Seeking alternatives to Russian gas: the EU fighting its dependency



from rt.com

by Marco Quaglia

Brussels - The beginning of Juncker’s era has seen as one of the hottest topic the re-launching of EU’s energy security strategy. In this past week, just like in the weeks to come, there is almost no committee nor public meeting where this issue is not brought into discussion. It goes without saying that the bogeyman of the whole story is Putin’s Russia.

 

During the public hearing on ‘EU Energy Security Strategy under the conditions of the Internal Market Energy Market’ at the Industry, Research and Energy Committee (ITRE), two points were stressed with strenght: 1) Russian conduct represents a threat to the EU and in particular to some of its member states; 2) lack of coordination among member states is leading to the failure of any explorative talk about the so-called Energy Union Strategy.

Dangerous scenario
Let’s take a closer look at these two points. To date, EU imports one third of its gas from Russia (61.7%); however what is happening in Ukraine, among the other things, could potentially hamper this long-distance relationship. Since the outbreak of the crisis, EU targeted Russia with seven rounds of sanctions, mainly in the oil sector. However, in Brussels no one wants to be caught by surprise; Putin’s mercurial policy is something that here, although often exaggerated, is taken extremely seriously. In fact, the question that lingers in these buildings is: what would happen if by unilateral decision, the Kremlin or Kiev, were to decide to cut off gas supplies for the Union? The University of Cologne recently made an analysis on that: by taking into account the available gas reserves, effects of an embargo would very likely hurt the EU economy - Finland after one month; Bulgaria and Poland after three; the likes of Greece, Estonia, Hungary after six; and Germany, Italy and France in nine months (University of Cologne, EWI, 2014). It goes without saying that such a drastic scenario is not very likely, since dependency is a mutual condition. Europe’s purchase of gas and oil from Russia amounted respectively to the 84% and the 61.7% of Russia’s overall export. For such a weak and problematic economy, this quota is essential to survive.

Lack of harmonization

This consideration leads directly to the second: Europe needs coordination to face this issue. In this field, in fact, Russia can decide and act within few hours, for example, it is not by chance that recently Russia has been closing astronomical deals with China to open this market to its exports. On the contrary, the EU, because of its complicated policy-making framework finds itself always in the condition to re-act to external inputs, rather than act. In addition to that, strategies at the European level and those at the national level are often contradictory. On the one hand, the Commission is looking for different routes, and different approaches to the energetic puzzle of procurement; on the other, almost all member states are increasing their dependency on Russia - Italy is top of this list.


As a matter of fact, the ambitious energy union is today just another slogan. Nuclear, fracking, renewable, etc., it is almost impossible to say what is the general trend of the Union in terms of energy policies. This situation is of course a burden whose consequences will be more and more important in the next decade; and that will put each member states, and as a consequence the EU, in a weaker position vis-à-vis supplier with the features of Russia.


Fortunately, there are also feasible ways out. A sustainable policy mix for energy must be defined, in order to improve EU’s situation both in the short and long terms. Norway, US, Iran, Qatar and Mozambique represent just some of the most interesting alternatives for EU’s energy procurement; while new, decarbonizing technologies could do the rest. What is really needed is a strong political message: only by acting as whole the Union can face energy challenges in the future.