EU Should Reassess Energy Policy Toward Russia

Given the meager results of Europe’s policy of confrontation with Russia, it should focus on developing its internal market.

Earlier this month, Russian president Dmitri Medvedev formally announced the construction of a natural gas pipeline to Germany by energy giant Gazprom. A month earlier, he predicted that “demand for ‘blue fuel’ will keep rising. It’s a natural law,” he said.

The Nord Stream pipeline, which will bring up to 55 billion more cubic meters of natural gas to Europe every year, bypasses non-European Union transit countries as well as the Baltic states and Poland. At the same time, Moscow is exploring the possibility of coming to a joint venture between Gazprom and Ukraine’s state-owned Naftogaz, probably ruling out European participation in the Ukrainian energy sector in the years to come. Lastly, Italy and Russia revived plans for a South Stream project this month that will run in direct competition with the Nabucco pipeline which is to stretch from the Caucus through Turkey and the Balkans to Austria.

The European Union originally opposed these enterprises, wary of Russia’s growing predominance in its supply of natural gas. A series of disputes between Russia and Ukraine between 2005 and 2009 culminated in parts of Europe suffering shortages — a situation no European leader wants to see repeated.

But even the Nabucco project is subject to Russian interference. President Medvedev had to intervene in a pricing dispute between Azerbaijan and Turkey before construction of the pipeline could get underway. Turkey has also been pursuing a strategic partnership with Russia which casts further doubt in Brussels about the country’s commitment to meet Europe’s energy demands. At World Politics Review, Andrea Bonzanni notes that even if Nabucco manages to reduce Europe’s dependence on Russian gas, “Moscow’s grip on the Eurasian energy network would still be tight by virtue of its close relations with a vital transit country such as Turkey.”

Bonzanni proposes that Europe reassess its energy policy. It missed opportunities in Georgia and Ukraine to draw former Soviet republics into the Western camp. Alternatives to Russian gas will come available, like a pipeline connecting Algeria and Italy and a solar energy park to be constructed in North Africa. But for the time being, Russia is likely to remain an enormous supplier of natural gas. “Trying to guarantee security of supplies by battling with Russia for influence in the post-Soviet space is a costly strategy,” he warns.

Given the meager results of Europe’s policy of confrontation, Brussels should focus on internal developments instead, creating an integrated energy market while promoting alternative resources. “Another option,” writes Bonzanni, “is to pursue proposals to regulate gas trading, such as the Global Energy Compact, a Russian version of the rejected European Energy Charter that has been repeatedly promoted by Medvedev.”

Such steps may be regarded as admissions of defeat in Brussels. Considering Russia’s ongoing efforts to dominate energy supply, however, “it might be preferable to stubbornly maintaining its current losing policy.”