Rekindling old flames
Published: 08 April, 2009
As a report published last November by the European Council on Foreign Relations notes, dependence on Russian gas has probably been overstated for most of the EU’s membership. Russian gas makes up only 6.5 percent of Europe’s primary energy supply, and the major economies have already attained a certain level of diversification.
Many economies are oil-based, and although some do import significant quantities of oil from Russia, the fungible nature of the commodity – it is less volatile and easier to ship and store – means that alternative supplies would be easier to acquire elsewhere. Furthermore, Russia’s share of gas imports to Europe has fallen relative to other exporters. A politicised Russian gas monopoly does not, the report notes, constitute a real danger to the energy security of the EU as a whole, only to isolated nations in the former Soviet states closest to Russia.
Whether or not Gazprom is, as is widely accepted, a foreign policy tool of the Kremlin, assuming that there are two, ideologically counterbalanced players in this game is a gross oversimplification, and obfuscates one of the EU’s major challenges in formulating an energy security policy.
As Ms Hadfield says: “The EU is unable at this point to pull energy into the realm of supranational policy. While it still remains a national policy area, they cannot prevent countries like Germany from signing North Sea pipeline deals with Russia. Even if Russia had purely separated its politics from its economic and energy sectors, you would still be getting 25, now 27 separate bilateral deals signed from the EU on the one side – the European countries as private actors – and the Russians on the other.”
The EU’s promotion of the Energy Charter Treaty, which is designed to open up energy markets for private enterprise, theoretically promotes a liberal approach. But, by also trying to draw energy policy into supranational structures, and by courting other national oil companies and economies that have very similar structures to Gazprom, the union’s approach has a certain duality.
“They’re liberalising on one hand, but on the other they’re busy trying to set up these supra-regulatory structures,” Ms Hadfield notes. “It may not be commercial monopolisation, but it’s a sort of governmental monopolisation, where you have a very small number of actors, which are supposed to be private enterprise. So the EU has gone one way, but it’s not exactly the mirror image of what Russia is, it’s just a slightly different shift of emphasis.”
Russia’s energy diplomacy, which now extends from the North Pole to the Sahara, looks hazardous to those that, for close to half of the 20th century, lived in the shadow of a perceived threat of the old Soviet superpower, and while post-Soviet Russia had been resurgent politically and economically over the past few years, it is by no means untouched by the economic crisis.
Its markets have fallen and its government revenues are down. Its ability to spend its way to continued preeminence in European energy supply is severely diminished and, as Ms Hadfield says, it is important to remember public statements by the union about its desire to shift its energy sources away from Russia, particularly in a time of crisis, pose a threat to Moscow’s continued economic buoyancy.
“While the EU is adventurously looking to North and West Africa, it has to bear in mind that that very movement in and of itself is something of an energy security dilemma to Russia,” she says.
