Volatile energy markets, unreliable and belligerent oil and gas producers, the global economic recession, all facets of a strong case for enhancing the energy security of the EU. Indeed, the recent endorsement of the Nabucco pipeline project by the Turkish Foreign Minister, Ahmet Davutoglu, should doubtless be greeted with delight, particularly as Mr Davutoglu emphasised the importance of energy security to Europe and claims to fully support the effort to achieve this exigent aim.
The Nabucco gas pipeline, which will connect the Caspian region, Middle East and Egypt, via Turkey, Bulgaria, Romania, Hungary and Austria and bring gas to Central and Western Europe, represents just one of the major EU projects aimed at supply diversification. It will bring around 30 billion cubic metres of gas to Europe and will, crucially, bypass Russia, which currently provides one third of EU gas imports. The consortium responsible for the pipeline claims it would be fully operational by 2014.
One does not need to look beyond the present gas supply situation in the EU to understand why this pipeline project is so vital. At present, the EU is dependent upon Russia to supply a majority of the gas it imports; this means dealing with the Kremlin-run gas monopoly, Gazprom, known for its inefficiency, corrupt management and meddling in Kremlin geopolitics. Indeed, Russia has proved to be an unreliable energy partner on a number of occasions in recent years; gas cut-offs following price disputes with Ukraine left potentially millions of Europeans without heating during the cold winter of 2008/2009. Despite Russia vigorously claiming that the main reason for turning off the tap was Ukraine’s debt, Russia has long been irritated with its former ally for pursuing pro-western policies of integration with the EU and NATO.
Yet until recently, there has been little action by Brussels aimed at addressing this pressing challenge. Instead, the EU has struck many a bilateral deal with Russia, thus letting the Kremlin employ its divide-and-rule tactics with great success. Germany and Austria particularly stand out. Germany’s former chancellor Gerhard Schröder has chaired the shareholders’ board of the Nord Stream pipeline since 2005. This Russia-backed project will run beneath the Baltic seabed and bring natural gas straight to Germany. The other pipeline project promoted by Gazprom, the South Stream, that would follow a similar trajectory to Nabucco, but would bypass ‘troublesome’ transit countries such as Ukraine, has also received backing from Germany, Australia, Hungary and Bulgaria among others. Should the South Stream be backed by member states, Western consumers might be saved from the by now ritualistic ‘turn of the valve’ around the New Year, but their eastern counterparts would become more vulnerable to the Kremlin’s bullying.
SOURCE: BBC NEWS
In July this year, the prime ministers of Hungary, Romania, Bulgaria, Austria and Turkey signed the Intergovernmental Agreement, officially committing themselves to the Nabucco project; Nabucco’s profile was also greatly enhanced by the employment of the former German Foreign Minister, Joschka Fischer, as a consultant.
That said, many questions still remain unsolved; most notable, is the origin of the gas to be pumped down the pipeline. At present, only Azerbaijan has formally committed itself to supplying gas, a commitment sufficient only to supply the initial stages of the project. Prospective suppliers are likely to include Iraq, Syria and Qatar, with Iran being also advocated by Turkey as a possibility. Europeans are also eager to get a share of Turkmen gas; the country is said to sit over one of the world’s largest gas reserves. In June, China agreed to lend Turkmenistan US$3 billion to develop its vast South Yolotan natural gas field. The loan marks a key step in Chinese efforts to secure long-term energy supplies from ex-Soviet Central Asia and will likely loosen Russia's grip over Turkmenistan's gas exports. Work on a 4,300-mile (7,000-kilometer) pipeline from Turkmenistan to China with the capacity to deliver 40 billion cubic meters of gas per year, is expected to be finished by the end of the year.
The Nabucco pipeline, on its own, will not provide energy independence for the EU - the pipeline will only meet around 8 percent of the EU’s energy requirements. While some comfort must be taken by the recent European Commission decision to fine Germany’s E.ON and France’s GDF Suez hundreds of millions of Euros for striking a market-sharing deal with Gazprom, more must be done to liberalise the EU energy markets; efforts to do so thus far, have been blocked by the likes of Germany and France.