An overview on energy security related concerns in the European Union

Posted in Energy Security , Other | 24-Jun-07 | Author: Ioannis Michaletos

Since the early 20th century, the notion of energy security preoccupied policy makers around the world, and especially the industrialized societies of the West. Although the term has regained strength over the past few years; it is more than certain that it played a vital role in the conflicts and antagonisms between most states for the past 100 years at least.

After the end of WW2 and the subsequent beginning of the Cold War, and up until the mid 70’s; USA and its Western allies managed to keep the prices of oil relatively low in order to progress industrially uninterrupted from any sudden changes in the prices of energy commodities. The era of cheap oil was lost after the two Israeli-Arab wars (1967.1973), when the Arab states managed to agree using the OPEC framework to place embargoes against the West, nationalize oil industries and in general reverse the situation as it was dictated by the Western capitals.

In 1973 after the oil embargo, a recession started in the West that increased considerable inflation, unemployment and in general halted the ongoing economic progress since the late 40’s. Moreover it presented a golden opportunity for the Arab states to expand financially and politically and emerge as new global players in a more complicated international environment than that before the embargo.

The Iranian Islamic revolution in 1979 and the overthrown of the Sakh alarmed the West of the perils involved in not securing the hydrocarbon trade to their advantage and soon the term “Energy security” was formed in order to address the issue under the prism of geopolitics. Over the past generation or so, the West lost its ability to control the oil & gas supply and it is more dependent than ever on foreign powers and political units. This is more the case for Europe and Japan, since the USA have managed to exercise considerable influence in strategic locations such as the Middle East thought he use of military, political and economic might.

During the 80’s the Western states having realized the critical stage energy related affairs have for their sustainability as coherent societies; drafted various plans in exploiting alternative means of energy production and importation. Also they upgraded their cooperation with the then Soviet Union in importing natural gas into the Continent and constructed an amass of gas pipelines.

The break-up of the USSR saw a continuous strive by the USA to advance its geoeconomic interests in Central Asia-Caspian Sea where large reservoirs of oil and gas are to be found. Therefore energy security was closely related with geopolitical strategic planning that entailed the expulsion of the Russian influence from the region along with the formation of many alternative trespassing routes for the pipelines to-be-constructed.

The natural gas factor

From its point of view Moscow relied heavily in taking advantage of its tremendous natural gas infrastructure and deposits. Since 1991 it supplies its neighbors with natural gas (Cheaper than international prices), in order to check their foreign policy ambitions and keep them in line. In cases where countries such as Ukraine showed signs of challenging Russian predominance; Moscow proceeded in increasing the prices five-fold, in late 2005. The pricing policy of Gazprom is strictly political, meaning that friendly states to Russia receive considerably lower prices than others. For instance in spring 2006, Byelorussia paid 45$ per 1,000 cubic meters, whilst Georgia 110$. Over the past few months Gazprom feels confident enough in raising the prices irrespectively of political motives, in order to gain further global financial clout.

The importance of using energy as a political instrument can be found in the dependency levels “Near abroad” countries have from Russia. Ukraine consumes 80 billion cubic of gas meters per year: 25 Billion imported from Russia, 36 Billion imported from Turkmenistan but trespass through Russia and the rest 18 billion produced domestically. As it can be clearly shown almost 4/5ths of Ukraine’s energy needs are essentially controlled by Russia, therefore its past, present and future is inexorably related with the Russian foreign policy and its resolutions for a variety of themes.

The European Union imports more than 25% of its natural gas from Russia and a significant segment of this flow through the “Brotherhood” pipeline passing from Ukraine on its way to the West. Therefore Kiev is dependent to Russia and collaborator of the West, being in reality the energy hub for natural gas between Russia and the EU. That is the most important aspect of Ukraine’s importance to the European states.

According to the International Energy Agency (2005), Europe consumed 540 billion cubic meters of natural gas.
60% from own resources (British, Norwegian, Dutch drills in the North Sea)
10% from Algeria
2% from Nigeria
3 from other states
And 25% (135 billion cubic meters) from Russia.

90% of the Russian exports passes through the Ukrainian soil. Moreover the pipeline “Yamal” from Byelorussia-Poland reached Germany that consumed 33 billion cubic meters in 2005. Another pipeline crosses through the Balkan and terminates in Bulgaria. Lastly the “Blue stream” pipeline reached Turkey through an underwater construction. Nowadays a very important development is the creation of the Baltic Sea pipeline that will connect (Underwater), Russia with Germany, in a geopolitical level this will as an effect the limitation of the Polish and Baltic states influence and contain prices for the near future.

The European Union faces an increased dependency level on energy and has drafted policy initiatives to better confront the situation. In 2000 the Commission published the “Green Bible. It admits EU’s dependency to the level of more than 50%, and predicts that if measures are not been taken that percentage would rise to 70% by 2025 the latest. Furthermore it recognizes the importance of the Middle East (Oil) and Russia (Natural gas), in meeting Europe’s energy needs.

The Green Bible mentions the need for paying attention to the sector of renewable energy, biofuel production, reduction of energy consumption and overview of the current energy efficiency so as not to waste any. For the time being the media hype on the environmental threats and the “Climate change” serves Europe’s original schemes in reducing its energy consumption and proceed with the projects involving alternative energy productions. What is also needed though is the understanding that the economic system by which the West function nowadays; favors overwhelming consumption trends, therefore it is difficult to overcome the antithesis between sustainable development and mass consumerism.

As the years go by, the unresolved energy security related problems, will come to dominate the European daily agenda and the EU states will be forced to take drastic measures to avert the already overwhelming dependency on imports from abroad. Further it is interesting to note that as long as Europe does not have a geopolitical unified formation; it would not be able to forge a coherent and reliable policy to its foreign energy partners, thus enabling each individual state to proceed with its own. For instance Germany, Bulgaria and Greece have already agreed with Russia for pipeline projects, whilst Romania is about to sign the Constanja –Trieste pipeline. France under the new President Sarkozy is envisaging a “Mediterranean Union” and it is eying Northern African energy as an attractive long term option. UK, Norway and the Netherlands through their multinational oil conglomerates follow a transnational energy policy and finally Cyprus has enacted a process of researching for oil in the Eastern Mediterranean and provides exploration license to international corporations.

Europe does not have an “Energy security policy” and the individual member states follow their own preferences and adhere to their interests and principles. Judging from the importance of energy nowadays, the expansion of Russia and the Arab world and the Asian dynamism; Europe cannot be considered as a global player in energy affairs and its influence is waning considerably. The only logical consequence would be for some of the largest states with more or less common aims, to join forces apart from the rest of the Union. This would be the decisive moment for the EU in terms of its actual dissolution, but also a geopolitical upturn in the Continent by which a new political unit of historical proportions will emerge. Energy security, is most probably the main reason by which a Franco-German axis along with Belgium, Austria and possibly Central Europe and Italy; will unify themselves in order to survive in the 21st century competitive arena.