The great energy game

Article published on April 24, 2006
community published
Article published on April 24, 2006

This article has not been vetted by an editor at Paris HQ

Climate change, rising prices and an insecure supply have recently drawn Europe into an escalating energy crisis, and spurred the EU into a radical overhaul of energy policy

Europe is unlikely to forget the first months of 2006. On January 1, Russia turned off the gasp tap to the Ukraine and massively disrupted gas supplies in a large part of Europe. One of the gravest moments in an enduring energy crisis, this was a sharp reminder from Vladimir Putin not just to Kiev, but to all of Europe, of its vulnerability to Moscow's power politics.

Europe’s geo-political Achilles heel, its dependence on Russian energy restricts its room for manoeuvre at the Eastern border, the middle ground that hangs between the European and Russian spheres of influence. In this already undiplomatic game, Vladimir Putin plays his wild card and Europe, which by 2020 could be importing 70% of its gas, has little in response.

A New Common Strategy

An EU green paper on energy outlines a possible response to our current energy situation. A heavy emphasis is laid on conserving energy through increased use of biofuels and renewable resources, and the construction of more efficient power stations. The target for these reforms is a reduction in EU energy use of 20% by 2020. This would be combined with the liberalisation of the energy market and the establishment of a pan-European energy network in place of the current bilateral agreements between single nations. Then all of this will be overseen by the newly formed European Energy Supply Observatory.

The need to review energy production and distribution in Europe again came to the foreground at the spring summit in March. The discussions were centered on the development of a common energy policy, which included improved general efficiency in the production and consumption of energy (with a target of 25% from renewable resources).

The meeting in March between EC president José Manuel Barroso and Vladimir Putin epitomised the differing stances of the EU and Russia towards energy. While the Russian leader guaranteed his ‘fidelity’ as energy supplier, he refused to allow any access to Russian pipelines importing gas from central Europe. Nor could he be persuaded to ratify a proposed charter involving the opening up of the Russian market to European investors. Russian giant Gazprom remains firmly in state hands, and while Putin has guaranteed Europe a secure energy supply, the monopoly will not be relinquished.

The Difficult Road to the East

Europe is now looking for a way to escape Putin’s grasp. In the hunt for new partners, one proposal includes a 3,400 kilometre gas pipeline connecting the South-Eastern part of the continent with the Caspian sea, thus bypassing the Ukraine and the long arm of Russia. Other international partners could include Kazakhstan, Turkmenistan, and Uzbekistan. These states are already being courted by Putin and he has promised them a Caspian gas pipeline. Russian dominance, it seems, is here to stay.

In Germany, meanwhile, construction is beginning on a 1,200 km long gas pipeline across the Baltic Sea, directly connecting German and Russian territory, side-stepping Poland. The Polish Prime Minister Lech Kaczyinski has described the line as “a project that deeply contradicts Polish interests. We are allies of Germany both in NATO and the EU, so why is this pipeline bypassing Poland?”

And in the background, some claim that North Sea gas and oil are running out whilst consumption is increasing by 1-2% per year.

Impervious to the crisis our nations continue fighting amongst themselves. They allow the old monopolies and their magnates to flourish and avoid rethinking the energy market. It’s a simple equation: if the principle of divide and conquer goes in international politics, our internal divisions are the perfect gift to the ‘all conquering’ Putin.