Europe’s Energy Dependency: A Political Minefield

By Ivana Letic | 18 July 2011

To quote this document: Ivana Letic, “Europe’s Energy Dependency: A Political Minefield”, Nouvelle Europe [en ligne], Monday 18 July 2011, http://www.nouvelle-europe.eu/node/1147, displayed on 25 September 2020

Does our energy dependency make slaves out of us? Are we at the mercy of the energy producing countries? The question of Europe’s energy dependency led to an array of interviews with academics, journalists and those in the private sector in an attempt to discover the nature of this ‘dependency’ relationship.

Such a broad topic, however, required a more narrowed focus if we were to come up with concrete answers. As such, emphasis is placed on Europe’s relationship with Russia and how projects such as the South Stream, Nabucco and Interconnection Turkey-Greece-Italy have to a large extent shifted the entire nature of energy from a merely economic issue to one which is highly politicised. Furthermore, the question of alternative energy as a possible solution to alleviating the burden of dependency on Russia is explored as well as the future of nuclear energy, in the context of the recent events in Japan. From this it will become clear that Europe requires a more coherent policy in addressing its energy dependency, for tomorrow belongs to the people who prepare for it today. 

The European Union and Russia: A Dependency Relationship?

Dr Parmentier, a lecturer at Sciences Po and co-founder of the think tank Euro-Power, explains that energy dependency is a symbiotic relationship where the gas producer country is as dependent as its customer country. However, he affirms that as long as you have trust between the two ‘dependent’ countries, speaking about dependency as a negative relationship makes no sense. He goes on to point out the paradox facing Russia, namely, that while Moscow seeks to regain its superpower status through the means of energy politics, generally however, energy supplier countries are not big powers on the international arena. Dr Parmentier explains that it’s better to talk about ‘rationalized interdependence’ where interdependence refers to the economic side of the equation and ‘dependence’ describing the political aspect.

An interesting point brought up by Dr Tayiana Romanova, an associate professor at the Department of European Studies of the School of International Relations of St Petersburg State University, and echoed by Mr. Kovacs (See below) is that the EU is unable to speak with one voice when it comes to energy. In fact, Ms Romanova argues that the individual member states of the EU are more credible that the EU as a whole in the eyes of Russia. The reasoning for this is that the member states ‘can bring life to their promises’ while the European Commission, from time to time, responds to Russia by stating that their request does not enter the scope of their competences. As such, it is not clear whether there exists a unitary EU energy policy or rather a composition of policies of member states.

The Politics of the South-Stream Project

You cannot talk about energy dependency between the EU and Russia without discussing the South Stream project. Explaining the politics of the project, Ferenc Kovacs, counsellor to the Prime Minister of Hungary, candidly explained Russia’s politics behind the building of the pipeline as well as Hungary’s role in the construction. While Mr Kovacs asserts that Europe is Russia’s largest trade partner in gas, he speculates that there is a high likelihood that Russia will change course and focus more on Asia. This being said, Dr Romanov explains that China is not willing to pay the high prices Russia demands, thus Asia is not as lucrative as the European market.

Turning to the South Stream project, it is owned equally by Russia’s GAZPROM and Italy’s ENI. Mr Kovacs mentions that Mr Putin and Mr Berlusconi have been friends for many years and this collaboration is as much political as it is based on economics. However, Russia quickly realised that Italy was not strong enough financially to deliver on its own and consequently Putin decided to change the scheduled route, involving more and more countries. Additionally, Russia quickly discovered that the project, originally budgeted at 15 billion euro, was going to come to around 20-35 billion euro given its re-routing requirements as a result of the Ukraine. Mr Kovacs recalls Ukraine denying Russia access to pass through the Black Sea, pointing out that Russia may not be as political omnipotent as it once was. The exact building of the pipeline seems to be firmly in the hands of Russia, according to Jasna Petrovik a journalist from Belgrade working for Politka. According to her sources, the Russians will not allow the EU to dictate the conditions of business and will not relinquish the building of the pipeline to any third party.

An alternative to Russia: The Nabucco Project

Briefly mentioned above, the Nabucco project is an attempt to diversify gas suppliers and delivery routes in Europe. The Nabucco line is to run from Turkey to Austria and is hoped to lessen Europe’s dependence on Russian energy. Dr Romanova explained the Russian reaction to the pipeline saying that initially Russia was not pleased with the project as no country enjoys being sidelined, however today the Russian rhetoric runs along the lines of saying ‘of course you can construct pipelines, but what will you transport through it? You have no natural gas to put in it’. Dr Romanova argues that Nabucco makes little commercial sense for a number of reasons. While there is a small amount of gas coming from Azerbaijan, supply coming from Iran is politically sensitive and with Turkmenistan’s commitment to Russia, the Russian argument of ‘what gas are you transporting ?’ begins to sound true.

 

 

Europe’s Focus on Gas

Having so far analysed the relationship between the EU and Russia as well as the rival South-Stream and Nabucco projects, what remains to be answered is why has Europe focused on gas to such a large extent. Mr Marco Mergheri from Edison goes a far way in explaining this. Founded in 1884, Edison is said to be Europe’s oldest energy company dealing with the procurement of electric power, natural gas and crude oil. Mr Margheri emphasized the importance of gas as one of the sources of thermo power generation. He goes as far as to say that gas is more or less as important as coal and nuclear energy. His reasoning for this is that, firstly, we are unlikely to witness an expansion of the current nuclear supply and, secondly, if we wish to continue using coal then the emission reduction targets go out the window. Thus, the importance of gas in Europe is acute according to Mr Margheri.

The question naturally arises as to whether, in say 20 years time,  the EU will be able to significantly reduce its dependency on the Russian Market. Unfortunately, no one has a straight cut answer as the number of variables to be taken into account are immense.  Dr Romanova, however, looks at the other side of the coin in explaining how Russia stands to benefit from a decoupling of EU energy dependency on Russia. She speculates that if the EU were to stop importing Russian gas this may in fact be a favourable development for Russia in the long term as it would prompt a restructuring of its economy.

Alternative and Nuclear Energy

While alternative energy spans a breadth of topics from wind to hydro to solar, the interviews seemed to focus mainly on solar energy. When the interview took place with Mr Stefan Roest from Delft University in the Netherlands he had not yet won the Benelux Be.Project competition for his and Mr Chokri Mousaoui’s idea. 

The largest obstacle facing solar energy is the cost which is substantially higher compared to conventional fuels. Mr Roest and Mousaoui’s project, entitled Eternal Sun, seeks to reduce these costs by developing a type of simulator to test solar panels.Looking at the component costs of solar energy, it is the solar panels which contribute the most to the costs. Thus the Eternal Sun project hopes that by being able to accurately determine the efficiency of certain solar panels this will contribute to the planning and, hopefully, subsequent success of solar energy projects. However, as Mr Roest explained, the greatest hurdle is investment in Research and Development in these areas.

Conclusion

In the end, what does Europe’s energy future look like? Can we even speak of ‘Europe’s’ energy future or is it more accurate to refer to that of individual member states? In addressing the nature of Europe’s energy dependency various experts from academics to journalists to individuals working in the private sector have explained that this notion of ‘dependency’ is a two-way street and thus the picture is not as gloomy as originally perceived. Projects such as the South-Stream, Nabucco or ITGI are not merely about economics : they are also highly political. This politicization of energy adds an additional layer of complexity to the energy dependency of Europe.

If anything, this investigation has illustrated how sensitive the topic of energy is. Many individuals and companies refused to discuss the issue or when interviews were granted they were reluctant to answer politically sensitive questions such as those regarding nuclear energy. The way forward for Europe should follow the logic of ‘plan for the worst but hope for the best’. In other words, investment in research and development of alternative energy should continue, not only because its beneficial to the environment but, in the worst case scenario, in the event that Europe is no longer able or willing to import from elsewhere.

To go further

On Nouvelle Europe website

 

Source photo : Warning Gas Pipeline, par futureshape, sur flickr

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