Keeping Armenia powerful

Published: Saturday September 22, 2007

As we celebrate another anniversary of Armenia's independence - the sixteenth already - the numbers for Armenia's economic performance for the first three-quarters of this year have become available. Armenia's gross domestic product has grown 13.6 percent over last year. The year 2007 will be the seventh in a row of double-digit performance.

It was only a few years ago that this newspaper was reporting that Armenia has "no lights, no water," and that people were burning books and cutting down trees to survive the freezing winters. The economic crisis was, of course, part of the collapse of the regulated markets of the Soviet Union, and was made much worse by the aftermath of the 1988 earthquake and the economic blockade imposed by Azerbaijan and Turkey.

The immediate reason for people's suffering in the winters of 1992 and 1993, however, was the lack of energy. After the disaster at the nuclear power plant in Chernobyl, Ukraine, and in light of the earthquake, Armenia in 1989 shut down its nuclear power plant at Metsamor, 28 km west of Yerevan.

The reopening of the plant in 1995 was a first step toward Armenia's recovery. It followed extensive safety testing. In the years since its reopening, the plant has received over 100 safety and security upgrades with help from Russia, Europe, and the United States. For all that, the continued operation of the old plant in an earthquake-prone area represents an enormous risk for Armenia and the region.

The Armenian government has committed to shut down the plant in 2016. The government is meanwhile pursuing the construction of a new plant by that time.

Armenia - and all states with an interest in preempting nuclear disaster - should continue to invest in safety improvements between now and 2016. At the same time, no effort should be spared to commission the new nuclear power before 2016, making possible the early retirement of the existing plant.

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Nuclear power is only part of the solution to Armenia's energy needs. The existing plant provides 40 percent of the energy consumed in the country. The rest comes from natural gas and renewables, primarily hydroelectric power.

Russia under President Vladimir Putin has made it its business to control a growing segment of the energy resources of Europe and the former Soviet states. Even faraway Britain is concerned about its increasing reliance on fuel from Gazprom, the state-owned Russian natural gas giant.

A vast majority of Armenia's energy assets, including the nuclear power plant, are under the control of Russian interests. Russia reasonably argues that it is engaging in making money the old-fashioned way.

But the experience of Georgia, Armenia's northern neighbor, indicates that Russia is willing to use its clout to get its way politically. In response to Georgia's announcement late last year that it seeks full membership in NATO, Russia took a number of punitive measures. One step was to cancel Georgia's discount on natural gas, forcing it to pay market rates, in effect doubling the price of gas.

With continuing economic development, Armenia's energy needs will grow. As Armenia celebrates the anniversary of its independence this week, we must look hard at energy dependence. To the extent possible, Armenia must develop its ability to generate energy domestically in enterprises that are not controlled from abroad. Beyond that, it must look to diversify foreign ownership of energy resources.

Renewable energy is an important piece of the puzzle in Armenia and across the globe. Armenia will only benefit by showing leadership in this field. It must adopt favorable tariffs for the purchase of renewable energy, such as wind, that make the development of this sector economically viable. Likewise, as a matter of national security, it can and should incorporate renewable-energy elements in its rural development plans.

Efficiency and conservation are important elements of energy policy. A unit of energy saved has no down side. Immense savings are possible through the repair and replacement of inefficient transmission infrastructure and through the introduction of increasingly energy-efficient buildings, enterprises, vehicles, and the like.

Armenia's government would do well to offer incentives to consumers to use energy-efficient approaches. The private sector and humanitarian organizations involved in urban and rural development in Armenia too can look at opportunities to incorporate renewable energy and conservation components that might contribute to the long-term viability of their projects and to Armenia's security alike.

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What is important - not only for Armenia, but also for the United States and Europe - is that Armenia gets a new nuclear power plant, that it closes the old one, that the reactor selected is the one best suited for operation in Armenia, that it is properly financed, and that Armenia has a reliable source or sources of nuclear fuel for the plant's ongoing operation.

Our role in the United States is to urge the administration to take an active part in planning and financing the new plant. Doing so is in the interests of the United States.

Since the earthquake, Armenian-American advocacy groups have proven themselves effective at campaigning for humanitarian aid to Armenia. In recent years, they have been effective in campaigning for development aid as well. It is time now to work also on mutually beneficial strategic aid.  It is the U.S. national interest for Armenia to diversify foreign investment in all major economic sectors, including energy and other significant infrastructure projects.

We congratulate our readers on this happy anniversary. Let's work together to build a prosperous and independent state that we and our descendants can point to with pride.