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ENERGY SECURITY IN EUROPE: THE EU, RUSSIA AND TRANSIT COUNTRIESUNC Chapel Hill
Center for Slavic, Eurasian and East European Studies
What is energy security?
Multiple definitions For the consumer (European Union): Access
to sufficient energy resources at reasonable prices, free from major risk of disruption
For the producer (Russia): Ensuring a future market and supply route for selling its energy resources and ensuring the supply is adequate to fulfill contracts
For the transit countries: Access to sufficient energy resources at reasonable prices and possibly obtaining transit-related revenue
Main arguments
Increasing EU dependence on Russian energy and breakdowns in energy security
Failed EU attempts to lessen dependence
Successful Russian attempts to weaken EU initiatives
Continued Russian dominance over energy supply
Outline
EU energy consumption and imports Types and sources
Getting from A to B Problems with the supply route
EU response to supply disruptions Solidarity, indigenous production and import
diversification Russian counter response
Develop new middlemen Concluding thoughts
Continued, if not growing, Russian influence
EU energy supply
Source: Second Strategic Energy Review, “An EU Security and Solidarity Action Plan,” Statistical Index
Import dependency
Source: Second Strategic Energy Review, “An EU Security and Solidarity Action Plan, Statistical Index
Sources of imports
Source: Second Strategic Energy Review, “An EU Security and Solidarity Action Plan,” Statistical Index
Particularities of natural gas
Growing demand Safer than nuclear Cleaner than coal Cheaper than oil
Growing importation Dwindling EU production
Gaseous state Difficult to transport
Increasing dependence on Russian supplies as well as Russia’s increasing dependence on transit pipelines
1991
1995
1999
2003
2007
0
100
200
300
400
500
ConsumptionProductionNet Imports
Source: Authors’ calculations, Second Strategic Energy Review, “An EU Security and Solidarity Action Plan”
How does it get to Europe?
Only two existing corridors
Source: The Economist, “Bear at the Throat”
Supply disruptions: 2009 Russia-Ukraine gas dispute
1 January: Gazprom cuts all supplies for Ukrainian consumption, while supplies to Europe continue
5 January: Gazprom alleges that 65.3 million cubic meters of gas has been ‘stolen’
7 January: deliveries to Europe completely cut off 19 January: ten-year supply and transit contracts
signed 20 January: gas flows to Ukraine and Europe
restart 22 January: gas flows to all European customers
returning to normal levels
EU Response
1. An External Policy for Energy Security
2. Promoting Indigenous Energy Supply
3. Diversification of Natural Gas Supply
Response 1: An external policy for energy security
“Energy Charter Treaty”
“EU-Russia Dialogue”
Possible outcomes of these two initiatives?
Challenges to these initiatives?
Response 2: Promoting indigenous energy supply
31%
30%
19%
15%
5%
EU Electricity Production by Source
NuclearCoalNatural GasOilRenewables
Source: CRS Report for Congress, “The European Union’s Energy Security Challenges”
Response 2: Promoting indigenous energy supply
Source: Second Strategic Energy Review, “An EU Security and Solidarity Action Plan,” Statistical Index
Types of indigenous energy
Coal
Nuclear
Renewable
Response 3: Diversification of natural gas supply
Arguably the most politicized and important attempt to diversify natural gas supply is the proposed Nabucco Pipeline
Nabucco Pipeline intended to cut dependence on Russian natural gas
Nabucco
EU-backed pipeline initially proposed in 2002 during talks between major energy companies in Austria, Hungary, Romania, Bulgaria, and Turkey.
Proposed Nabucco route would connect Turkey to Austria and transport Central Asian and Caspian gas.
Route would bypass Russia
Nabucco criticism and obstacles Delayed Construction
Securing Energy Source
EU’s relationship with Turkey
Gazprom’s South Stream
Russian response: Cut out the transit countries
Transit route diversification South Stream
Nord Stream
Gazprom’s South Stream
Proposed in 2006, Gazprom gas South Stream would transport natural gas from Black Sea to Italy.
Current route would involve Russia, Turkey, Bulgaria, Romania, Hungary, Serbia, Greece, and Italy.
Viewed by many as a more viable rival to the Nabucco pipeline
Comparing routes
Source: BBC News, “Deal to Boost EU Gas Project”
Russia’s regional strategy in East Europe to block Nabucco?
All of the countries that are part of the Nabucco pipeline have accepted invitations from Gazprom to join South Stream pipeline.
Gazprom construction of multiple storage facilities in East Europe
Gazprom purchase of 22% of Hungarian MOL in 2009
Nord Stream: Russia to Germany, no layovers
Source: Nord Stream AG, http://www.nord-stream.com/fileadmin/Dokumente/3__PNG_JPG/1__Charts/Nord_Stream_Pipeline_Route_ENG.JPG
Concluding remarks
Increasing dependency on Russian supplies Increasing European demand for natural gas
Decline of coal, nuclear and oil Failure to secure alternate supplier and route
Central Asian gas via Nabucco Strengthening of Russian position vis-à-vis transit
countries Nord Stream and South Stream lessen Russia’s
dependence on any one transit country Will Russia be able to increase production (or
secure Central Asian supplies) to meet rise in demand?
Energy security in Europe
Questions and comments?
Brandon Rice Isaac White
Center for Slavic, Eurasian and East European Studies Center for Slavic, Eurasian and East European Studies
UNC Chapel Hill UNC Chapel Hill