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U.S. Deputy Secretary of Energy Daniel Poneman

Atlantic Council Conference on the 20^th Anniversary of Kazakhstan’s Independence

Ritz-Carlton in Washington, DC

January 31, 2012

Remarks as prepared for delivery 

Thank you, Ambassador Wilson, for the kind introduction. Thanks also to you and your colleagues at the Atlantic Council for organizing today’s conference. I appreciate this opportunity to join Minister Kazykhanov and Ambassador Idrissov to celebrate the 20^th anniversary of Kazakhstan’s independence. It is an honor to share the room today with so many of the distinguished leaders from both Kazakhstan and the United States who have contributed to the partnership our two countries enjoy today.

Choosing a Future Free of Nuclear Weapons

Not every generation has the opportunity to build a new nation. Twenty years ago, that opportunity came to the people of Kazakhstan. With the end of the Soviet Union, the world turned its attention to a set of concerns about what would happen when one of the two global nuclear superpowers ceased to exist. Now that we know what happened, it is all too easy to forget the danger that we faced.

In his final address as President of the Union of Soviet Socialist Republics, Mikhail Gorbachev said, “The threat of nuclear war has been removed.” But that was not exactly true, and the truth was not so simple. With the Soviet Union’s nuclear weapons, expertise, and facilities scattered among the newly independent, former Soviet Republics, we faced the prospect of not one but four nuclear weapons states.

At such moments in history, difficult choices must be made and decisions must be taken. One has to follow one’s principles and one’s conscience. President Nazarbayev took that opportunity – having inherited more than 1,400 nuclear weapons – and turned toward peace. He decided to relinquish those weapons, to shut down the Semipalatinsk test site, and to end nuclear testing in Kazakhstan.

Last October, along with many others in the room, I had the opportunity to travel to Kazakhstan and visit ground zero at Semipalatinsk to commemorate that historic moment. That decision for peace — that decision for nonproliferation of nuclear weapons — has rightly earned Kazakhstan international respect and established a pathway forward for the rapid development of the nation.

As Kazakhstan progresses down that pathway, we at the United States Energy Department are committed to building on two decades of mutually-beneficial cooperation across a broad range of shared strategic interests – from nuclear security and nonproliferation to Kazakhstan’s energy production and economic diversification.

In 2001, former Secretary of State Colin Powell and Ambassador Idrissov convened the first meeting of the United States-Kazakhstan Energy Partnership. It is now my honor to share the chairmanship of this Energy Partnership with Kazakhstan’s Minister of Oil and Gas, Sauat Mynbayev.

I am proud to report that this Partnership has enabled remarkable progress on many issues of strategic importance to each of our nations. Today, I will focus on a few key areas of that cooperation that give ample reason to believe that progress will only gain momentum.

Cooperating to Promote Nuclear Security and Nonproliferation

Given Kazakhstan’s prominent role as a supplier of uranium for nuclear power plants, as well as the large nuclear weapons infrastructure it inherited after the breakup of the Soviet Union, nuclear security and nonproliferation are bedrock issues of our partnership. In the 20 years since President Nazarbayev’s dramatic decision, the United States of America and the Republic of Kazakhstan have worked closely together to achieve our shared nuclear security and nonproliferation goals.

These efforts have included a comprehensive campaign to safely shut down the BN-350 reactor and secure 775 nuclear weapons worth of used fuel at the facility. They have included projects through the International Science and Technology Center to engage former Kazakh weapons scientists in peaceful pursuits, and so to prevent the spread of expertise in nuclear weapons development and production.

Most recently, these efforts resulted in a milestone achievement in our work to eliminate the remaining stocks of highly-enriched uranium in Kazakhstan. Our two nations partnered with the International Atomic Energy Agency to blend down 33 kilograms of highly enriched uranium from the Kazakh Institute of Nuclear Physics in Almaty. The resulting low-enriched uranium cannot be redirected for use in nuclear weapons. Instead, it will be returned to the Institute for future scientific work that will support the safe, secure and peaceful use of nuclear energy.

We look forward to continuing this cooperation, and we applaud Kazakhstan’s regional and international leadership in these areas. Together, our nations can continue to make progress toward achieving our shared goals of securing vulnerable nuclear materials, combating illicit trafficking in nuclear materials, and strengthening the international nuclear nonproliferation regime.

And together, Kazakhstan and the United States can continue to work to realize the ultimate vision that President Nazarbayev and President Obama share – the vision of a world without nuclear weapons.

Developing Energy Resources to Fuel Global Growth

Just as Kazakhstan has been a global leader on nuclear issues, so too can the country play an expanded role in promoting energy security and fueling global growth.

The country has been endowed with prodigious natural resources, including some of the world’s most impressive oil and natural gas fields. The rapid growth of hydrocarbon production in Kazakhstan since the country’s independence is largely a result of cooperation between the Government of Kazakhstan and international oil companies.

Within the framework of the U.S.-Kazakhstan Energy Partnership, we have worked together to promote this kind of public-private cooperation. Many of America’s largest private companies have made significant investments in the production and transit of oil and gas in Kazakhstan. In turn, these investments have enabled some of the largest and most technically-challenging oil production projects anywhere in the world, at places like Tengiz, Karachaganak, and Kashagan. They have also generated significant employment opportunities for the Kazakhstani people.

And yet we have only just begun to get a sense for Kazakhstan’s importance to global energy markets and energy security. Kazakhstan has tremendous potential to develop further its hydrocarbon resources. In the coming years, the country can play an important role in helping to meet the world’s increased demand for energy. Full development of its major oilfields could make Kazakhstan one of the world’s top five oil producers within the next decade.

However, that outcome is not a foregone conclusion. Many of Kazakhstan’s oil and gas fields present engineering challenges that require significant investments in capital, technology and expertise. Our two nations can and should continue to work together to promote safe and effective development of these resources in the years ahead.

Investing in a 21st Century Diversified Economy

At stake is much more than efficient extraction or even the monetary wealth it provides. As the first twenty years of Kazakhstan independence have shown, investing wisely in energy production can also provide the Kazakhstani people with an important source of employment, as well as revenues that can in turn be reinvested in other sectors to help diversify the economy.

For example, oil and gas revenues were central to the creation of the country’s sovereign wealth fund, Samruk-Kazyna. During the financial crisis, this fund in turn provided a critical source of strategic support for the nation’s financial system, enabling Kazakhstan to avoid recession and to emerge quickly from the worldwide downturn.

Since achieving independence, Kazakhstan has pursued macroeconomic reforms that have attracted substantial international investment in new or expanded industries like mining, chemical production, and agriculture. Kazakhstan has demonstrated its ability to develop strong economic opportunities for investors, and we look forward to seeing new areas for potential investment expand over the next few years – both inside and outside of the energy sector.

Oil and natural gas are not Kazakhstan’s only energy resources. The nation’s geography and landscape also provides it with great potential for renewable electricity generation from solar and wind power. We are encouraged by Kazakhstan’s interest in working with private sector companies to develop wind energy infrastructure.

Through the U.S.-Kazakhstan Energy Partnership, we are engaged in efforts to train the workers and engineers who are pioneering clean energy and energy efficiency technologies in Kazakhstan. This sort of expert-to-expert collaboration between our academic institutions and laboratories is equal in importance to the formal cooperation that occurs at levels high within our respective governments.

Just as it is liberalizing its economy, we continue to hope that the Government of Kazakhstan also follows through on its stated goal of strengthening the overall conditions necessary for genuine political pluralism. As we look to the future, we want to deepen the engagement of our civil societies and private sectors in trade and investment, science and technology, education, the arts, and much more.

 By wisely developing its natural resources, a strong, prosperous and democratic Kazakhstan can energize the global transmission of learning, trade and freedom across the steppes of Central Asia.  

We congratulate Kazakhstan on this momentous anniversary of its independence and we look forward to continuing to work with Kazakhstan in the pursuit of nuclear nonproliferation, regional energy security, and prosperity in the years to come.

Thank you.