Will January's gas crisis between Russia and Ukraine eventually lead
to a unified European energy security policy? The early signals are
BRUSSELS -- January's two-week gas shutoff following
a pricing spat between supplier Russia and transit country Ukraine could not
have taken Europeans by surprise.
In January 2006, a similar conflict between the two countries led to a similar
After that crisis, it was said time and again that Europe must become serious
about energy security, by developing and implementing a strategy of
diversification. But not very much happened -- in large part because European
countries remain divided over the lessons to be learned from the cutoff.
For one camp, the lesson of the gas crisis of 2006 was that Europe had to
decrease its dependency on Russia.
According to this view, the disruption of gas supplies did more than show the
risks of overdependency on one supplier. It also demonstrated that the Kremlin
was ready to use energy as a political weapon to regain influence in its "near
abroad" and to limit Europe's political clout. For economic as well as for
political reasons, Europe therefore urgently needed to diversify its suppliers
and become less dependent on Russia.
One way to do that would be to build a transit route that would bypass Russia --
the Nabucco pipeline. The Nabucco pipeline is supposed to stretch from Turkey to
Austria -- crossing Bulgaria, Romania, and Hungary -- and it has, in fact, the
potential to significantly lessen Southeastern Europe's dependency on Russian
A consortium of European energy companies is
involved: Botas of Turkey, BEH EAD of Bulgaria, Transgaz of Romania, MOL of
Hungary, OMV of Austria, and RWE of Germany.
Nord Stream, the most advanced of the three
projects, is supposed to cross the Baltic Sea, directly linking Russia with
Germany. South Stream, still in a very early phase, would cross the Black Sea
and end in Italy and Greece.
Different Lesson Taken
But other European countries took a different lesson from the gas crisis in
2006. For them, the problem of energy security was one not of source countries
but of transit routes. Hence, the solution would be to make the big European
customers of Russian gas less dependent on Eastern European transit countries,
namely Ukraine. The priority for this group of countries was to build new
transit routes that would bypass Ukraine and deliver gas as directly as possible
to the center and the west of Europe.
These countries -- among them Germany and Italy -- supported two projects that
have been developed in close cooperation with Russian state-owned gas company
Gazprom: Nord Stream and South Stream.
The majority partner in Nord Stream is Russia's Gazprom (51 percent), with the
German companies BASF/Wintershall and EON both owning 20 percent. The remaining
9 percent is owned by Gasunie of the Netherlands. The chairman of Nord Stream is
Gerhard Schroeder, the former German chancellor. South Stream is equally owned
by Gazprom and Italy's ENI.
Nord Stream is a controversial project. Poland, Lithuania, and Estonia have
voiced their opposition, and many other Eastern and Central European states are
equally critical. Many critics see Nord Stream as a Russian attempt to splinter
Europe. Russia would gain the ability to divide old and new members of the EU by
selectively turning off the tap. Other critics question whether Nord Stream
makes sense economically.
Whether the pipeline will be built is still an open question. There are more
potential obstacles: Sweden is currently conducting an environmental review of
the pipeline project, as the planned route of Nord Stream would go through its
waters. Finland has announced its intention to do the same next year. In view of
all the obstacles, Russian Prime Minister Vladimir Putin has declared that
"Europe must decide whether it needs this pipeline or not."
Other lessons from the 2006 gas crisis remain -- namely, the view that Europe is
vulnerable to political pressure as long as gas markets in the European states
remain insufficiently interconnected. The more European gas markets are
connected, the reasoning goes, the less individual countries would be threatened
by supply disruptions, because neighboring countries could immediately help out
when shortages occur. A single, competitive gas market would, as Pierre Noel
from the European Council on Foreign Relations has argued, help to depoliticize
There are, however, "very strong vested interests" that have to be overcome. Big
energy companies are usually opposed to liberalizing the national energy
markets, as Katinka Barysch from the Center for European Reform in London
explains. Nevertheless, the European Commission makes slow, quiet, but steady
progress in pushing the European governments to open up their national markets.
All in all, 2006 was a wake-up call in the sense that the questions of energy
security were set on the European agenda. The reactions, however, were shaped
according to national views and interests. A common, single European energy
policy did not emerge.
So, will it be different this time? Will the renewed disruption of European gas
supplies, which left millions of European citizens in the cold for more than two
weeks in one of the frostiest winters in the last decades, lead to a new push
toward a unified European energy policy? Will the European governments unite and
come to a single approach to energy, speaking with one voice to actual and
potential gas suppliers and put its political weight behind specific pipeline
The president of the European Commission, Jose Manuel Barroso, has said it is
time to get serious.
"This crisis has confirmed what we have said when we were proposing this
diversification strategy to our member states," Barroso said. "It is completely
unwise for one country to rely only on one supplier."
In his approach, Barroso is trying to build bridges between the different
European camps. Diversification means both new transit routes and new suppliers.
"By definition, diversification is part of an energy security strategy.
Diversification of countries of origin of energy, diversification of transit
routes, and, of course, diversification of the sources of energy," he said.
At the same time, however, the fight between the different camps continues.
Czech Prime Minister Mirek Topolanek, whose country currently holds the EU's
six-month rotating presidency, has recently made clear that it is now the time
to become less dependent on Russia. Europe should put its weight behind Nabucco,
because this project is "a strategic project crucial for the economic prosperity
and political independence of the whole of Europe."
The European Commission has declared that it would support the project. It has
proposed to invest 250 million euros to the European Investment Bank to help it
secure loans for the Nabucco pipeline. But this would cover about 3 percent of
the huge building costs, and does not represent the direct investment the
In order to get off the ground, analysts stress, Nabucco would need stronger
support from key EU member states, such as France and Germany.
In a recent letter to Barroso, German Chancellor Angela Merkel declared that the
EU "needs to better diversify its gas supply and transit routes." Europe, Merkel
said, should support all three pipeline projects -- Nord Stream, South Stream,
"It is of great significance," Merkel wrote, "that these projects are
politically desired and supported by all EU member states."
While Germany understandably remains focused on Nord Stream, Merkel's letter can
be seen as an offer of compromise -- a step toward a unified European position.
Jan Techau, the director of the Alfred von Oppenheim Center for European Policy
Studies in Berlin, sees Merkel's letter as an attempt to take the lead on
European energy policy by building common ground.
"All Europeans should support all three pipeline projects, as all three are
useful for Europe," Techau says in summarizing Merkel's position.
"That she puts all three projects on the same level indicates a new approach, a
new commitment. Before they have been arranged in a hierarchy, especially by
Germany," Techau adds.
Good Chance For Broad Support
With this formula -- equal political support for all three pipeline projects --
the German chancellor offers a compromise that all parties might agree on. The
formula has a good chance to get broad support at the March council, the next
meeting of the European Union's heads of state, which will see energy security
high on his agenda.
What follows from such a verbal consensus is, however, an open question.
For the time being, Nord Stream, South Stream, and Nabucco are no more than
largely unrealized projects. The pipeline game has yet to be resolved, and
whether the European summit in March will come to bold conclusions is rather
questionable, given the fact that the recent gas disruption has not led to an
end to differences of views and interests among the European member states.
At the moment at least, is looks as if Europe remains divided over its energy