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Azerbaijan, Caspian, Caucasus, Central Asia, Energy Diplomacy, Europe, International Relations, NATO, Nord Stream, Pipeline, Russia, South Stream, SouthernGasCorridor, Trans-Anatolian Pipeline, Turkey

Russian-EU Energy Relations: from Cooperation toward Contradictions


flag-eu-russiaFollowing World War II, it was necessary to take new economic steps in order to overcome political problems among European countries. Establishment of the European Steel and Coal Community, the European Atomic Energy Community and the European Economic Community formed the/an/new European energy policy.

After the first oil crisis in 1973, EU understood the importance of creation of common energy policy “…and European Council adopted “New Energy Policy Strategy” in 1974.” (1) In 1991, EU proposed “European Energy Charter” and the Charter was signed by member states in Lisbon in 1994. The Charter considered further regulation of energy policy across the continent. (2)

After the collapse of USSR, Russia-EU relations stepped up in a new phase which was the result of Yeltsin’s western-oriented policy. Permanent membership of Russia in UN Security Council and cases like Russia’s nuclear capability, energy resources, her dominant position in Eurasia, eastward enlargement of the EU, financial supports to Russia by EBDR and TACIS. made both sides to enforce their bilateral relations. (3)

In 2000, following Vladimir Putin’s coming to power, the Eurasian movement gained force and Russia launched to seek new geopolitical role in its new abroad backing to its oil and natural gas resources. In this regard, the eastward enlargements of both NATO and EU annoyed Kremlin. The Last enlargement wave brought Russia and both NATO and the EU in common neighbourhood and Russia strongly reacted to membership attempts of Ukraine and Georgia into NATO and to the EU’s Eastern Neighbourhood Policy. (4)

Today, Russia continues to supply about 15% of oil and 70% of natural gas consumption of Europe. Russian oil is getting more important in the light of decreasing EU oil production. According to the estimates of International Energy Agency, the natural gas consumption of the EU will be doubled up to 2030. However, EU is not intended to import only Russian natural gas till this period, as it turned its face to alternative sources, such as Central Asian and Caspian energy resources. (5)

The EU applies various policies in order to provide energy security. One of the main targets is to create common energy market, while there is no result achieved so far. Common energy markets will help to keep cooperation among member states in order to provide energy resources in case of any suspensions in energy supply from exporter countries. (6) Moreover, the enlargement policy of the EU also affected on its energy security. Energy dependence of EU member states is getting increased as the EU accepts new members. In order to decrease the risks related to natural gas supply, EU proposed member states to store up 20% of their natural gas consumption. In this way, member states will manage to use these stocks in case of energy crisis. Since reserves of the UK, Denmark and Netherlands will not be enough and oil reserves of Northern Sea will be depleted during 2030-2050, the EU will be more dependent on foreign energy supply. (7) The Balkan and Eastern European States (notably, Serbia, Romania, Bosnia and Herzegovina, and Bulgaria) are in the premise of Russian gas supply. However, Burgas-Alexandroupolis pipeline will keep dependence of the Balkan states on Russian-supplied oil.” (8)

After declaring independence, the Baltic States (Lithuania, Latvia, and Estonia) did not join The Commonwealth of Independent States (CIS), while natural gas prices increased for other CIS member states. Thus, economies of the three Baltic States developed faster than other former Soviet republics. In 2004, following their membership to the EU, three Baltic States made an agreement with Gazprom in order to access European natural gas prices in exchange for giving certain shares of their natural gas distribution network to Gazprom. At the present time, Gazprom owns 34% of Latvijas Gaze, 37.1% of Lietuvos dujos, 37.02% of Eesti Gaasi. (9)

Since the EU was dependent on Russian natural gas, Kremlin used the opportunity in order to prevent Ukraine and Georgia’s NATO dream, blocked Kosovo’s UN membership, influence the presidential elections in Ukraine, and could prolong the lease of Sevastopol naval base. (10)

In order to avoid Russian energy dependence, EU launched the Southern Gas Corridor initiative. Russian-Ukrainian gas crisis which left Europe without gas supply  in the mid of cold winter, (11) and crisis like  Gulf war, Iraq war, Iranian crisis, in short unstable situation in the Middle East, made the EU to seek for alternative energy recourses. In this context, Caspian energy resources emerged as a best alternative. (12) On the other hand, Russia continue to strengthen its energy hegemony by signing energy agreements with Turkmenistan and Kazakhstan and got authority of selling Turkmen and Kazakh natural gas to European market. Following these agreements, Russia started to attract Nabucco partners into Russian-led Nord Stream and South Stream projects. Russia offered Nabucco partners cheaper natural gas via South Stream than Nabucco offered. Of course, it had negative impact over Southern Gas Corridor. However, Russia doesn’t officially declare price matters for South Stream and Nord Stream. (13) Russia is about in the last phase of the implementation process of the South Stream project, and recently launched the second leg of the Nord Stream project. According to Alexei Miller’s statement, the Head of Gazprom, “Russia is seeking for to construct the third and fourth leg of Nord Stream.”

Gazprom is the operator of the South Stream pipeline project and has already signed a number of intergovernmental agreements with participating countries (Croatia, Bulgaria, Serbia, Hungary, Slovenia and Austria) through which the pipeline will run. Russia/Gazprom plans to include Balkan countries to his South Stream project before all of these countries being absorbed into EU membership network. This can hamper the energy hegemony and monopoly of Gazprom in Europe. Because, given the rules of the Third Energy Package and Energy Charter, Russian monopoly will be limited in EU territories. Because of the Russia–Ukraine gas crisis, the pipeline planned to be routed through Turkey’s waters to avoid the Exclusive Economic Zone of Ukraine.

All these developments put Turkey into a troubled situation. Because, Turkey wants to be the key transit country in the axis of all regional energy projects, which also will ensure the Turkey’s regional security. From the very beginning, Turkey paid much attention and enthusiasm to the implementation of the Southern Gas Corridor, rather than any other Nabucco partners did.

On 26 June 2012, Turkey and Azerbaijan signed a MOU for construction of the Trans-Anatolian Gas Pipeline (TANAP). While Turkey considered the construction of TANAP as a way to decrease its natural gas dependence from Russia, Kremlin responded very adequately that Turkey will still be dependent on Russian gas till the end of construction and implementation of TANAP (2018). However, Russia did not hesitate to increase the gas flow for Turkey when an explosion in Turkish-Iranian gas pipeline suspended the gas flow coming from Iran for a while. (14)

Today Russia does its best in order to draw of Turkmenistan from the Southern Gas Corridor and threatens Turkey and Europe with natural gas price increases. (15) As a main energy supplier for Europe, Russia is not necessarily content with Azerbaijan and Turkey’s energy policies, and tends to consider these countries as rivals for its energy policy towards Europe. Russia knows very well that EU can build a strong energy bridge between Turkmenistan and Europe through the Southern Gas Corridor. (16)However, recent pipeline decision made by Shah Deniz consortium probably made Kremlin officials happy. Because, in case of implementation, the Nabucco West pipeline would run next to South Stream pipeline, which is considered as a rival for Russian domination in Central and Eastern European countries.

Another problem remains unresolved is natural gas sources. Azerbaijan still remains committed to transport natural gas for Europe. However, the disagreements between Azerbaijan and Turkmenistan on delineation of energy fields in Caspian, and Turkmenistan’s energy agreements with Russia, China, Iran and Afghanistan makes the situation unclear whether Turkmenistan is ready to participate in the Southern Gas Corridor or not. Russia keeps its distanced stance toward the project; while Iran cannot event participate in the implementation of the Southern Gas Corridor because of its tensioned relations with the US and the EU. (17)

On the other hand, on 14 October 2009, Russian Gazprom and Azerbaijani SOCAR signed an agreement on purchase of Azeri natural gas by Russia. On rd of September 2010, they made some amendments on the existing contract in order to increase natural gas supply up to 2 bcm from 2011, and 3 bcm from 2012. (18) By doing this Russia is trying to discharge the Southern Gas Corridor. As much as the Southern Gas Corridor initiative will be prolonged, the EU will shake Russia’s hand for its energy security.

Russia is still seeking to expand its control over European energy market. Gazprom owns various methods to realize its monopoly intension. One of these methods is to own the shares of European energy companies. For instance Gazprom owns certain shares in: Wingas (Germany), Gas-Invest (Czech Republic), Gasum (Finland), Lietuvos Dujos (Lihuania), Eesti Gaas (Estonia), Latvias Gaze (Latvia), Panrusgaz (Hungary), Promgaz (Italy), Gazprom UK Trading (UK), Moldovagaz (Moldova), KazRosGaz (Kazakhstan), EuRoPolGaz (Poland) and etc.

On September 4 (2012), the European Commission (EC) launched a formal anti-trust investigation into Russian state-owned company Gazprom, since EC’s concerns that Gazprom may prevent the diversification of supply of gas and impose unfair prices for its customers in Europe. This information was inflated by some famous news portals and people were made to believe that, Russia loses its previous energy hegemony in Europe. (19) According to media, no enterprises could get away from EU’s anti-trust investigation, even companies like Microsoft and Google.

Bibliography

1)Yazgan Erbil, “Rusya-Ukrayna Doğalgaz Krizi ve Enerji Güvenliği”, Kadir Has Üniversitesi Uluslararası İlişkiler ve Küreselleşme, (Yüksek Lisans Tezi), İstanbul, 2010, s.71
2)Ömer Akdoğan, “Rusya’nın Enerji Politikasının Avrupa Birliğinin Enerji Güvenliğine Etkisi”, Trakya Üniversitesi Uluslararası İlişkiler Anabilim Dalı, (Yüksek Lisans Tezi), Edirne, 2008, s.37-39.
3)Sait Sönmez, “Yeni Batıcılık ve Yeni Avrasyacılık Akımları Bağlamında Yeltsin Yönetiminin Doğu Batı Politikaları’nın Analizi”, Akademik Bakış, Cilt 3, Sayı 6, 2010, s.88-90.
4)Birol Akgün, “Rusya-AB İlişkileri”, (Rusya Raporu), Stratejik Düşünce Enstitüsü, Ankara, Mayıs, 2010, s.80.
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6)Ömer Akdoğan, “Rusya’nın Enerji Politikasının Avrupa Birliğinin Enerji Güvenliğine Etkisi”, Trakya Üniversitesi Uluslararası İlişkiler Anabilim Dalı, (Yüksek Lisans Tezi), Edirne, 2008, s.37-39.
7)Arzu Yorkan, “Avrupa Birliği’nin Enerji Politikasi ve Türkiye’ye Etkileri”, Bilge Strateji Dergisi, Cilt 1, Sayı 1, 2009, http://www.bilgestrateji.com/store/dergi1/arzuyorkan.pdf, s.34.
8)Neslihan Adanalı, “Rusya Federasyonu’nun Eski Sovyet Ülkeleri ve Balkan Ülkeleri Üzerindeki Etkisi”, Dış Ekonomik Ilişkiler Müdürlüğü İzmir Ticaret Odası, Şubat, 2007, s.6-8.
9)“Gazprom na rınkax stran SNG i Baltii: koneç sovetskogo çenovogo subsidirovaniya”, Wood Mackenzie Research and Consulting, Eylül, 2008, s.6-7. http://www.woodmacresearch.com/languages/russian/GazpromsCISBalticmarketSep2008rus.pdf?hls=true
10)Birol Akgün, “Rusya-AB İlişkileri”, (Rusya Raporu), Stratejik Düşünce Enstitüsü, Ankara, Mayıs, 2010, s.80.
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12)Emre Baysoy, “Rusya, AB, ABD İlişkileri Bağlamında Enerjinin Ekonomi Politiği ve Küreselleşmenin Jeopolitigi”, Güvenlik Stratejileri Dergisi, Stratejik Araştırmalar Enstitüsü, Harp Akademileri Basım Evi, İstanbul, Yıl 5, Sayı 10, Aralık, 2009, s.70.
13)Mahmut Gürer, “Rusya Türkiyenin Projelerine set koyuyor – Moskovadan Soğuk Tavır”, T.C. Elektrik Mühendisleri Odası, http://www.emo.org.tr/ekler/7b6b142463f773e_ek.pdf?dergi=504, (e.t. 23.02.2011).
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15)Mahmut Gürer, “Türkiye Atak Başlatıyor – Nabucco İçin Son Şans”, T.C. Elektrik Mühendisleri Odası, http://www.emo.org.tr/ekler/24c624f3f0b39fe_ek.pdf?dergi=546, (e.t. 23.02.2011)
16)Begüm Kıyman, “NABUCCO”, T.C. Dış Ekonomik İlişkiler Müdürlüğü, İzmir Ticaret Odası, İzmir, 2009, s.3
17)Su Tuncer, “Türkiye Nabucco`da Gücünü Kullanmadı”, T.C. Elektrik Mühendisleri Odası, http://www.emo.org.tr/ekler/d83ad840e65af43_ek.pdf?dergi=628 (e.t. 24.02.2011)
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19)Ilgar Gurbanov, “The New Trends in Russian Energy Policy following Third Presidency of Putin”, Strategic Outlook, (27.10.2012), http://www.strategicoutlook.org/asia—pasific/news-the-new-trends-in-russian-energy-policy-following-third-presidency-of-putin.html

Find original article at: Russian-EU Energy Relations: from Cooperation toward Contradictions

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