PESD fellow Nadeja Victor presented Global Natural Gas Market and Russian Gas Supply Presentation on March 14 during the "market mechanisms of energy market regulation and ways of improving them" roundtable chaired Anantoliy Yanovskiy, Director, Department of Fuel and Energy Complex, Ministry of Industry and Energy, RF. In the meeting of the Group of Eight energy ministers the following days, the chair's statement was the following:

1. G8 Energy Ministers met in Moscow on 15-16 March 2006 in order to discuss the matters of mutual interest related to global energy security.

2. The reliable energy supply plays a key role in development of worlds economies bearing in mind that the well-being, way and quality of life of people directly depend on access to energy.

3. Ministers are aware that the 21st century is sure to witness a significant increase of the global consumption of energy, primarily by dynamically developing economies. Despite the increased presence of alternative sources in the energy mix, the fossil fuels will remain the basis of the world energy industry for at least the first half of the 21st century.

4. Ministers discussed the challenges to the global energy security, issues related to promotion of market efficiency of the fuel and energy sector. We note that meeting energy security challenges will require reliance on market-oriented approaches aimed at increasing energy supply and stemming growth in demand, while encouraging market-based pricing, competition, energy efficiency, and conservation.

5. Ministers point out the importance of further development and strengthening of dialogue among energy producer, transit and consumer countries, including information exchange on the current situation as well as medium- and long-term plans and programmes of development of their respective energy sectors.

6. Ministers confirm our support for appropriate international initiatives such as the Joint Oil Data Initiative aimed at greater accessibility and transparency of data on reserves, demand and supply, stocks and production capacities.

7. Ministers note that a stable future of the international energy sector requires significant investment in the production, transportation and processing of energy resources. We recognize that to attract investment it is essential for countries to have open and favourable investment regimes including stable and predictable regulations, clear tax laws, and efficient administrative procedures as well as fair and reciprocal access to markets along the energy value chain.

8. Ministers favour the implementation of the Action plan adopted last year by our leaders in Gleneagles which includes a wide range of measures to promote innovations, increase energy efficiency and enhance environmental protection.

9. Ministers proceed from the fact that diversification of the energy portfolio in terms of energy sources, suppliers and consumers as well as delivery methods and routes will reduce energy security risks not only for individual countries but for the entire international community. Joint efforts of the G8 and other countries aimed at wider use of renewable and alternative energies, development and implementation of innovative energy technologies and development of low-carbon energy would contribute substantially to the solution of this strategic task. For those countries that wish, wide-scale development of safe and secure nuclear energy is crucial for long-term environmentally sustainable diversification of energy supply.

10. Ministers agree that continued international cooperation to develop the low carbon technologies of the future will be crucial. Facilitating development and deployment of innovative energy technology solutions will have longer term environmental, economic and energy security benefits and be key to a global sustainable energy future.

11. A significant reduction of the gap in energy supply between developed and undersupplied less-developed countries is a major aspect of global energy security.

Stanford, California - If the deal to supply India with nuclear technologies goes through, future generations may remember it for quite different reasons than the debate over nuclear proliferation.

Nuclear power emits no carbon dioxide, the leading cause of global warming. And India, like most developing countries, has not been anxious to spend money to control its emissions of this and other so- called greenhouse gases.

India is embracing nuclear power for other reasons - because it can help the country solve its chronic failure to supply the electricity needed for a burgeoning economy. But in effect, the deal would marry their interest in power with ours in protecting the planet.

India is growing rapidly. In recent years its economy has swelled at more than 7 percent per year, and many analysts believe it is poised to grow even faster in the coming decade.

The economic growth is feeding a voracious appetite for electricity that India's bankrupt utilities are unable to satisfy. Blackouts are commonplace. Farmers, who account for about two-fifths of all the power consumed, can barely rely on getting power for half of every day. In industrial zones, the lifeblood of India's vibrant economy, unstable power supplies are such trouble that the biggest companies usually build their own power plants.

So most analysts expect that the demand for electricity will rise at about 10 percent a year. (For comparison, U.S. power demand notches up at just 2 percent annually.)

Over the past decade, about one third of India's new power supplies came from natural gas and hydro electricity. Both those sources have been good news for global warming - natural gas is the least carbon- intensive of all the fossil fuels, and most of India's hydroelectric dams probably emit almost no greenhouse gases.

However, the bloom is coming off those greenhouse-friendly roses. New supplies of natural gas cost about twice what Indians are used to paying, and environmental objections are likely to scupper the government's grand plans for new hydro dams.

That leaves coal - the most carbon-intensive of all fossil fuels. Already more than half of India's new power supplies come from coal, and that could grow rapidly.

Traditionally, the coal sector was plagued by inefficiencies. State coal mines were notoriously dangerous and inefficient. Coal-fired plants in western provinces, far from the coal fields and vulnerable to the dysfunctional rail network, often came within days of shutting operations due to lack of coal.

All that is changing. Private and highly efficient coal mines are grabbing growing shares of the coal market. Upgrades to the nation's high-tension power grid is making it feasible to generate electricity with new plants installed right at the coal mines.

These improvements make coal the fuel to beat.

So the deal struck with President George W. Bush matters. At the moment, India has just 3 gigawatts of nuclear plants connected to the grid. Government planners envision that nuclear supply will grow to 30 GW over the next generation, but that will remain a fantasy without access to advanced nuclear technologies and, especially, nuclear fuels - such as those offered under the deal with the Bush administration.

By 2020, even after discounting for the government's normal exuberance in its forecasts, a fresh start for nuclear power could increase nuclear generating capacity nearly ten-fold.

By displacing coal, that would avoid about 130 million tons of carbon dioxide per year (for comparison, the full range of emission cuts planned by the European Union under the Kyoto Protocol will total just 200 million tons per year).

The effort, if successful, would eclipse the scheme under the Kyoto Protocol, known as the Clean Development Mechanism, that was designed to reward developing countries that implement projects to reduce their emissions of greenhouse gases. The largest 100 of these CDM projects, in total, won't reduce emissions as much as a successful effort to help India embrace safe nuclear power.

The benefits in slowing global warming are not enough to make the deal a winner. Care is needed to tame the risks of proliferation, especially those connected from India's system of breeder reactors that make more weapons-capable fuel than they consume. And complementary efforts, led by Indians, are needed to fix the trouble in India's electricity sector that have so far discouraged private investors.

None of this will be easy. There are no silver bullets in cooling the greenhouse.

What is important is that the deal is not just a one-off venture, as the administration's backers, on the defensive, have suggested. It could frame a new approach to technology sharing and managing a more proliferation proof fuel cycle that, in turn, will multiply the benefits of a cooler climate.

Coal-rich China is among the many other countries that would welcome more nuclear power and whose emissions of carbon dioxide are growing fast - even faster than India's.

Quite accidentally, it seems, the Bush administration has stumbled on part of an effective strategy to slow global warming. Now it should marry that clever scheme overseas with an effective plan here at home.

"The United States is the most powerful since the Roman Empire," stated Stephen Walt, the Belfer Professor of International Affairs and academic dean of the John F. Kennedy School, Harvard University, delivering the 2005 Robert G. Wesson Lecture in International Relations Theory and Practice, at the Freeman Spogli Institute on November 16, 2005. America's unmatched power is therefore of great interest and concern to leaders in most other parts of the world, from President Putin in Russia, to President Chirac in France, and President Musharraf in Pakistan. For Americans, however, the key issue is how others are now responding to U.S. power.

Speaking before an audience of Stanford faculty, students, and the broader community, Professor Walt examined three interwoven themes: why other states do not welcome U.S. power; what are the main strategies available to them for dealing with American power? and what should the United States do in response?

As an integral part of his analysis, Walt showed opinion polls demonstrating a striking gap between American views of U.S. primacy and other countries' perceptions of the current U.S. role. For example, although the 2002 Pew Global Attitudes Project found that 79 percent of U.S. citizens believe it is good that "American ideas and customs are spreading around the world," and 70 percent think that U.S. foreign policy takes the interests of other states into account either "a great deal" or "a fair amount," overwhelming majorities overseas say the United States considers the interest of others "not much" or "not at all." Similarly, a 2005 BBC survey of 21 countries found only five, India, the Philippines, Poland, South Africa, and South Korea, where a majority of people had "positive" attitudes toward the United States.

There are three major sources of anti-Americanism, Walt explained. First, our sheer power makes other nations nervous. Second, there is a perceived sense of hypocrisy between our words and our actions. The case of nuclear weapons provides a vivid example. We preach nonproliferation, yet accord new respect and policy cooperation with newly nuclear states, such as India. Third, how the United States behaves in the world-what we do-invites antipathy. This latter point is abundantly clear in global opinion polls: Even in regions where anti-Americanism seems most strident, nations and individuals report that they do not object to our values or to what we stand for but rather to what we do.

Other nations, Walt pointed out, can choose a strategy of accommodation to our power or a strategy of resistance. Commonly adopted strategies of accommodation include 'bandwagoning," or realigning foreign policies with U.S. wishes, such as Libya's abandonment of nuclear weapons; "regional balancing"-using U.S. power to balance regional threats; "bonding" to curry favor with the United States; and "penetration," a strategy aimed at infiltrating the American political system to influence foreign policy outcomes.

In contrast, countries that choose to resist American power pursue five strategies:

"balancing" our power, alone or in alliance with others; "asymmetric responses," such as terrorism, which try to exploit specific areas of U.S. vulnerability; "blackmail," like North Korea's efforts to extract concessions from its nuclear weapons program; "balking," or tacit non-cooperation; and "delegitimizing," or attempts to turn others against the legitimacy of our actions or policies.

In light of the growing antipathy to U.S. primacy in so many parts of the world, Walt proposed three major courses of action to produce a more favorable response to U.S. power. First, he urged that we reduce American's military footprint abroad-and especially our ground force deployments-and return to a more traditional policy of regional balancing in cooperation with other nations. This policy would make greater use of American air and naval power and limit American intervention to cases where vital U.S. interests are threatened. Second, we should work harder to defend our international legitimacy and rebuild the U.S. image abroad, through a sustained campaign of public diplomacy and by keeping key American institutions-such as higher education-available to foreign visitors. Third, he advocated a more nuanced approach to America's traditional support for Israel, one that balances our genuine support for Israel's existence with the urgent need to bring a lasting settlement to the Israeli-Palestinian conflict.

"The more the United States uses its power in an overwhelming and capricious manner," Professor Walt warned, "the more the rest of the world will resist us." Conversely, the more the United States recognizes and respects the interests of others, while using its power to defend its own interests, the more other nations will welcome U.S. power. "The task we face," he advised, "is to rebuild the trust, admiration, and legitimacy the United States once enjoyed, so the rest of the world can focus not on taming U.S. power but on reaping the benefits it can bring."

When India spectacularly burst into the headlines via its nuclear explosions in May 1998, then US president Bill Clinton had openly vented his fury before aides in the White House. "We are going to come down on those guys like a ton of bricks," he had remarked. Clinton's "volcanic fit" found its echo in the White House statement that expressed "distress" and "displeasure", culminating in Washington imposing a slew of sanctions against India.

These images from the past, culled out from Engaging India, then deputy secretary of state Strobe Talbott's book, appear incredible now. Especially as India readies itself to accord a warm reception to US President George W. Bush next week. The entente, the product of laboriously conducted diplomacy as much as geopolitical shifts that yoked the two together as 'natural allies', is now taking deep root. Sure, there will be protest rallies, strident voices will rail against Bush's hegemonic designs, Prime Minister Manmohan Singh will be cautioned against any tight clinch with Bush. Yet even these voices arise from the awareness that there's a growing relationship between the US and India, realized through knots of strategic partnership and cooperation in every conceivable field - from economy and nuclear technology to education, space and agriculture.

Bush's visit next week prompted Karl Inderfurth, who was assistant secretary of state for South Asia in the Clinton administration, to say, "All of this represents a refreshing degree of continuity in US foreign policy, based on a recognition by the last two American presidents that India is a country that will be a key player in the 21st century." Similarly, Robert Hathaway, of the Woodrow Wilson Center for International Scholars, is impressed that "two successive Indian governments representing different political views and parties... both came to the same conclusion that it is in India's interest to forge a better relationship with the US."

From imposing sanctions against India to laying out a blueprint for nuclear cooperation, both New Delhi and Washington have come a long way in an inordinately short time. Ironically, it was Clinton who provided the impetus for this transformation. Talbott says the former president, after coming to terms with the Pokhran II realities, found it "downright distasteful and counterproductive" to impose sanctions against a country he was trying to improve relations with. Consequently, Talbott, Inderfurth and senior director in the National Security Council Bruce Riedal were entrusted with the task of pulling out Indo-US relations from the abyss in which it had been languishing from the beginnings of the Cold War era.What followed was a dialog between foreign minister Jaswant Singh and Talbott, both seeking to convey to each other the security and strategic interests of their respective countries.

The dialog started yielding dividends immediately, even during the Kargil conflict. Clinton's confrontation of then Pakistani prime minister Nawaz Sharif at their July 4, 1999, meeting in Washington took trust patterns between the US and India to a new level. "Throughout this period, we kept the Indian government informed of what we were doing to try to ease the crisis," recalls Inderfurth, who played a key role in the dialog with Sharif. "All of this turned into an important confidence-builder in our new relationship with India."

"The July 4 meeting was the turning point," agrees Michael Krepon of the Henry L. Stimson Center in Washington. "It demonstrated that US engagement in the India-Pakistan imbroglio would not be detrimental to New Delhi's interests, and it shifted the Clinton administration's focus from proliferation to engagement." The trust was manifest in Clinton's spectacularly successful visit to India in March 2000. An enabling factor in the budding Indo-US romance, says former ambassador Richard Celeste, was the now-forgotten Y2K factor. "The crisis introduced India's enormously talented manpower to our business leaders. Today, the 24/7 bond between companies in the US and service providers in India is the stuff of books and myth-making."

The budding romance acquired a new meaning with the advent of Bush in the White House. His most perspicacious decision was to appoint confidant Robert D. Blackwill as ambassador to India. Blackwill appealed to the popular imagination; his unequivocal pronouncements against Pakistan for fomenting terrorism in India further bolstered the trust between New Delhi and Washington. More importantly, he sought to impart a new heft to the relationship by putting his formidable weight behind the "Next Steps in Strategic Partnership", which envisaged cooperation between the two countries in civil nuclear energy, hi-tech trade, space and dual technology. "If Clinton was the pioneer of the new relationship, Bush is its architect," says Teresita Schaffer of the Center for Strategic and International Studies in Washington.

The impulse for the new relationship is linked to the question: why has India started to matter to the US? Inderfurth cites three reasons: India will become the world's most populous nation, it may well have the world's fastest growing economy by 2020, and it is the world's largest democracy. Krepon adds one more to the list: intellectual capital. "The world expects India to do more heavy lifting," he says.

Ultimately, a relationship in international affairs hinges on convergence of interests. Ashley Tellis of the Carnegie Endowment for International Peace, who's now advising under secretary of state R. Nicholas Burns, listed a string of "common interests" at a congressional hearing last year. These included:

preventing Asia from being dominated by any single power that has the capacity to crowd out others and which may use aggressive assertion of national self-interest to threaten American presence, American alliances, and American ties with the states of the region; eliminating the threat posed by state sponsors of terrorism; protecting the global commons, especially the sea lanes of communications, through which flow not only goods and services critical to the global economy but also undesirable commerce such as drug trafficking, people smuggling and weapons of mass destruction technologies.

So, isn't China the "single power" that Tellis thinks could threaten American interests in Asia? He denied this assumption to Congress, but many feel China is indeed the factor behind Washington's attempts to assist India in becoming a major world power.As author Sunil Khilnani, of the Johns Hopkins School of Advanced International Studies, says, "Many current inhabitants of the Pentagon see an India allied to the US as a potential bulwark to a China whose ambitions are still difficult to read." Washington's long-term view is that since China will not support the US war on terror, it's a threat against which the US needs a counterweight. "Japan has proven it does not have the emotional and intellectual muscle to face China. Hence, India should play that role," explains Rafiq Dossani of Stanford University.

The Bush regime's keenness on India also springs from the disaster his other foreign policy initiatives have been. "Bush would like to leave at least one foreign policy achievement as his legacy. He'd like to claim that he 'delivered' India to the US, just as Nixon could earlier claim the same about China," says Khilnani.

These reasons apart, the relationship has gathered great momentum from business-to-business links over the last decade. Says Anatol Lieven of the New America Foundation in Washington, "India's abandoning of its social democratic economic model, derived from the Nehru period, in favor of globalization and free market economics has made it much more attractive to investment and ideologically sympathetic to the US." Indeed, the more the two countries deepen their economic interdependence, the more each will have a stake in the other. And this economic interdependence can deepen, says Stephen P. Cohen of the Brookings Institution, through the removal of obstacles to US investments. "Infrastructure, (inadequate) liberalization, and education are three real obstacles. These (improvement in the three areas) will make it easy to implement the strategic relationship."

That India matters to the US is no longer a promise of the future. At a recent conference, former state department official Walter Andersen pointed out two US decisions that underscored India's enhanced importance. First, the four-country tsunami relief efforts involving the navies of the US, Japan, Australia and India. Two, the Bush administration's efforts to exempt a nuclear-capable India from exports restrictions on nuclear and dual use technology.

The blossoming ties have enabled significant partnerships in the international arena too. India has supported the war on terror in Afghanistan; its navy protected high-value US cargoes through the Straits of Malacca; more recently, India voted with the US at the International Atomic Energy Agency to declare Iran in "non-compliance" with the nuclear Non-Proliferation Treaty.

All this doesn't mean the US and India will automatically collaborate on every problem dogging them. "Nobody expects a perfect alignment ever, but increasing alignment is something we hope will come naturally," says Schaffer. Partly this alignment can be brought about through changes in the conduct of foreign policy. For instance, the US, Hathaway admits, needs to recognize that India expects to be treated on a basis of equality. Similarly, Khilnani contends, a section of Indian political elites need to shed its instinctive anti-Americanism. "This does not mean renouncing a critical position, or an independent assessment of our own interests. It means engaging more deeply and confidently, and picking battles more selectively and prudently," he says.

Obviously, like any two countries, there will be disagreements. "Indeed, there have been over the past few years on a number of issues, including the war in Iraq," says Inderfurth. But, he adds optimistically, "the fact that this has not disrupted the upward trajectory of our relationship is a good sign and a promising one for future relations."