Just as Europe is in the midst of a particularly cold winter,Russia’s quasi-governmental gas giant Gazprom has turned off thegas taps to Ukraine, a major transit corridor for Russian gas intoEurope. Gas shortages are being reported in several countries,including Romania, Bulgaria, Greece, and the Czech Republic.[1]
Energy expert Dieter Helm could have had this scenario in mindwhen he described Europe’s energy policy as “a substantivefailure.”[2] The absence of competition from Europeanenergy markets has resulted in a massive dependence on Russianenergy, particularly gas. Europe gets more than 40 percent of itsgas and almost a third of its oil from Russia.[3] Gazprom has becomesynonymous with energy intimidation and has specifically targetedformer Soviet states such as Ukraine as it seeks to carve out aRussian-dominated sphere of influence in its near abroad.
Although Russia has, until now, tended to be a reliable energysupplier to Western Europe, Europe cannot afford to stand idly byand hope that Moscow will play fair in the future. This is all themore pressing considering first, that Europe’s energy dependence onMoscow is growing, and second, that Moscow has a head-start onEurope in negotiating pipeline deals that will tighten its grip onEast-West transit routes.
Europe cannot allow itself to be boxed into a corner whendealing with Moscow on important foreign policy questions (such asNATO enlargement) because it is scared of Russia turning off theenergy taps. Europe must now diversify its supply routes and seekreliable alternate sources of energy such as nuclear power. It mustalso coordinate a policy toward Russia that confronts, rather thanaccommodates, an increasingly aggressive Moscow.[4]
The Need for Diversification ofSupply
The European Commission estimates that Europe’s total imports ofnatural gas will increase from 61 percent to 84 percent by 2030.[5] Atpresent, this increase looks like it will have to be sourced fromMoscow. In the face of growing dependence on gas imports, astrategic diversification of supply makes sense. Moscow recentlyoffered to buy all Azeri gas in what can only be seen as an effortto monopolize the market.[6] Presently, oil and gas are available fromEurope’s neighbors other than Russia, despite Moscow’s bestattempts to corner the market. Azerbaijan has not yet acceptedMoscow’s offer, and Europe, in coordination with the United States,must take this opportunity to counter Russia’s monopolisticambitions by engaging the energy producers of the Caspianbasin.
However, even with the availability of alternate suppliers, thequestion of how this gas gets to Europe remains a vexed question.Gazprom currently controls almost all of the gas pipelinessupplying Europe from its East, with 80 percent transported viaUkraine.[7] There is little doubt that Russia fearsEurope’s development of alternate East-West routes that bypassRussia, such as the Nabucco pipeline.[8] Yet this is exactly whatEurope must do if it is to realize any semblance of energysecurity. Russia has sought to use pipelines as a strategic elementin its petro-political arsenal; if it controls the transit routes,it can turn the tap off at a political whim, as it has done withUkraine in January 2006 and once again this week.
Moscow has responded to the proposed EU-backed Nabucco pipelinewith the Russia-controlled South Stream project. The Nabuccopipeline would pump Caspian gas to Europe through Georgia, Turkey,Bulgaria, Romania, Hungary, and Austria, bypassing not only Russiabut also Iran. It gives Europe an opportunity to undertake apipeline project genuinely independent of Russian interference andoffers Europe an alternative to wholesale dependence on Russian gasimports. To secure Nabucco, Azerbaijan and Turkmenistan need tomake a commitment to Europe as well. However, South Stream willroute Russian gas to the same terminal in Austria and another inItaly, intentionally undermining Nabucco’s viability.
Nabucco is a truly European project that has the long-termpossibility of importing Middle Eastern and Iraqi gas.[9]However, Europe’s commitment has wavered. In April 2008, Greecesigned onto the rival South Stream project, which is all the moreironic considering Greece is one of the countries affected byRussia’s latest maneuvers in its dispute with Ukraine.[10]This will be a critical year for Nabucco’s advancement orabandonment, and Europe should not underestimate the negativeramifications of discarding this key infrastructure project.
Russia sent Europe a very powerful message in August when itillegitimately and immorally invaded Georgia. It sent Europe themessage that in seeking alternate energy-supply routes, Russia canchallenge stability and security in its backyard and challengeWestern confidence in non-Russian energy projects. Russian bombsfell perilously close to the Baku-Tbilisi-Ceyhan (BTC) pipeline,which pumps oil to Europe through Baku (Azerbaijan), Tbilisi(Georgia) and Ceyhan (Turkey). Russia vehemently opposed the BTCpipeline before it became operational in May 2006, much as itopposes Nabucco. Moscow seeks dominance through a monopoly and bybypassing countries it deems less friendly to Russianinterests.
As Europe weighs up the pros and cons of Nabucco over SouthStream, it must not be tempted to accommodate Russian aggression byfavoring South Stream for fear of Russian interference in theNabucco project. EU Commissioner for Energy Andris Piebalgs statedthat the Russian-Georgian war gives more impetus, not less, torealizing Nabucco.[11] However, Europe has plunged headlong intorestoring business as usual with Russia, led by France and Germany,who use the EU as a cosmetic cover to jealously protect valuablebilateral deals with Moscow. As British journalist Simon Tisdallstates: “Without so much as a blush, Europe is putting itspolitical, commercial and energy interests before itsresponsibilities to collective security.”[12] If Europe is serious aboutseeking alternate energy suppliers, it is sending the wrong signalsto Moscow.
American leadership will be vital to reversing Europe’scollective weakness. The BTC pipeline and the Baku-Tbilisi-Erzurumgas pipeline (which pumps gas from Azerbaijan to Turkey) were bothconstructed with “unequivocal U.S. support.”[13] The incomingObama Administration should continue to lead in this policy area,specifically by cooperating with Europe and the South Caucasus todiversify Europe’s energy portfolio and by supporting U.S. alliessuch as Georgia and Ukraine as they develop their fragiledemocracies.
Focus on Energy Security
The EU’s obsession with making ever-bolder promises on cuttingcarbon emissions has resulted in a European energy policy that isfar too focused on unrealistic targets to address climate change atthe expense of seriously addressing energy security. The EU hasmade reckless assumptions about the reliability of unprovenrenewable energy sources, such as wind power, without carefulenough attention to the benefits of proven technologies such asnuclear energy. For instance, the British Wind Energy Associationwas recently forced to admit that the carbon-cutting benefits ofwind power have been grossly overstated.[14]
The pursuit of a low-carbon economy will continue to be aEuropean conundrum so long as the EU simultaneously repudiatesnuclear energy, which The Economist describes as “thebiggest source of low-carbon energy in the EU.”[15] The EU proposalto cut carbon emissions by 20 percent by 2020, compared with 1990levels, is unlikely to be achieved without a greater energy mixthat at least includes nuclear power.
Europe should also diversify its sources of natural gas. First,it can pipe more gas from North Africa. Second, it can expand itsnetwork of the liquefied natural gas (LNG) terminals to importenergy from major suppliers such as Qatar and Nigeria. It can alsoexpand and upgrade the coal-fired power stations. Natural gas,although clean, cannot be the only strategy for Europe to pursueits 2020 policy.
Apart from the fact that diversifying suppliers and routes willtake time, it would be incredibly unwise to put all European eggsin one energy basket. The International Energy Agency, reporting onEU energy policy, recommended the continued use of nuclear power torealize European energy goals, and a more diversified energyportfolio will certainly be needed if Europe is to even come closeto having sustainable and clean energy supplies in the long term.[16]
It should not be assumed that increasing EU power in the fieldof energy is a silver-bullet solution either. The as-yetun-ratified Lisbon Treaty would create an energy solidarity clause,although there are currently no plans as to who will supply what inthe event of an actual crisis.[17] There are also plans tocreate a “high official for foreign policy on energy security” whowill work under a future EU foreign minister.[18] Neither of theseinitiatives takes the European energy debate forward in aparticularly useful way. Although greater European cooperation andsolidarity is desperately needed to confront Russia, this must beconducted on an intergovernmental rather than supranational basis.The indecent haste with which the EU resumed business with Russiafollowing its illegal annexation of South Ossetia and Abkhazia(contrary to an EU-negotiated ceasefire) demonstrates the folly ofallowing the EU to dictate members’ policies toward Russia.
All the Eggs in One Basket
Western Europe seems comforted by the fact that Russia currentlyneeds it as a customer as much as Europe needs Moscow’smerchandise. This confidence is misplaced, however, as demonstratedby Gazprom’s latest actions with regards to Ukraine. Codependencyhas not fostered a healthy relationship between Russia and Europeso far, and there’s little reason to expect that it will in thefuture. Europe’s over-reliance on Russian energy is a fundamentalstrategic weakness. In the event that Europe continues to increaseits dependence on Moscow, it will once again find itself literallyleft out in the cold.
Sally McNamara is SeniorPolicy Analyst in European Affairs in the Margaret Thatcher Centerfor Freedom, a division of the Kathryn and Shelby Cullom DavisInstitute for International Studies, at The Heritage Foundation.The author is grateful to Morgan L. Roach, Research Assistant inthe Thatcher Center, for her assistance in preparing this paper.She is also grateful to Ariel Cohen, Ph.D., Senior Research Fellowin the Davis Institute, for his advice.
Europe Should Reduce Dependence on Russian Energy and Develop …