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S. 704: European Energy Security and Diversification Act of 2019


The text of the bill below is as of Dec 17, 2019 (Reported by Senate Committee).


II

Calendar No. 331

116th CONGRESS

1st Session

S. 704

IN THE SENATE OF THE UNITED STATES

March 7, 2019

(for himself, Mr. Johnson, Mr. Cardin, Mr. Rubio, Mrs. Shaheen, and Mr. Gardner) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations

December 17, 2019

Reported by , with an amendment and an amendment to the title

Strike out all after the enacting clause and insert the part printed in italic

A BILL

To prioritize the efforts of and enhance coordination among United States agencies to encourage countries in Central and Eastern Europe to diversify their energy sources and supply routes, increase Europe’s energy security, and help the United States reach its global energy security goals, and for other purposes.

1.

Short title

This Act may be cited as the European Energy Security and Diversification Act of 2019.

2.

Definitions

In this Act:

(1)

Central or Eastern European country

The term Central or Eastern European country includes—

(A)

Albania;

(B)

Bosnia and Herzegovina;

(C)

Bulgaria;

(D)

Croatia;

(E)

Cyprus;

(F)

the Czech Republic;

(G)

Estonia;

(H)

Greece;

(I)

Hungary;

(J)

Kosovo;

(K)

Latvia;

(L)

Lithuania;

(M)

Macedonia;

(N)

Moldova;

(O)

Montenegro;

(P)

Poland;

(Q)

Romania;

(R)

Serbia;

(S)

Slovakia;

(T)

Slovenia; and

(U)

Ukraine.

(2)

Early-stage project support

The term early-stage project support includes—

(A)

feasibility studies;

(B)

resource evaluations;

(C)

project appraisal and costing;

(D)

pilot projects;

(E)

commercial support, such as trade missions, reverse trade missions, technical work­shops, international buyer programs, and international partner searchers to link suppliers to projects;

(F)

technical assistance and other guidance to improve the local regulatory environment and market frameworks to encourage transparent competition and enhance energy security; and

(G)

long-term energy sector planning.

(3)

Late-stage project support

The term late-stage project support includes debt financing, insurance, and transaction advisory services.

3.

Statement of policy

(a)

Sense of Congress

It is the sense of Congress that the United States has economic and national security interests in assisting Central and Eastern European countries achieve energy security through diversification of their energy sources and supply routes.

(b)

Statement of policy

It is the policy of the United States—

(1)

to advance United States foreign policy and development goals by assisting Central and Eastern European countries to reduce their dependence on energy resources from countries that use energy dependence for undue political influence, such as the Russian Federation, which has used natural gas to coerce, intimidate, and influence other countries;

(2)

to promote the energy security of allies and partners of the United States by encouraging the development of accessible, transparent, and competitive energy markets that provide diversified sources, types, and routes of energy;

(3)

to encourage United States public and private sector investment in European energy infrastructure projects to bridge the gap between energy security requirements and commercial demand in a way that is consistent with the region’s absorptive capacity; and

(4)

to help facilitate the export of United States energy resources, technology, and expertise to global markets in a way that benefits the energy security of allies and partners of the United States, including in Central and Eastern Europe.

4.

Prioritization of efforts and assistance for energy infrastructure projects in Central and Eastern Europe

(a)

In general

In pursuing the policy described in section 3, the Secretary of State, in coordination with the heads of United States agencies that operate under the policy guidance of the Secretary, shall, as appropriate, prioritize and expedite the efforts of the Department of State and those agencies in supporting the efforts of the European Commission and the governments of Central and Eastern European countries to increase their energy security, including through—

(1)

providing diplomatic and political support to the European Commission and those governments, as necessary—

(A)

to facilitate international negotiations concerning cross-border infrastructure;

(B)

to enhance Europe’s regulatory environment with respect to energy; and

(C)

to develop accessible, transparent, and competitive energy markets supplied by diverse sources, types, and routes of energy; and

(2)

providing support to improve European energy markets, including early-stage project support and late-stage project support for the construction or improvement of energy infrastructure, as necessary—

(A)

to diversify the energy sources and supply routes of Central and Eastern European countries;

(B)

to enhance energy market integration across the region; and

(C)

to increase competition within energy markets.

(b)

Project selection

(1)

In general

The agencies described in subsection (a) shall identify energy infrastructure projects that would be appropriate for United States assistance under this section.

(2)

Project eligibility

A project is eligible for United States assistance under this section if the project is—

(A)

related to—

(i)

natural gas infrastructure, such as interconnectors, storage facilities, liquefied natural gas import facilities, or reverse flow capacity;

(ii)

electricity transmission infrastructure, electricity storage projects, or smart grid projects;

(iii)

renewable energy projects in wind, solar, tidal, or other forms; or

(iv)

the improvement, rehabilitation, or construction of natural gas, coal, or other electricity generation facilities to increase the efficiency and reliability of electricity production; and

(B)

located in a Central or Eastern European country.

(3)

Preference

In selecting among projects that are eligible under paragraph (2), the agencies described in subsection (a) shall give preference to projects that—

(A)

link the energy systems of two or more Central and Eastern European countries;

(B)

have already been identified by the European Commission as being integral for the energy security of Central and Eastern European countries;

(C)

are expected to enhance energy market integration;

(D)

can attract funding from the private sector, an international financial institution, the government of the country in which the project will be carried out, or the European Commission; or

(E)

have the potential to use United States goods and services during project implementation.

(c)

Types of assistance

(1)

Diplomatic and political support

The Secretary of State shall provide diplomatic and political support to the European Commission and the governments of Central and Eastern European countries, as necessary, including by using the diplomatic and political influence and expertise of the Department of State to build the capacity of those countries to resolve any impediments to the development of projects selected under subsection (b).

(2)

Early-stage project support

The Director of the Trade and Development Agency shall provide early-stage project support with respect to projects selected under subsection (b), as necessary.

(3)

Late-stage project support

Agencies described in subsection (a) that provide late-stage project support shall do so with respect to projects selected under subsection (b), as necessary.

(d)

Funding

(1)

Private sector investment

The agencies described in subsection (a)—

(A)

are authorized to provide financing of not more than $1,000,000,000 to support private sector investment in projects that diversify the energy sources and energy transport capabilities of Central and Eastern European countries and to improve energy market integration in those countries; and

(B)

shall ensure that amounts from such investments are available for fiscal years 2020 through 2024 for debt financing and insurance for projects under this section.

(2)

Authorization of appropriations for Trade and Development Agency

There are authorized to be appropriated to the Director of the Trade and Development Agency for each of fiscal years 2020 through 2024—

(A)

$5,000,000 to provide assistance under this section; and

(B)

such sums as may be necessary for the Agency to employ additional personnel to provide such assistance.

(3)

Countering Russian Influence Fund

Section 254(b) of the Countering Russian Influence in Europe and Eurasia Act of 2017 (22 U.S.C. 9543(b)) is amended by adding at the end the following:

(7)

To assist United States agencies in providing assistance under section 4 of the European Energy Security and Diversification Act of 2019.

.

5.

Progress reports

Not later than one year after the date of the enactment of this Act, and annually thereafter, the President shall submit to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives a report on progress made in providing assistance for projects under section 4 that includes—

(1)

a description of the energy infrastructure projects the United States has identified for such assistance; and

(2)

for each such project—

(A)

a description of the role of the United States in the project, including in early-stage project support and late-stage project support;

(B)

the amount and form of any debt financing and insurance provided by the United States Government for the project;

(C)

the amount and form of any early-stage project support; and

(D)

an update on the progress made on the project as of the date of the report.

1.

Short title

This Act may be cited as the European Energy Security and Diversification Act of 2019.

2.

Definitions

In this Act:

(1)

Early-stage project support

The term early-stage project support includes—

(A)

feasibility studies;

(B)

resource evaluations;

(C)

project appraisal and costing;

(D)

pilot projects;

(E)

commercial support, such as trade missions, reverse trade missions, technical workshops, international buyer programs, and international partner searchers to link suppliers to projects;

(F)

technical assistance and other guidance to improve the local regulatory environment and market frameworks to encourage transparent competition and enhance energy security; and

(G)

long-term energy sector planning.

(2)

Late-stage project support

The term late-stage project support includes debt financing, insurance, and transaction advisory services.

3.

Statement of policy

(a)

Sense of Congress

It is the sense of Congress that the United States has economic and national security interests in assisting European and Eurasian countries achieve energy security through diversification of their energy sources and supply routes.

(b)

Statement of policy

It is the policy of the United States—

(1)

to advance United States foreign policy and development goals by assisting European and Eurasian countries to reduce their dependence on energy resources from countries that use energy dependence for undue political influence, such as the Russian Federation, which has used natural gas to coerce, intimidate, and influence other countries;

(2)

to promote the energy security of allies and partners of the United States by encouraging the development of accessible, transparent, and competitive energy markets that provide diversified sources, types, and routes of energy;

(3)

to encourage United States public and private sector investment in European energy infrastructure projects to bridge the gap between energy security requirements and commercial demand in a way that is consistent with the region’s absorptive capacity; and

(4)

to help facilitate the export of United States energy resources, technology, and expertise to global markets in a way that benefits the energy security of allies and partners of the United States, including in Europe and Eurasia.

4.

Prioritization of efforts and assistance for energy infrastructure projects in Europe and Eurasia

(a)

In general

In pursuing the policy described in section 3, the Secretary of State, in consultation with the Secretary of Energy and the heads of other relevant United States agencies, shall, as appropriate, prioritize and expedite the efforts of the Department of State and those agencies in supporting the efforts of the European Commission and the governments of European and Eurasian countries to increase their energy security, including through—

(1)

providing diplomatic and political support to the European Commission and those governments, as necessary—

(A)

to facilitate international negotiations concerning cross-border infrastructure;

(B)

to enhance Europe’s regulatory environment with respect to energy; and

(C)

to develop accessible, transparent, and competitive energy markets supplied by diverse sources, types, and routes of energy; and

(2)

providing support to improve European and Eurasian energy markets, including early-stage project support and late-stage project support for the construction or improvement of energy and related infrastructure, as necessary—

(A)

to diversify the energy sources and supply routes of European and Eurasian countries;

(B)

to enhance energy market integration across the region; and

(C)

to increase competition within energy markets.

(b)

Project selection

(1)

In general

The agencies described in subsection (a) shall identify energy infrastructure projects that would be appropriate for United States assistance under this section.

(2)

Project eligibility

A project is eligible for United States assistance under this section if the project—

(A)
(i)

improves electricity transmission infrastructure, power generation through the use of a broad power mix (including fossil fuel and renewable energy), or energy efficiency; or

(ii)

advances electricity storage projects, smart grid projects, distributed generation models, or other technological innovations, as appropriate; and

(B)

is located in a European or Eurasian country.

(3)

Preference

In selecting among projects that are eligible under paragraph (2), the agencies described in subsection (a) shall give preference to projects that—

(A)

link the energy systems of 2 or more European or Eurasian countries;

(B)

have already been identified by the European Commission as being integral for the energy security of European countries;

(C)

are expected to enhance energy market integration;

(D)

can attract funding from the private sector, an international financial institution, the government of the country in which the project will be carried out, or the European Commission; or

(E)

have the potential to use United States goods and services during project implementation.

(c)

Types of assistance

(1)

Diplomatic and political support

The Secretary of State shall provide diplomatic and political support to the European Commission and the governments of European and Eurasian countries, as necessary, including by using the diplomatic and political influence and expertise of the Department of State to build the capacity of those countries to resolve any impediments to the development of projects selected under subsection (b).

(2)

Early-stage project support

The Director of the Trade and Development Agency shall provide early-stage project support with respect to projects selected under subsection (b), as necessary.

(3)

Late-stage project support

Agencies described in subsection (a) that provide late-stage project support shall do so with respect to projects selected under subsection (b), as necessary.

(d)

Funding

(1)

Private sector investment

The agencies described in subsection (a)—

(A)

are authorized to obligate and expend not more than $1,000,000,000 to support private sector investment in projects that diversify the energy sources and energy transport capabilities of European and Eurasian countries and to improve energy market integration in those countries; and

(B)

shall ensure that amounts from such investments are available for fiscal years 2020 through 2024 for debt financing and insurance for projects under this section.

(2)

Authorization of appropriations for Trade and Development Agency

There are authorized to be appropriated to the Director of the Trade and Development Agency for each of fiscal years 2020 through 2024—

(A)

$5,000,000 to provide assistance under this section; and

(B)

such sums as may be necessary for the Agency to employ additional personnel to provide such assistance.

(3)

Countering Russian Influence Fund

Section 254(b) of the Countering Russian Influence in Europe and Eurasia Act of 2017 (22 U.S.C. 9543(b)) is amended by adding at the end the following:

(7)

To assist United States agencies in providing assistance under section 4 of the European Energy Security and Diversification Act of 2019.

.

(e)

Exception from certain limitation under BUILD Act

(1)

In general

For purposes of providing support for projects under this section—

(A)

the United States International Development Finance Corporation may provide support for projects in countries with upper-middle-income economies or high-income economies (as those terms are defined by the World Bank);

(B)

the restriction under section 1412(c)(2) of the Better Utilization of Investments Leading to Development Act of 2018 (22 U.S.C. 9612(c)(2)) shall not apply; and

(C)

the Corporation shall restrict the provision of such support in a country described in subparagraph (A) unless—

(i)

the President certifies to the appropriate congressional committees that such support furthers the national economic or foreign policy interests of the United States; and

(ii)

such support is—

(I)

designed to produce significant developmental outcomes or provide developmental benefits to the poorest population of that country; or

(II)

necessary to preempt or counter efforts by a strategic competitor of the United States to secure significant political or economic leverage or acquire national security-sensitive technologies or infrastructure in a country that is an ally or partner of the United States.

(2)

Definitions

In this subsection, the terms appropriate congressional committees and less developed country have the meanings given those terms in section 1402 of the Better Utilization of Investments Leading to Development Act of 2018 (22 U.S.C. 9601).

5.

Progress reports

Not later than one year after the date of the enactment of this Act, and annually thereafter, the President shall submit to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives a report on progress made in providing assistance for projects under section 4 that includes—

(1)

a description of the energy infrastructure projects the United States has identified for such assistance; and

(2)

for each such project—

(A)

a description of the role of the United States in the project, including in early-stage project support and late-stage project support;

(B)

the amount and form of any debt financing and insurance provided by the United States Government for the project;

(C)

the amount and form of any early-stage project support; and

(D)

an update on the progress made on the project as of the date of the report.

Amend the title so as to read: A bill to prioritize the efforts of and enhance coordination among United States agencies to encourage European and Eurasian countries to diversify their energy sources and supply routes, increase Europe’s energy security, and help the United States reach its global energy security goals, and for other purposes..

December 17, 2019

Reported with an amendment and an amendment to the title