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Congress Examines Nabucco Pipeline and World Energy Supply

U.S. lawmakers are taking a closer look at how the control of energy supplies influences global affairs. At a hearing in Washington, Senators were especially interested in the planned Nabucco gas pipeline running from Turkey to Europe.

The chairman of the Senate Foreign Relations Committee, Democrat John Kerry, says more attention must be paid to the state of the world's energy suppliers when considering U.S. foreign policy.

"There is a striking overlap between the world's sources of energy and the world's sources of instability, and we need to take note of that carefully," Kerry said. "Iran, Iraq, Sudan Russia, the Caucasus, Nigeria, Venezuela are all on the frontlines of our energy supply challenges, but also the fault lines of our geopolitics."

Kerry said the likelihood that oil and natural gas prices will rise in coming years will make matters worse. The solution, he said, is opening up new energy sources and transport routes to limit any one country's dominance over the market.

The ranking Republican on the committee, Richard Lugar, has taken a lead role on the issue. He was in Turkey earlier this week for the signing of the Nabucco pipeline deal - an agreement to develop a natural gas route from Turkey to Europe that could ease European dependence on Russian gas.

He says one of the unexpected beneficiaries of the deal is Iraq, which could supply up to half of the gas for the Nabucco project. He said the country could use the money for reconstruction from the war.

"Ideally, in the way of the world, the natural gas - and maybe in due course oil supplies - coming out of a united Iraq might provide this kind of capital, which would be a miraculous happening and a wonderful ending to a very tragic period in their history," Lugar said.

While the possibilities for Iraq are appealing to U.S. lawmakers, the potential that Iran could also benefit from the pipeline, as a possible supplier, raised concerns.

Richard Morningstar, the State Department's Special Envoy for Eurasian Energy, said the United States believes Iran should not benefit from Nabucco until Tehran agrees to work to resolve the dispute over its controversial nuclear program.

"This would be the absolute worst time to encourage Iran to participate in a project in Nabucco, when we have received absolutely nothing in return," he said.

Morningstar said Nabucco could be used as an incentive to get Iran to better cooperate and engage with the international community.

The hearing also focused on challenges facing the oil industry in Nigeria, where a rebel insurgency in the Niger Delta has disrupted production, threatening the country's entire economy.

A State Department official for African affairs, Phillip Carter, told the committee that the Nigerian government shares responsibility for the country's energy problems.

"The real problem for the Delta is governance. The problem of the Delta is corruption. And trying to engage the state governments is going to be key; we have started that process but have a long way to go," Carter said.

Carter said the United States is working directly with Nigerian officials and through international organizations such as the World Bank to engage state governments to get them to improve basic services, and budget transparency.