal to sanction the Nord Stream 2 pipeline, as well as its recent decision to continue allowing U.S. financial institutions to process purchases of Russian energy. He also discussed the need for the United States to focus its energy policy on domestic production, instead of relying on foreign nations, like Venezuela, Iran, and Saudi Arabia.

A transcript of Senator Portman’s opening statement and questioning can be found below. A video of Senator Portman’s opening remarks can be found here and a video of Senator Portman’s questioning can be found here.

 

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Opening Statement:

“Thank you, Sen. Markey, and thank you for your perfect timing. I apologize for being a couple of minutes late, we are all juggling all of our commitments this morning but I’m delighted to be here and to be with these nominees. Thank you all for being willing to serve our country. We were just told by Sen. Markey some about your background so I won’t go into that except to say that all of you are looking to join the ranks of some very important responsibilities. Elizabeth Shortino to be at IMF, I look forward to talking to you about that, Ambassador David Pressman for US Ambassador to Hungary, Jeff Pyatt who I got to know when he was Ambassador in Ukraine to be Assistant Secretary of State for energy resources, and Ambassador Robert Wood at the UN. This is a critical time, I guess we always say that in global affairs, but I think it’s not an overstatement to say that right now it is particularly difficult because it is a time of great instability which requires US leadership, in my view, on the world stage so the positions you have been nominated to are all very important and maybe now more than ever.

“Ambassador Pyatt, energy security, as you know, is of critical importance as Russia continues to wage this war against Ukraine. $870 million a day is about what the Europeans are sending to Russia to help fund the war machine, and we need to see a change there and we are seeing it slowly, more quickly if the United States has an even stronger leadership role. Unfortunately, it took us a while to work with the EU to get them to make any moves but they have embargoed Russian coal now which will take effect in mid-August as you know, and then they are phasing into some embargo on Russian oil. I’d like to hear from you today of course about how we can be more helpful to accelerate Europe’s independence from Russia. Strong concerns with our energy policies here at home because I don’t think they are helping right now, and we need to do what we can to increase production in this country rather than rely on Venezuela’s and Saudi Arabia’s even and certainly the Iranian sources to backfill our own energy needs.

“Ambassador Pressman, Hungary has found itself in the middle of these conversations about European energy security and energy independence from Russia. They were a particularly difficult partner to deal with during Europe’s attempts to agree to ban Russian oil, in fact, the compromise was required because of them. I have concerns with the influence of Russia and China in Hungary and would like to hear from you today about the dynamic and ways in which the United States can work to counter this and the ways in which you personally would work to do so.

“Ambassador Wood, no shortage of global issues before the security council, as it was noted Russia’s illegal invasion of Ukraine, the global food and energy crisis, and multiple humanitarian disasters, if confirmed your plate will be full, so I want to talk to you about what your priorities will be at the UN if confirmed and how you plan to work with our partners and allies there to pursue those priorities. And we do have a lot of allies and it turns out that Vladimir Putin’s brutal and unwarranted attack on Ukraine has strengthened some of those alliances. I know that the NATO meeting coming up will have the heads of state from countries like South Korea and Japan and Australia and New Zealand attending. So, although they are not expanding NATO, they are in fact expanding its reach by allying with us so closely.

“Ms. Shortino, inflation and energy prices continue to climb upwards. Of course, this is impacting us here and at home but also impacting emerging developing counties around the world and to compound that of course we have a sovereign country Ukraine which needs to be rebuilt. I’m interested, really interested in talking to you about that, I think that IMF can play a central role, following on the $40 billion package that Sen. Markey and I supported to help Ukraine. I would hope the IMF can play a bigger role going forward to help Ukraine get back on its feet. I would like to thank you all for being here again and again for stepping forward to serve your country and look forward to hearing from you.”

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Questioning:

Senator Portman: “Thank you, Mr. Chairman. I’ll take that promotion. So, I mentioned earlier that I had the opportunity to with you, Ambassador Pyatt, in your role in Ukraine. I thought you did a very good job there and particularly, you know, advocating a stronger position vis-à-vis Russia. And, I am glad that you are stepping up to do this. I’m going to put you on the spot here though a little bit. You said ‘I’ve seen how Russia weaponized energy. We need to free Europeans of malign actors like Russia.’ That’s good. I just wonder if we are doing that. And, I think about Nord Stream 2 – what we did there.  I mean, what this administration thought, as I understand it, is that if they approved Nord Stream 2, which proves the previous administration had disapproved that somehow that would make Russia a better partner. What do you think about that? Do you think it made Russia a better partner?”

The Honorable Geoffrey R. Pyatt: “So, Senator, let me start by saying thank you to you and all the members of the committee for the tremendous support that I enjoyed as U.S. ambassador to Ukraine. It made an extraordinary difference in the effectiveness of our diplomacy and our effort to support the choices of the Ukrainian people. On the question of energy, I’ll say a couple of quick things. First, Nord Stream 2 was a bad deal. I wish it didn’t take this brutal war to make the rest of the world understand that so clearly.” 

Senator Portman: “I have only got a few minutes here, but not just the rest of the world. What I am asking you really is what lessons did you learn from that and what did the United States learn from it because I think we made a mistake. I mean some people say it gave Putin a green light; I don’t go that far. I think he was seeing a green light everywhere he looked, but that was one of the reasons, I think, he decided well, this is an indication, you know, that Europe and the United States are not going to stand up to me because I have weaponized energy effectively, they have even now approved Nord Stream 2 to make them more dependent on Russian oil. Is that the lesson you get from it?”

The Honorable Geoffrey R. Pyatt: “So Senator, I would say Russia’s manipulation continues today – you see it in the reduction of energy supplies.”

Senator Portman: “40 percent reduction, of Nord Stream 2. Let me ask you that, I see you’re not going to answer my question directly. But do you think we should do something about Nord Stream 1?”

The Honorable Geoffrey R. Pyatt: “I think we need to make sure that we do everything possible to ensure that people in Europe and everywhere else remember the way they felt on the 25th of February. That is to make sure that we make sure that nobody ever again says that Russia can be a reliable energy supplier. That we do everything possible to reduce Russian revenues from oil and gas while also avoiding further disruption of a highly disrupted global energy marketplace.”

Senator Portman: “Let me just suggest that we are doing the opposite in some regards, not in regard to Nord Stream 2 anymore, although we did, thanks to the Germans finally deciding rightly so that’s not the issue, but last week the Biden administration Treasury Department announced an extension of HC licenses through December 5th. This is allowing energy transactions to continue to be exempted from sanctions. It otherwise would have ended tomorrow, June 24th. We extended that license, so these Russian banks are now able to transact energy deals and support again, the continued reliance on Russian energy. I pushed Treasury on this and was told the decision was made based on Europe’s phased-in of the energy embargo – the oil embargo in particular. And again, $870 million a day. That’s what I am told is the average daily receipts that Russia is receiving, with a nice margin. And, that is one reason you see the Ruble gaining strength. That’s why you see the Russian economy not being nearly as debilitated as the Ukrainian economy. And, you know frankly, they are not feeling the pressure. So, what do you think about that? Should that license have been renewed that was set to expire tomorrow?”

The Honorable Geoffrey R. Pyatt: “So, Senator, I wasn’t part of those policy deliberations. I don’t have the benefit of all the perspectives so I can’t address that. What I will say is that it is very clear to me that we are in the early stages of this campaign and that if you look at what’s happened in the Russian oil and gas industry – the gradual European phaseout, the European decision on insurance for sea-born  Russian oil, the disengagement of international companies from the Russian oil and gas industry which is taking away technology and will inevitably damage Russia’s ability to produce oil and gas. All of these things will raise the cost for Vladimir Putin of the outrageous events that have unfolded since the 24th of February.”

Senator Portman: “Well as you know I think we should be more aggressive and I hope we will be. And despite all the things you are saying, they are doing just fine. It’s not just China and India that is providing all these resources to fund the war machine; it’s our allies in Europe and elsewhere.  So, I have lots more questions about Hungary and about the IMF. Hopefully, we have a second round. And, again I’m glad that you’re stepping up. I hope you will be as aggressive as I saw you in Ukraine where you actually helped push the administration policy toward a more realistic view of Russia. I want to see the same thing with regard to your new role with regard to our energy crises we face. Thank you.”

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