On EU’s energy future
Ukraine natural gas supply was cut-off by Russia’s state-owned oil company Gazprom on Thursday. It is reported that Gazprom has reduced its natural oil export to Ukraine by 90 million cubic meters per day. That amount is approximately the average daily consumption of the country which currently is at the peak of its winter consumption.
This incident occurred after negotiation over prices and transit fees unraveled between Ukraine government and representative of Gazprom Russia.
The most disturbing issue of EU’s energy dependence is Russia’s carelessness to use pipelines as political instruments. Russian “pipeline politics” date back to 1990, when Moscow interrupted energy supplies to the Baltic States in attempt to stifle their independence movements. The energy weapon was again used against the Baltic States in 1992, in retaliation for their demands that Russia remove its remaining military forces from the region.
But the major wakeup call for the EU is the Ukrainian gas crisis in 2006. The shutdown resulted in significant supply disruptions for several member states, raising awareness that dependency on Russia has increased EU’s geopolitical vulnerability and has placed energy security to the forefront of the EU agenda.
The concern over this cut-off is now raising anxiousness among the Western European countries as Ukraine is the transit point for Russian gas export to Western Europe. If the cut-off continues, western part of the Europe will be left on a freezing winter this year. It might even cause severe damage for the industry that badly needs the gas supply for their operation.
The energy security and struggle for energy independence will always be the key problem of energy and economic policies of any state; it might be even more critical in the upcoming years.
With that kind of leverage over energy, foreign energy supplier like Russia can cut-off their energy supplies to their European counterpart anytime they want. Moreover, they can simply interrupt the supply line as a deterrent to the importing countries to impose their national interest.
This issue has been a major problem for EU foreign relation with Russia. As Russia gains their old glory by drilling their way helped by the oil-driven economy, more foreign policy clash occurred with the EU as well as US.
The unavoidable fact for Ukraine, as well as other European countries, is that Russia with its abundant oil and gas resources has become major supplier for the region. While Russia is not a traditional ally of the Europe, there are concerns that Russia will use this energy leverage as a political instrument to influence the region with its own political agenda.
The latest outbreak in South Ossetia was an obvious example of how EU could not conduct its foreign policy effectively. No firm action towards Russia at that time, presumably because of the energy dependency issue.
Energy has now become one of the most high-profile tradable goods in world market. It is now a state’s major concern. Competition to secure strategic energy asset is a must. States will have to strive to get energy sources, whatever the cost is.
For EU, this will only leave them with two options: to be energy independent, or jeopardizing its foreign policy by keeping the energy dependency.
[Image taken from here]
energy issue nowadays not only about the energy itself but also significantly related with geopolitics. thats why I think that energy Independence is a must for such country. like in indonesia where we have enormous number of natural gas, but still the folks is queuing up kilometers for a 3kilos of LNG. speaking about western europe, I thought that france is the major energy supplier (CMIIW), thanks to it’s nuclear reactor? I dunno, maybe western europe just can import their energy from france instead of russia so that they dont need to be in freeze
anggi
2 Jan 09 at 9:18 am
Interesting and convincing analysis, I think. And, as far as I can see, quite right as well.
I should be very careful making a comment though, because the issue is very complicated. It’s far beyond me. Yet I guess some marginal remarks can be made.
Of course Russia is in a strong position. But the flipside of this is that Russia’s economy is still very much a mono-culture economy - all depends on the export of energy. Which makes the dependency kind of reciprocal, I guess. When the West European demand diminishes, Russian economy will suffer - as it will do in the next few years of economical depression. So, cutting down gas supply to Europe, can only a short term weapon to Moscow.
Moreover some energy alternatives are available to the EU. One them is North Africa ( Libya and Algeria) and the other one Norway. These are, in my opinion, much more of a substantial alternative than French nuclear energy.
Even some structural changes in energy policy may be made in the next 10 to 15 years: new, more sustainable ways of energy providing are being developed. Wind and sun. Political indications point to a real change of policy in the next years.
colson
2 Jan 09 at 5:31 pm
@Anggi
Yes, true that energy independent should be place on top of the priority. It is a shame and a sadful irony that Indonesia with its abundant resources is still far away from its energy independence. France do not export the raw energy material. Nuclear is their primary energy source, but the output can only be exported as electricity, while the western europe countries need the raw energy material, eg. oil and gas.
@Colson
True that the dependency also valid for Rusia to European. In fact, just 4 days ago, it is reported that Gazprom is looking for government help because of the stumbling price of oil. (http://www.huffingtonpost.com/2008/12/29/russias-once-mighty-oil-g_n_154122.html). Both side will have to diversify its partner. Europe should diversify its energy sources to other region, maybe some African countries and Central Asia, but still lack of infrastructure to get oil from those regions. Russia on the other hand still have China to buy their oil. But still, this can only be happen if China manage to keep their economic growth amid all the economy downturn (which I doubt they can do that concerning the sharp decline of demand from US).
Yours is not a marginal remarks, its a well-structured analysis, Colson!
Some of the countries in central europe has already have alternative pipelines. Czech have the Družba and Ingolstadt-Kralupy-Litvínov (known as IKL) pipeline which connect the central part with the western part distribution system (via Germany up until Norway). This might help as a distribution point for the eastern if there is such case of energy emergency situation. But the problem, Norway’s oil is inadequate to support large part of Europe. Russia’s oil is still needed.
Of course alternative energies will be the ideal solution for the problem. But with the economic downturn, I think we are likely to see some slowdown on the research and implementation of alternative energies as they are still inefficient and relatively expensive to develop. But hopefully those who hold the decision will still have enough commitment to keep the energy as top priority and also encourage those alternative energies.
Andika
3 Jan 09 at 1:05 am
Isu ini memang selalu menarik dan akan selalu menarik untuk masa ke depan. Gue berani bertaruh sudah ada beberapa skripsi mahasiswa HI Indo yang ngambil topik ini. termasuk temen gue, heee
Tapi gue pikir permasalahan ini kompleks. Ada banyak variabel yang harus dilihat dari masing-masing aktor. Baik dari sisi UE-nya maupun Rusianya. Kalo dari sisi UE-nya, Andika sudah mengulasnya sudah cukup lengkap. Demikian pula dari sisi Rusia oleh COlson. Nah, pendapat gue adalah apa yang terjadi pada hubungan Rusia-UE adalah hubungan interdependensi.
Artinya, Rusia butuh UE dan UE butuh Rusia dengan persentase yang berimbang. Disinilah negosiasi itu bermain. Mengubah bargaining power dari satu pihak. Uni Eropa seringkali “kalah” oleh Rusia karena proses pengambilan keputusan mereka yang lama *hasil chatting dgn Andika :)* dan Rusia yang dipimpin oleh nasionalis sejati. Jadi konflik energi yang terjadi selama ini lebih disebabkan oleh sentimen2 negatif di kedua belah pihak yang berimbas pada isu energi.
Verdinand
5 Jan 09 at 7:59 am
Kalau Uni Eropa mengamankan kepentingan energinya, maka mereka harus memiliki satu suara yang diperjuangkan terhadap Rusia. Sebenarnya Rusia tidak terlalu sulit untuk ditaklukkan asal punya keberanian menghadapi Opa Putin. *Oma Merkel mana berani?hehee*
Verdinand
5 Jan 09 at 8:03 am
Andika, I found this http://news.bbc.co.uk/2/hi/europe/7852145.stm is quite interesting. It’s about how Europe can improve its gas security.
bung tobing
27 Jan 09 at 10:03 pm