II 

113TH CONGRESS 

2D SESSION S. 2433 

To provide assistance to Ukraine to reduce the dependence of Ukraine on 

imports of natural gas from the Russian Federation, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 5, 2014 

Mr. MARKEY introduced the following bill; which was read twice and referred 

to the Committee on Foreign Relations 

A BILL 

To provide assistance to Ukraine to reduce the dependence 

of Ukraine on imports of natural gas from the Russian 

Federation, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Ukrainian Independ5 ence from Russian Energy Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 

8 (1) Ukraine is dependent on natural gas sup9 plies from the Russian Federation to meet more 

10 than half of demand in Ukraine. 

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1 (2) Entities owned by the Government of the 

2 Russian Federation have manipulated natural gas 

3 supplies and prices in Ukraine in order to gain geo4 political leverage over Ukraine and neighboring 

5 countries of Ukraine. 

6 (3) Energy subsidies provided by the Govern7 ment of Ukraine amount to roughly 8 percent of the 

8 gross domestic product of Ukraine and make energy 

9 markets opaque, inefficient, and susceptible to cor10 ruption. 

11 (4) Ukraine is the second-least energy efficient 

12 country in the world. 

13 (5) The International Energy Agency has esti14 mated that if the economy of Ukraine were as en15 ergy efficient as the average country in Europe, 

16 Ukraine would reduce natural gas consumption by 

17 greater than 50 percent. 

18 (6) The level of savings from the reduction de19 scribed in paragraph (6) could nearly eliminate the 

20 dependence of Ukraine on imports of natural gas 

21 from the Russian Federation. 

22 (7) The World Bank Group has estimated that 

23 Ukraine could reduce the amount of natural gas 

24 used for heating by 50 percent through efficiency 

25 measures. 

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1 (8) On April 25, 2014, a coalition of 35 cities 

2 in Ukraine sent a letter urgently requesting assist3 ance in increasing the energy efficiency of their 

4 buildings, district heating systems, and transpor5 tation networks in order to reduce dependence on 

6 imports of natural gas from the Russian Federation. 

7 (9) A $17,000,000,000 loan package from the 

8 International Monetary Fund to help stabilize the 

9 economy of Ukraine requires reforms of energy mar10 kets in Ukraine and includes provisions to gradually 

11 eliminate energy subsidies, which will raise retail 

12 natural gas rates by 56 percent in 2014, 40 percent 

13 in 2015, and 20 percent in 2016 and 2017. 

14 (10) Absent large reductions in energy con15 sumption, the rate increases mandated by the Inter16 national Monetary Fund loan package from the 

17 International Monetary Fund could have devastating 

18 impacts on low-income households in Ukraine. 

19 (11) Ukraine is estimated to have significant 

20 conventional and unconventional oil and gas re21 serves, which are mostly untapped. 

22 (12) The International Energy Agency has esti23 mated that Ukraine possesses natural gas reserves 

24 of approximately 5,400,000,000,000 cubic meters, 

25 although the annexation of Crimea by the Russian 

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1 Federation may impact Ukraine’s recoverable oil and 

2 gas reserves. 

3 (13) Exports of liquefied natural gas from the 

4 United States to Ukraine would not provide assist5 ance for Ukraine in the short term and would be un6 likely to reach Ukraine in the long term because— 

7 (A) of natural gas global market dynamics; 

8 (B) there are no liquefied natural gas im9 port facilities in Ukraine; and 

10 (C) the Government of Turkey has indi11 cated it would block shipments of liquefied nat12 ural gas through the Bosphorus Strait because 

13 of safety concerns. 

14 SEC. 3. POLICY ON SUPPORTING ENERGY INDEPENDENCE 

15 OF UKRAINE. 

16 It is the policy of the United States to use all re17 sources of the United States Government— 

18 (1) to coordinate with multi-donor efforts to re19 form energy subsidies provided by the Government 

20 of Ukraine and energy markets in Ukraine; 

21 (2) to encourage private sector investment in 

22 the energy sector of Ukraine; 

23 (3) to protect low-income households in Ukraine 

24 from dramatic increases in energy rates; 

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1 (4) to increase transparency and reduce corrup2 tion in the energy sector of Ukraine; 

3 (5) to improve energy efficiency, increase do4 mestic energy supplies, and develop alternative 

5 sources of energy in Ukraine in order to reduce the 

6 reliance of Ukraine on energy from the Russian Fed7 eration; and 

8 (6) to increase the capacity of agencies of the 

9 Government of Ukraine, nongovernmental organiza10 tions, and private entities to administer and manage 

11 energy efficiency and energy security-related projects 

12 in Ukraine. 

13 SEC. 4. ASSISTANCE FROM THE UNITED STATES AGENCY 

14 FOR INTERNATIONAL DEVELOPMENT. 

15 (a) IN GENERAL.—The Administrator of the United 

16 States Agency for International Development shall, in fis17 cal years 2015 through 2017— 

18 (1) prioritize, to the extent feasible, the provi19 sion of direct assistance to Ukraine to improve en20 ergy efficiency, increase energy supplies produced in 

21 Ukraine, and reduce reliance on energy imports from 

22 the Russian Federation through measures described 

23 in subsection (b); and 

24 (2) through the Development Credit Authority, 

25 make loan, lease, and bond guarantees to appromstockstill on DSK4VPTVN1PROD with BILLS

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1 priate financial institutions and other eligible bor2 rowers to facilitate the involvement of such institu3 tions and other borrowers in financing and expand4 ing efforts in Ukraine to improve energy efficiency, 

5 increase energy supplies produced in Ukraine, and 

6 reduce reliance on energy imports from the Russian 

7 Federation through measures described in subsection 

8 (b). 

9 (b) MEASURES DESCRIBED.—The measures de10 scribed in this subsection include— 

11 (1) replacing inefficient boilers; 

12 (2) upgrading district heating systems; 

13 (3) improving metering and measurement sys14 tems for natural gas use and heating; 

15 (4) upgrading natural gas and heat distribution 

16 systems, including pipes that leak or are poorly insu17 lated; 

18 (5) improving the efficiency of buildings; 

19 (6) reducing losses in natural gas transmission 

20 systems; 

21 (7) improving the efficiency of compressor sta22 tions; 

23 (8) improving efficiency in the industrial sector; 

24 (9) legal and regulatory support focused on nat25 ural gas and electricity market rules, regulations, 

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1 and transparency, developed in accordance with the 

2 terms of the stand-by arrangement between the 

3 International Monetary Fund and Ukraine, approved 

4 in April 2014; 

5 (10) support for structuring of gas and elec6 tricity markets with cost-reflective pricing, developed 

7 in accordance with the terms of the stand-by ar8 rangement; 

9 (11) encouraging greater natural gas and elec10 tricity interconnections between Ukraine and neigh11 boring countries; 

12 (12) developing renewable sources of energy; 

13 and 

14 (13) developing energy transmission, refining, 

15 and storage facilities. 

16 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 

17 authorized to be appropriated to the Administrator of the 

18 United States Agency for International Development 

19 $10,000,000 for each of fiscal years 2015 through 2017 

20 to carry out this section. 

21 SEC. 5. ASSISTANCE FROM THE DEPARTMENT OF STATE. 

22 (a) IN GENERAL.—The Secretary of State shall, in 

23 fiscal years 2015 through 2017, coordinate the activities 

24 of United States agencies related to the energy sector of 

25 Ukraine and prioritize, to the extent feasible, support and 

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1 technical assistance to increase responsible production in 

2 and transparency of the natural gas sector in Ukraine 

3 through measures that include— 

4 (1) resource and technology assessments; 

5 (2) evaluation of production capabilities; 

6 (3) economic assessments of potential resources; 

7 and 

8 (4) dissemination of international best practices 

9 and provision of legal and regulatory information 

10 and guidance to help establish energy policies that— 

11 (A) protect public health and safety; 

12 (B) protect the environment; 

13 (C) effectively manage royalties and rev14 enue; and 

15 (D) increase transparency and reduce cor16 ruption. 

17 (b) AUTHORIZATION OF APPROPRIATIONS.—There is 

18 authorized to be appropriated to the Secretary of State 

19 $2,500,000 for each of fiscal years 2015 through 2017 

20 to carry out this section. 

21 SEC. 6. PROMOTION OF UNITED STATES PRIVATE SECTOR 

22 PARTICIPATION IN ENERGY EFFICIENCY AND 

23 ENERGY DEVELOPMENT IN UKRAINE. 

24 (a) IN GENERAL.—The Director of the Trade and 

25 Development Agency shall promote United States private 

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1 sector efforts to help improve energy efficiency, develop 

2 domestic oil and natural gas reserves, and develop renew3 able sources of energy in Ukraine by— 

4 (1) conducting and funding project preparation 

5 activities, feasibility studies, technical assistance, 

6 pilot projects, reverse trade missions, conferences, 

7 and workshops; and 

8 (2) providing any other assistance that the Di9 rector considers appropriate to promote such efforts. 

10 (b) AUTHORIZATION OF APPROPRIATIONS.—There is 

11 authorized to be appropriated to the Director of the Trade 

12 and Development Agency $1,000,000 for each of fiscal 

13 years 2015 through 2017 to carry out this section. 

14 SEC. 7. SUPPORT FROM THE OVERSEAS PRIVATE INVEST15 MENT CORPORATION. 

16 The Overseas Private Investment Corporation shall— 

17 (1) prioritize support for investments to help in18 crease energy efficiency, develop domestic oil and 

19 natural gas reserves, and develop renewable sources 

20 of energy in Ukraine; and 

21 (2) implement procedures for expedited review 

22 of and, as appropriate, approval of, applications by 

23 eligible investors (as defined in section 238 of the 

24 Foreign Assistance Act of 1961 (22 U.S.C. 2198)) 

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1 for loans, loan guarantees, and insurance for such 

2 investments. 

3 SEC. 8. SUPPORT FROM THE EXPORT-IMPORT BANK OF 

4 THE UNITED STATES. 

5 The Board of Directors of the Export-Import Bank 

6 of the United States shall take prompt measures, con7 sistent with the credit standards otherwise required by 

8 law, to promote the expansion of the financial commit9 ments of the Bank under the loan, guarantee, and insur10 ance programs and special financing programs of the 

11 Bank for projects to improve energy efficiency, develop do12 mestic oil and natural gas reserves, and develop renewable 

13 sources of energy in Ukraine. 

14 SEC. 9. PRIORITIZATION OF ENERGY EFFICIENCY AND DO15 MESTIC ENERGY PROJECTS IN UKRAINE BY 

16 THE WORLD BANK GROUP AND THE EURO17 PEAN BANK FOR RECONSTRUCTION AND DE18 VELOPMENT. 

19 The President shall direct the United States Execu20 tive Directors of the World Bank Group and the European 

21 Bank for Reconstruction and Development to use the 

22 voice, vote, and influence of the United States to encour23 age the World Bank Group and the European Bank for 

24 Reconstruction and Development and other international 

25 financial institutions to invest in, and increase their efforts 

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1 to promote investment in, projects to improve energy effi2 ciency, develop domestic oil and natural gas reserves, and 

3 develop renewable sources of energy in Ukraine, and to 

4 stimulate private investment in such projects. 

5 SEC. 10. EFFECTIVENESS MEASUREMENT. 

6 In providing loan guarantees, assistance, and support 

7 pursuant to this Act and in prioritizing the projects de8 scribed in this Act, the President and the heads and other 

9 appropriate officials of the United States Agency for 

10 International Development, the Trade and Development 

11 Agency, the Overseas Private Investment Corporation, and 

12 the Export-Import Bank of the United States shall ensure 

13 that the effectiveness of such guarantees, assistance, sup14 port, and projects is measured through the use of clear, 

15 accountable, and metric-based targets aimed at achieving 

16 enhanced energy security for Ukraine. 

17 SEC. 11. BRIEFING ON ALTERNATIVE PIPELINE ACCESS 

18 AND SUPPLIES FOR UKRAINE. 

19 Not later than 30 days after the date of the enact20 ment of this Act, the Secretary of State shall provide to 

21 the Committee on Foreign Relations of the Senate and 

22 the Committee on Foreign Affairs of the House of Rep23 resentatives a briefing on— 

24 (1) the economic and political viability of trans25 porting natural gas supplies into Ukraine from counmstockstill on DSK4VPTVN1PROD with BILLS

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1 tries other than the Russian Federation through the 

2 reversal of existing pipeline flows or through new or 

3 expanded pipelines; and 

4 (2) the potential to reduce natural gas con5 sumption in Ukraine through efficiency measures or 

6 through the use of alternative sources of energy. 

Æ 

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