Gas Crisis, 2009 – Where did it leave us? (cont’d)

I promised to keep you au courant with the latest news on energy strategy from the European Parliament, brought to me by Bill Newton Dunn, British Liberal Democrat MEP, following last week’s plenary session in Strasbourg. So here you go:

As expected, energy policy was one of the main topics on the agenda and the MEPs debated on increasing the EU’s future security of supply by establishing and maintaining minimum stocks of the most important petroleum products. The EP also encouraged energy security by reorganising the European internal energy market (e.g. by European transmission system operator and the creation of a single European gas grid) and further developing of the external energy relations (e.g. cooperation with the countries of the Mediterranean region, North Africa and Middle East). The long-term goal is generating alternative forms of energy, which is tightly related to the EU’s integrated policy on climate change.

So, where is Russia in this picture, Mr Dunn?

We won’t be able to do enough to get away from Russia entirely. The thing about Russia is – it’s our neighbour, therefore the EU needs to be in good relations with Russia. Russia’s problem is that it used to be a super power but suddenly with the collapse of the Berlin Wall, everybody who was in the Soviet Union escaped as far as they could. Many countries joined the EU, some of them are still waiting to join – that left Russia in great pain. I think Mr Putin’s trying to resurrect Russia’s pride… and one weapon is oil and gas, and other mineral reserves. But they are our neighbour, we need their supply, they need customers – we are bound together and therefore we have to find a good relationship. And if we can find a good relationship (I can assure you that the Parliament and the Commission are very concerned about this and there are a lot of discussions how to do it), then we can form a very good partnership and then we won’t have to fear that Gazprom would suddenly say “sorry it’s the coldest day of winter, we’re turning off the gas today” – which is brutal, but quite a strong weapon, and this is not how a good neighbour behave.

Which brings us back to the question so clearly elaborated by Bronwen Maddox, Chief Foreign Commentator of The Times: Is the gas crisis after all a Putin masterclass in how to lose friends and alienate neighbours?

The above might be valid for some neighbours, but one of the old comrade-countries stood out. 

Bulgarian President Georgi Parvanov last week met with his Russian counterpart, Dmitry Medvedev to discuss the future of the gas supply agreement between the two countries and a compensation for gas Bulgaria failed to obtain from Russia during the supply crisis in January.

Oddly enough, while it became clear that any compensation is out of the question, Parvanov launched the Year of Bulgaria in Russia during his trip. Apparently old habits (and old friendships) die hard.

In the end, the only thing agreed upon was a removal of the intermediary Overgas Inc from the supply chain, following the example set by the removal of RosUkrEnergo from Russia - Ukraine. After all, a small victory is better than nothing, one might say.

A quick reminder: Bulgaria was the country affected the most by the gas crisis as all its supplies come from Russia via a pipeline crossing Ukraine and the country has no access to alternative pipeline routes. Bulgaria’s state gas monopoly Bulgargaz, estimated its direct losses from undelivered Russian gas in January at €15.5 million.

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4 Responses to “Gas Crisis, 2009 – Where did it leave us? (cont’d)”

  1. What seems to me really funny is how the EP is considering now getting Russia on board of one of its most strategic projects that had an opposite initial aim (of decreasing dependency on Russian gas) - the Nabucco project. I do understand the need for diplomacy in relationship to Russia, but making such a huge leap is totally dubious.

    Find more info here: http://www.euractiv.com/en/energy/eu-debates-inviting-russia-join-nabucco/article-179060

  2. Tanja says:

    And here we are: what would mr. Barroso chose: human rights or diplomacy?

  3. Nikola RICHTER Nikola says:

    Barroso might say: Energy security, folks. And dependency on Russia does not seem so bad anymore.

    I am always wondering, why there is not a huge leap for green energies in European politics, on national and European levels. Only this would make us independent. From 1995 to 2005 EU dependency on gas has risen by 9 percent. Have a look here, how dependent all European countries are on gas. http://www.eurotopics.net/en/magazin/magazin_aktuell/gas_2009_01/gas-abhaengigkeit-grafik/

  4. Ari RUSILA Ari RUSILA says:

    On November 2008 - after Georgia conflict - energy game rise again on the table of European politics. EU launched its Power supergrid plan, which is partly designed to decrease EU’s dependence about Russian gas.

    The core of the plan could be described as follows:

    “The building blocks of the proposed supergrid would be new cables linking North Sea wind farms, and a network patching together the disparate electricity grids of the Baltic region and the countries bordering the Mediterranean, according to a blueprint drawn up by the European Commission. EU states will also be asked to pay for at least two ambitious gas pipelines to bring in supplies from Central Asia and Africa. The plans also call for a Community Gas Ring, or a network allowing EU countries to share supplies if Russia turns off the taps.”

    More about plan in timesonline - address http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5142622.ece and my article about EU-Russia powergame in address http://arirusila.wordpress.com/2008/11/14/powergame-in-eu-russia-summit-today/