Rice to Appoint Special Envoy for Energy Issues in Face of Growing International Conflict

Secretary of State Condoleezza Rice said Wednesday she will appoint a special envoy for energy issues to deal with the use of oil and gas for political means, particularly in Central Asia.

Her comments to a congressional committee come amid threats from Venezuela to cut off oil exports to the United States as well as several incidents in which Russia has or threatened to cut off gas supplies to some of its neighbors, most recently Ukraine.

"It is a really important part of diplomacy, in fact, I think I would go so far as to say that some of the politics of energy is warping diplomacy in certain parts of the world," Rice told the Senate Foreign Relations Committee.

"I do intend to appoint, and we are looking for, a special energy coordinator who could especially spend time on the Central Asian and Caspian region," she said. This person would also focus on increasing instability in world energy markets.

Rice spoke in response to a question from Sen. Richard Lugar, R-Ind., who asked her about progress made on establishing such a post that was called for in legislation approved last year.

"Russian foreign policy is now largely based on maximizing the political leverage and financial earnings of its energy supplies and dominating the transport of energy in Eurasia," Lugar said. "Moscow continues to use energy to extort its neighbors."

Russian and Ukrainian leaders agreed Tuesday to settle a dispute over Ukraine's gas debt, avoiding a threatened cutoff in supplies that had rattled consumers in the European Union.

Meanwhile, Venezuela's state-run oil company SA has halted sales of crude to Exxon Mobil Corp., which is challenging the nationalization of its oil ventures in the country with a court bid to freeze billions of dollars in Venezuelan assets.

In response, populist Venezuelan leader Hugo Chavez has threatened to cut off all oil supplies to the United States.