Pipe dream?
EU dependence on Russian natural gas
Úlfur Sturluson
Lokaverkefni til MA-gráðu í alþjóðasamskiptum
Félagsvísindasvið
September 2014
Pipe dream?
EU dependence on Russian natural gas
Úlfur Sturluson
Lokaverkefni til MA-gráðu í alþjóðasamskiptum
Leiðbeinandi: Alyson J.K. Bailes
Stjórnmálafræðideild
Félagsvísindasvið Háskóla Íslands
September 2014
2
Ritgerð þessi er lokaverkefni til MA-gráðu í alþjóðasamskiptum og er
óheimilt að afrita ritgerðina á nokkurn hátt nema með leyfi rétthafa.
© Úlfur Sturluson 2014
190984-2309
Reykjavik, Ísland 2014
3
Útdráttur
Hnattvæðing síðustu áratuga, og aukið víxlhæði ríkja í milli, hafa leitt til mikilla breytinga á
hugmyndum manna um öryggi. Olíukrísur á sjötta áratug síðustu aldar breyttu hefðbundnum
skilningi fólks á hugtakinu öryggi og í stað þess að það væri einskorðað við hernaðarsviðið,
eins og það hafði áður verið, fóru menn að átta sig á því að framboð og eftirspurn eftir olíu og
jarðgasi geta haft alvarlegar alþjóðlegar afleiðingar. Í þessari ritgerð verður rannsakað hvaða
svæðisbundnu og alþjóðlegu afleiðingar það getur haft fyrir Evrópusambandið (ESB) að vera
eins háð innflutningi á erlendum orkugjöfum og raun ber vitni og þá sérstaklega innflutningi á
rússnesku jarðgasi. Þá verður hin djúpa hugmyndafræðilega gjá milli ESB og Rússlands
skoðuð sérstaklega og ljósi varpað á hvaða afleiðingar þessi ólíka nálgun getur haft. Til að
setja þetta í stærra samhengi verður gerð sérstök grein fyrir þeim áhrifum sem hinn
áðurnefndi hugmyndafræðilegi ágreiningur sem og krísan í Úkraínu geta haft annars vegar á
samrunaferli ESB á sviði orkumála og hins vegar á samband Rússlands og ESB.
Niðurstöður þessarar ritgerðar sýna að þótt svo að Evrópusambandið hafi markað sér
stefnur og gert áætlanir um aukinn samruna á sviði orkumála þá hafa sérhagsmunir
ákveðinna ríkja, bæði innan og utan ESB, komið í veg fyrir slíkan samruna. Á hinn bóginn eru
líkur á að þróunin í Úkraínu ýti við Evrópusambandinu og stuðli að vitundarvakningu hjá
sambandinu um nauðsyn samhæfðra aðgerða og hraðari samruna á sviði evrópskra
orkumála.
4
Abstract
Increasing interdependence and globalization have changed the concept of security
considerably over the past few decades. The oil crises of the 1970s challenged traditional
military-focused security concepts and brought home the reality that supply and demand of
hydrocarbon energy sources could have severe international implications. This thesis will
discuss the domestic and international geopolitical ramifications of the EU's increasing
dependence on foreign suppliers of energy, with particular focus on imports of Russian
natural gas. The dichotomy of values and philosophy that exists between the EU and Russia
will be examined along with the possible ramifications stemming from this divergence in
thinking. The influence of such a contradictory relationship upon EU efforts at energy
integration is examined in the broader context of EU-Russian relations, and in the light of the
latest crisis over Ukraine.
The main conclusions of this thesis are that although policies and plans are in place
for further EU energy integration, self-interested efforts to block such change, from both
outside and inside the Union, have so far prevented this from happening.
However,
developments surrounding the Ukrainian crisis have the capacity – at least in one scenario to act as a political catalyst for greater EU strategic awareness and faster integration within
the EU's energy sector.
5
Preface
This 30 ECTS-credit thesis is a requirement for the completion of an MA degree in
International Relations at the University of Iceland. Supervisor for this thesis was Alyson J.K.
Bailes. The contrasts and similarities of Russian history and culture to those of Western
Europe have always fascinated me. I have since I was young been very interested in history
and foreign relations, in particular those of Europe, Russia, China and Japan. Recent events
in Ukraine have once again brought Russia back into focus of international discourse, after a
long absence from the spotlight since the collapse of the Soviet Union, and once again
Europe along with the U.S stand against Russia in a Cold-War style proxy-conflict. Although
this conflict is extremely complex there are two aspects connected to it that I find particularly
interesting. First, it is reminiscent of the old ideological struggle of communism vs. capitalism,
instead now it is the liberal post-sovereignty of the EU vs. the hard-power Realpolitik of
Russia and one wonders which premise will succeed. Second, I am very interested in the EU
and in the concepts and theories behind integration and the Ukrainian crisis offers a very
good "test-case" to see if a country like Russia, that operates via great-power Realpolitik truly
does present the EU with the limits of its integration process.
I would like to thank my wife Jóna Sólveig Elínardóttir for her support and encouragement
during my time researching and writing this thesis. I would also like to thank everyone else
that provided input and advice. Finally, I would like to thank my supervisor Alyson J.K. Bailes,
whose advice and support made this thesis possible. Her input proved invaluable to me and I
would like to thank her for her patience and willingness to answer my countless emails and
questions.
Úlfur Sturluson
Reykjavík, 19 September 2014
6
Table of Contents
Útdráttur ....................................................................................................................................... 4 Abstract ......................................................................................................................................... 5 Preface ........................................................................................................................................... 6 I. INTRODUCTION .................................................................................................................... 9 1.1 Research Question and Methodology .................................................................................. 11 1.2 Structure of the thesis ............................................................................................................... 12 II. THEORETICAL FRAMEWORK .......................................................................................... 14 2.1 Classical Realism ........................................................................................................................ 14 2.1.1 Neo-­‐realism ............................................................................................................................................. 15 2.2 Constructivism ............................................................................................................................ 16 2.3 European Federalism ................................................................................................................ 18 2.4 Functionalism .............................................................................................................................. 19 2.4.1 Neo-­‐functionalism ................................................................................................................................ 19 2.5 Liberal Intergovernmentalism .............................................................................................. 20 2.6 Security Concepts ....................................................................................................................... 21 2.6.1 Security in International Relations ................................................................................................ 21 2.6.2 Energy Security ...................................................................................................................................... 23 2.7 Russian realism vs. European liberal intergovernmentalism .................................... 24 2.8 Some Key Terms ......................................................................................................................... 26 2.8.1 Sovereign Democracy .......................................................................................................................... 26 2.8.2 Value-­‐gap .................................................................................................................................................. 27 2.8.3 The Post-­‐Soviet Space ......................................................................................................................... 27 2.8.4 Sphere of Influence ............................................................................................................................... 28 III. THE RUSSIAN PARTNERSHIP ........................................................................................ 29 3.1 NATO and Russia ........................................................................................................................ 30 3.2 EU Enlargement .......................................................................................................................... 31 3.3 EU-­‐Russian Cooperation .......................................................................................................... 33 3.4 Russia's Hydrocarbon Economy ............................................................................................ 35 3.5 Russian Energy Policies ............................................................................................................ 37 3.6 Russian Ambitions and Energy Strategies ......................................................................... 39 3.7 The Russian "Energy Weapon" and the EU ........................................................................ 41 3.8 The Ukraine .................................................................................................................................. 42 3.8.1 Ethnic Tensions ...................................................................................................................................... 45 3.9 Summing Up ................................................................................................................................. 46 IV. THE EU AND ENERGY ....................................................................................................... 48 4.1 From oil to natural gas .............................................................................................................. 48 4.2 Demand for natural gas in EU ................................................................................................. 49 4.3 Shale Gas ........................................................................................................................................ 53 4.4 Energy Infrastructure Blueprint 2020 ................................................................................ 55 4.5 EU Energy Roadmap to 2050 .................................................................................................. 57 4.6 Climate Change ............................................................................................................................ 58 4.7 Natural gas supply reliability for EU .................................................................................... 61 4.7.1 The EU’s Energy Islands ..................................................................................................................... 61 4.7.2 Liquefied Natural Gas .......................................................................................................................... 63 7
4.7.3 Competing with the Asian Market ................................................................................................. 65 4.8 Markets and Liberalisation ..................................................................................................... 66 V. NATIONAL INTERESTS VS. EUROPEAN INTERESTS ................................................. 69 5.1 Rhetoric vs. Reality .................................................................................................................... 69 5.2 The Nord-­‐Stream pipeline ....................................................................................................... 69 5.3 The South-­‐Stream pipeline ..................................................................................................... 72 5.4 The Nabucco pipeline ................................................................................................................ 75 5.5. Germany ....................................................................................................................................... 79 5.6 Summing up .................................................................................................................................. 80 VI. CONCLUSION .................................................................................................................... 82 BIBLIOGRAPHY ........................................................................................................................ 90 TABLE OF FIGURES Figure 1 – Russian Oil Production and Brent Crude Prices 1992-­‐2013 Figure 2 – EU28 Natural Gas Import Dependency Figures 1995-­‐2012 Figure 3 – EU28 Natural Gas Imports in cubic meters 1990-­‐2012 Figure 4 – EU 2020 Renewable Energy Targets 2012-­‐2020 Figure 5 – Global mid-­‐tropospheric 5 year averages in degrees Celsius Figure 6 – EU Russian Natural Gas Dependency 2012 MAPS Map 1 – NATO Expansion 1949-­‐2014 Map 2 – EU Enlargement 1958-­‐2013 Map 3 – Ukraine's Ethnic Zones Map 4 – Liquefied Natural Gas Terminals in Europe 2011 Map 5 – Nord-­‐Stream Pipeline Map 6 – South-­‐Stream Pipeline Map 7 – South-­‐Stream, Nord-­‐Stream and Nabucco Pipelines 8
I. INTRODUCTION
This thesis will discuss the European Union’s (EU’s) energy security in the early twenty-first
century, with a special focus on the EU's dependence on the Russian Federation for natural
gas supplies. The extent of this energy dependence and future projections will be analysed in
relation to what such dependence may mean for the EU and its ability to further liberalize and
integrate its energy sectors; and whether or not a single cohesive energy policy towards
Russia is in fact feasible. The implications for the EU’s broader security situation and its
political cohesion will also be noted. At the theoretical level, the ramifications of such
dependence will be analysed using theories of EU integration versus that of Russian and
European neo-realism. Exactly how these theories apply in the context of energy security
and EU-Russian relations will also be discussed, not only in terms of the EU vs. Russia, but
also in relation to their effects on the internal dynamic of the EU's Member States.
The background to this topic may be found in the broader evolution of East-West relations
in Europe. With the fall of the USSR and the end of the cold war over 25 years ago, many
believed that a new era of cooperation between Europe and Russia had begun. Russia was
seen as eager to join the international community in a new capacity as it embraced western
capitalism and democracy; or at least, this is how it was presented to the West at the time.
The reality, however, was much more complex: and in the 21st century’s second decade, with
a resurgent and confrontational Russia, the consensus in Europe on relations with Moscow is
beginning to echo the sentiments of the relatively rare voices of warning so often ignored in
the early 1990s.
The EU's recent expansion to the east has brought about a fundamental change not only
in its internal composition, but also in its relations with Russia. Russian policies towards
Eastern Europe now directly affect the EU, and this is why Russia's annexation of Crimea
and its support for separatist forces in eastern Ukraine following an armed upheaval in Kiev
cannot be ignored.
Russia's willingness to use military force through its annexation of
Crimea in order to maintain its influence over the Ukraine has raised concerns within Europe
concerning the extent of Russia's military and territorial ambitions, and some have begun to
question Europe's own military security vis-à-vis Russia.
However, EU expansion has
brought it into Russia's sphere of influence and as such it may not just be NATO that now
must play a vital role in ensuring European security.
In the case of the European Union, the issue of its dependency on Russian natural gas is
of paramount importance and is very relevant to recent developments in Ukraine. Not only
does it raise issues of the security, sustainability and economy of energy supply as such –
affecting the evolution of the European energy market and linked policies for instance on
9
climate change - but the acute dependence of some Eastern Member States on Russian
supplies can be seen as a constantly lurking threat to their political and general security.
Beyond this, however, the issue is one that touches on the continued integration and
development of the European Union itself.
Russia, in terms of population, wealth, armed forces and its continued preference for “oldworld” power politics, once again is felt by many to present the EU with a challenge to its
core ideals: not just in terms of liberal capitalism within various energy sectors, but also in
terms of sovereignty and free choice, solidarity and cohesion for its various nations and the
credibility of its common policies.
Yet there seems to be a distinct lack of support amongst the EU Member States, or their
corporate energy sectors, for enforcing a singular cohesive policy to counter this Russian
energy dependence. Politics or liberal ideals seem to have given way to the possibility of
massive profits as European companies vie for a piece of the Russian “energy pie”, wilfully
ignoring or subverting policies laid down by their own respective governments or those of the
EU. This disunity threatens the most basic theories/pillars of integration of the EU as its
Member States struggle to balance their own national economic interests vis-à-vis Russia
with the political interests and future integration and development of the EU. Nowhere can
this be seen more clearly than in the energy sector, where Russia has a very dominant
position in Europe’s oil and natural gas markets; and it is especially in the natural gas sector
that Russian influence is set to grow considerably in the near future.
Before addressing these problems in more detail, it may be reasonable to ask why EU
dependence on Russian energy is any worse than dependence on Middle Eastern oil, or on
Chinese-made solar panels? In answer, there are a number of factors that make the EU's
relationship with Russia unique. A key source of concern for the EU is that Russian foreign
policy seems to be increasingly inclining towards great-power politics as Russia's world-view
adheres to the dictates of neo-realism. Its behaviour in international bodies reflects not an
intergovernmental, but a unilateral or bilateral logic. Russia operates through a classical
great-power prism by which it feels that it is entitled to control a sphere of influence around
its borders, something that is both feared and greatly disliked by the EU, especially its
eastern Member States. Furthermore, the newly adopted concept of “sovereign democracy” a doctrine that has developed within Russia since the late 1990's and under which foreign
criticism or interference in its domestic politics is seen as a gross violation of its sovereignty is in direct contradiction to the principles of post-sovereignty and liberal intergovernmentalism
by which the EU operates, and as such makes cooperation between the two even more
difficult. More specifically, the non-transparent dealings and singular rights of the state
owned company Gazprom within Russian territory are another source of friction between the
10
EU and Russia, as the EU attempts to liberalize and unbundle the European energy market
of which Gazprom is an influential participant. This combination of disruptive or threatening
factors is not found among any of the EU’s other main energy sources, which are either
weaker in traditional power terms, or more distant, or both.
Despite all these practical and ideological differences, it has often been said that the
single biggest problem with regard to EU-Russo relations has always been that of a certain
“value gap”. Many analysts believe there to be a fundamental difference in thinking between
Europe and Russia when it comes to geopolitics and international relations. However,
whether or not the recognition of this gap will be enough for some EU Member States to
possibly risk their current energy supplies, or certain other economic benefits by souring their
relationship with Russia through their support for anti-Russian EU measures remains to be
seen. As of yet, this does not seem to be universally the case - which is precisely why the
question of EU dependence on Russian energy is of such vital importance.
1.1 Research Question and Methodology Against the background sketched above, the research questions addressed in this thesis will
be:
-
What is the state of the EU's energy dependence on Russia with regard to natural
gas?
-
What are the internal and external geopolitical implications of this dependence, also in
the light of the developing Ukrainian crisis?
-
To what extent have EU counter-strategies succeeded in minimizing the harmful
implications, now and for the future?
This thesis will make a qualitative assessment of the EU's energy security position in
relation to the extent and projected trend of European dependence on Russian natural gas.
Naturally such dependence is primarily measured from various quantitative data sets, but
any conclusions drawn from such data will be judged via a geopolitical or security standpoint,
thus remaining within the qualitative theoretical approach.
The geopolitical or security
significance of this dependence will be judged in the perspective of the past and present
foreign relations of Russia and Europe, and the linkage of these with Member-State relations
within the Union, as well as significance of the current Ukrainian crisis.
Source material for this thesis will range from government reports and proposals, and
relevant EU documents, to statistical data sets and policy analysis from both private and
public organizations and companies. Online news websites will be used for the most current
sources of information regarding recent political events or relevant background information.
11
Secondary sources from International Relations (IR) literature material will also be used,
especially with regard to the relevant international relations theories to be discussed in this
thesis.
Among written sources, this thesis will draw upon the work and ideas of various political
analysts coming from the Baltic States, eastern and Western Europe, and the U.S as well as
Russia. It therefore encompasses a wide range of views regarding EU-Russian relations
within the energy and general security sectors. The focus of this thesis remains, however,
solely on the effects on the EU as a whole; it does not seek to probe more deeply into the
impact on individual Member States than is necessary to address that larger question.
Although the source material used in this thesis is all in the English language, the varying
nationalities of the authors will hopefully help to maintain as balanced an approach as is
possible towards the subject matter.
1.2 Structure of the thesis In addition to this introduction, this thesis will consist of six chapters.
Chapter two provides the relevant theoretical and conceptual framework. This includes an
overview of the key theories of international relations that will be used to analyse and
evaluate the current state of relations between Russia – which follows the dictates of a neorealism-dominated approach - and the constructivist, liberal intergovernmental approach of
the EU. The relevance of these theories in relation to the internal dynamics of the EU itself,
i.e. the interplay between its Member States, will also be examined. In addition, key terms
pertaining to Russia-EU relations and relevant security concepts used throughout the thesis
will be explained and analysed.
Chapter three analyses the Russian hydrocarbon economy, Russia's presence on the
European energy market, its energy policies and the effects that these policies have on EURussian relations.
These relations will be examined against the broader backdrop of
Russian foreign policy in the post-Soviet sphere, namely Ukraine and Crimea, and the effects
that Russia's actions have on the EU in both the energy sector and the wider geopolitical
context. Among other things, the events and circumstances leading to recent disruptions in
natural gas supplies to Europe from Russia, and the consequent labelling of Russia as both
an “unreliable” source of energy and a politically aggressive and destabilising neighbour, will
also viewed and analysed.
The fourth chapter delves deeper into the energy security aspects of the Russia-EU
relationship and examines the extent of European dependence on Russian natural gas,
including the EU region’s energy infrastructure and energy policies. This chapter will also
cover the current state of European energy needs in terms of natural gas, together with
12
future projections. Further, the EU's own 2020 and 2050 energy roadmaps will be analysed
along with the possible effects these policies will have in relation to the EU's future energy
security.
Chapter five examines the internal divisions that exist within the EU with regard to efforts
to create a single energy market and the effects that individual projects, companies and
nations have had on this process. This part will focus on the following projects; the NordStream pipeline, the failed EU-backed Nabucco pipeline, and the proposed South-Stream
pipeline.
Further, the vital role of Germany with regard to EU-Russian relations will be
examined as well as those security and political threats facing certain EU Member States
outside the realm of the energy sector.
Chapter six provides a final summary and review of the strategies that the EU currently
employs or aims to employ to counter its energy dependence on Russia, assessing how far
these strategies have been successful or may work better in future. This chapter will also
revert to latest developments in the Ukrainian crisis and examine its effects on EU-Russian
relations in relation to energy dependence, from a theoretical perspective as well as a
general geopolitical one. Through the examination of two possible and contrasting future
scenarios, this chapter will try to ascertain what the most likely developments within the EU's
energy sector may be and analyse other effects that the crisis may have on future EURussian relations.
13
II. THEORETICAL FRAMEWORK
As already explained, efforts to explain past and current difficulties in EU-Russia relations (or
West-Russia relations more generally) have needed to posit an inherent difference in values
between the actors as well as sometimes conflicting material interests. This thesis, too, will
argue that problems arising in specific fields of interaction, such as energy relations, reflect
fundamentally different factors of identity, governance and world-view between the two sides.
To provide a broader framework for such explanations, this chapter introduces five major
theories of international relations that have prima facie relevance to EU-Russian relations
and EU integration: namely realism/neorealism, constructivism, federalism, neo-functionalism
and liberal intergovernmentalism. It then goes on to explain the general concepts of
“security” and the more specific concept of “energy security” in the framework of today’s
multi-functional understanding of “security” as a whole. This is then followed by a theoretical
summation of the EU and Russia using the relevant theories of international relations along
with a summary of certain key terms used throughout the thesis.
2.1 Classical Realism Realism, or classical realism as it is also known, is one of the most influential theories of
international relations.1
As a singular concept and theory of international relations, the
school of realism was formally born after World War Two as a counter-argument to a certain
strain of idealism growing out of the devastation of the two world wars, whereby many
believed that humans were in-fact inherently good and that there existed universally valid
principles from which nation-states could find common grounds for cooperation. Realism,
however, does not harbour such notions: it stresses that humans are inherently flawed, and
that recognizing and working with this reality is necessary if any progress is to be made in
the world.2 In fact, the manner in which realism views man and the world is by no means
new, with many notable historical figures such as Niccolo Macchiavelli, Thomas Hobbes and
Otto Von Bismarck having advocated similar ideas to those found within the school of
realism. These ideas center on an empirical and pragmatic view of the world and on its
recognition of what it claims is the inherent nature of man, which drives man to dominate and
constantly strive for more power.3
1
2
3
Robert O. Keohane, Power and Governance in a Partially Globalized World (New York:
Routledge, 2002), P39.
Hans J. Morgenthau, A Realist Theory of International Politics, In Politics Among Nations: The
Struggle for Power and Peace, ed. Kenneth W. T and W. David C (New York: McGrawHill.
2005), P3.
Hans J. Morgenthau, A Realist Theory of International Politics, In Politics Among Nations: The
Struggle for Power and Peace, ed. Kenneth W. T and W. David C (New York: McGrawHill.
2005), P4-5.
14
Hans Morgenthau, a German-born Jew who later immigrated to the United States before
world war two, was one of the leading proponents of what is now known as the realist school
within international relations. His belief was that when it comes to inter-state relations, it is
the protection of key interests4 by nation-states that dictates their actions. For Morgenthau
Political Realism consisted of six inherent principles. These start with the claim that objective
laws, grounded in an unchanging human nature, govern politics. The link between reason
and fact can be found in the interests of nation-states and these interests are objective and
universally valid.5 Furthermore, realism does not discount the moral and ethical aspects of
political action, but makes the distinction between the morality of individuals and that of the
nation-state.6 Finally, realism as a school of thought differentiates itself from others through
its claim that the political sphere is autonomous and that other considerations, whether they
are legal, moral or financial, will never supersede key political interests.7
2.1.1 Neo-­‐realism Working to refine and re-establish the oft-criticized tenets of classical realism within the realm
of international political study and discourse, Kenneth Waltz, an international relations
scholar and political scientist, developed neo-realism - or as he called it, structural realism.8
Neo-realism as a theory of international relations tried to look more systematically at
international relations than its predecessor had, focusing on systemic structures and general
principles of behaviour rather than the effects of human nature on politics.9 Neo-realism
states that the world is anarchical and hierarchical, that nation-states operate according to
their capabilities, and that survival is the key driving force for all nations.10 Neo-realism
asserts that all states have a drive to survive and that these states serve as units within a
wider system reacting to both internal and external pressures. Despite nation-states varying
in size, population, economic and other attributes, they all face the same challenges and do
not differ that much in that respect. What neo-realism claims separates nation-states are
4
5
6
7
8
9
10
Hans J. Morgenthau, A Realist Theory of International Politics, In Politics Among Nations: The
Struggle for Power and Peace, ed. Kenneth W. T and W. David C (New York: McGrawHill.
2005), P7.
Hans J. Morgenthau, A Realist Theory of International Politics, In Politics Among Nations: The
Struggle for Power and Peace, ed. Kenneth W. T and W. David C (New York: McGrawHill.
2005), P8.
Hans J. Morgenthau, A Realist Theory of International Politics, In Politics Among Nations: The
Struggle for Power and Peace, ed. Kenneth W. T and W. David C (New York: McGrawHill.
2005), P9.
Hans J. Morgenthau, A Realist Theory of International Politics, In Politics Among Nations: The
Struggle for Power and Peace, ed. Kenneth W. T and W. David C (New York: McGrawHill.
2005), P9-10.
Kenneth Waltz, Neorealism: Reductionist and Systemic Theories, In Neorealism and its Critics,
ed. Robert O. K. (New York: Colombia University Press. 1986), P 27-32.
Kenneth Waltz, Neorealism: Reductionist and Systemic Theories, In Neorealism and its Critics,
ed. Robert O. K. (New York: Colombia University Press. 1986), P 62.
Kenneth Waltz, Neorealism: Reductionist and Systemic Theories, In Neorealism and its Critics,
ed. Robert O. K. (New York: Colombia University Press. 1986), P 85.
15
their capabilities for tackling these common challenges. These capabilities then decide the
ranking of a nation-state within the anarchic hierarchy of the international system.11
Neo-realism was one of the most dominant theories of international relations until the
collapse of the USSR. The suddenness of the collapse caught the world and most of the
academic community by surprise. In an effort to explain what had happened, many scholars
saw an indication that neo-realism was too dismissive of reductionism in that it did not take
into consideration the internal factors of nation-states (unit level attributes), and thus the
theory itself was deeply flawed. In fact neo-realism does accept the relevance of unit level
attributes, but suggests that such reductionism has no real bearing when viewing systemic
structures or general principles within international relations.12
Neo-realism has also been deemed by some critics to be a gross over-simplification of
international relations, especially with regard to its vision of nation-states as singular
insulated units within a multi-unit hierarchy.13 This too is perhaps an oversimplification of the
position that neo-realism has on the matter, as it does in fact state that units within the
international system respond to both internal and external factors.14
Another common
criticism of neo-realism was its assertion that no nation-state would ever willingly give away
power, a premise that the existence and formation of complex interdependence between
nation-states through various international and supra-national organizations seemed to
contradict15. Despite the seemingly never-ending debate on the merits and weaknesses of
neo-realism as a theory, its legacy and continuing dominance within the field of international
theoretical discourse says a lot about its continuing relevance in modern-day inter-state
relations.
We shall see that some nation-states, or at least their leaders – such as Russia
and President Putin in the present case – may behave in a way that seems to reflect the
imperatives of (neo-)realism, even if this upsets the expectations of and relations with other
important international players.
2.2 Constructivism As a theory of international relations constructivism was born as a response to realism and
neo-realism’s ideas of the nation-state and international relations. Constructivism posits that
our societies, and therefore international relations between them, are socially constructed by
11
12
13
14
15
Kenneth Waltz, Neorealism: Reductionist and Systemic Theories, In Neorealism and its Critics,
ed. Robert O. K. (New York: Colombia University Press. 1986), P 91.
Kenneth Waltz, Neorealism: Reductionist and Systemic Theories, In Neorealism and its Critics,
ed. Robert O. K. (New York: Colombia University Press. 1986), P 42, P 60, P 68, P 328-329.
Keohane, Robert O. Power and Governance in a Partially Globalized World (New York:
Routledge, 2002), P43.
Kenneth Waltz, Neorealism: Reductionist and Systemic Theories, In Neorealism and its Critics,
ed. Robert O. K. (New York: Colombia University Press. 1986), P 91.
Richard K. Ashley, Neorealism: The Poverty of Neorealism, In Neorealism and its Critics, ed.
Robert O. K. (New York: Colombia University Press. 1986), P 278-281.
16
humans and that shared ideas, not interests, are what shape and influence these relations.
Furthermore, constructivism states that man’s identity is itself a construction which in turn
means that, contrary to what idealism or realism state, there is no inherent nature to man.16
Alexander Wendt is one of the most well-known constructivists.
In his famous article
“Anarchy is what states make of it”, Wendt discounts the neo-realist claims that the world is
inherently anarchical and hierarchical and that the nations and people of the world are
moulded by these same structures. In his article Wendt posits a very interesting question,
asking, “Does the absence of centralized political authority force states to play competitive
power politics?”17
This question is highly relevant in relation to the EU, the various
successes and failures of European integration, and relations between the Member States.
Wendt goes on to explain that constructivism is meant to act as a bridge between – on the
one hand - neo-liberalism and its belief in the power of international institutions to effect
change within the international system,18 and – on the other - neorealism's belief in the
anarchical nature of international relations and the importance of the nation-state. Neither
premise is discounted by constructivism, but it does dispute the sources for and immutability
of such institutions or structures.
Constructivism states that it is the process by which such institutions or structures are
created, and the ideals that lie at their root, that ultimately determine what shape they take and not the other way around. Wendt gives a good example of this when he discusses the
meaning of British nuclear missiles compared to those of the Soviet Union during the Cold
War and the completely different significance that these had for the U.S, despite the British
missiles being just as deadly and closer geographically to the U.S.19 The well-known concept
of a “friendly” vs. “unfriendly” state seems to support this notion that changes in internal
attributes and/or man-made relationships can affect the manner in which nation-states
interact with one another, with no obvious alteration in their capabilities or vital interests.
This in itself poses a direct challenge to the tenets of neorealism, but does correspond very
well with the integrationist evolution of the EU. It also further illuminates the challenges
posed for a would-be united Europe by the changing nature of Russian domestic politics
since the coming to power of President Vladimir Putin, and the reasons for deteriorating
political relations between the EU and Russia since the early 2000’s.
16
17
18
19
Maja Zehfuss, Constructivism in International Relations: The Politics of Reality (New York:
Cambridge University Press, 2002), P12-15.
Alexander Wendt, Anarchy is what states make of it: the social construction of power politics,
International Organization, vol. 46, no. 2. (1992): p391.
Alexander Wendt, Anarchy is what states make of it: the social construction of power politics,
International Organization, vol. 46, no. 2. (1992): p393-394.
Alexander Wendt, Anarchy is what states make of it: the social construction of power politics,
International Organization, vol. 46, no. 2. (1992): p397.
17
2.3 European Federalism From Kalergis’ “pan-Europa” movement in the 1920's to present-day calls for a more
integrated European Union, support for the creation of a federal Europe has been around for
a very long time. Following the Second World War there was increased support surrounding
the idea that a federal Europe might hold the answer to the problem of European aggression.
These federalists believed that constant warfare had stripped the European nation-states of
their right to rule, as they could no longer effectively protect their populations.20
Their
solution to such aggression lay in the creation of a large federal European state operating
under a single European constitution,21 much as the U.S is governed. Federalists argued for
the need for a united federal Europe mainly to counter any possible regional threats, but also
through the hope that such unity would discourage any possible hostile action from Europe's
large Soviet neighbour.
Although the idea of a federal Europe as an end-result was a common goal amongst
federalists, there was a lot of disagreement as to how this was to be achieved.22 The main
problem with federalism is that it is generally not accepted as a complete theory in that there
is really no specific or consistent process involved, and that it rather defines an end-result (in
EU parlance, ‘finalité’) without any clear method.23 Furthermore, the extent of federalisation
was another issue of dispute amongst federalists, who followed three differing approaches in
that regard: balanced, centralist and de-centralist. The prescriptions of these approaches
differed with regard to how far the nations of Europe would retain their autonomy, raising the
obvious yet vastly complex question of exactly what kind of a centralised governing body
should be created to govern the diverse nation-states of Europe, and to what extent the
national governments of Europe should participate within such a body.
Another problem facing federalists, besides the myriad of technical and political obstacles
needing to be overcome, was that the wholesale rejection of the existing European nationstate infrastructure and its replacement by a centralized federal form of governance was (and
still is) felt by most in Europe to be too extreme and ultimately untenable.24 The original and
20
21
22
23
24
Directorate General Internal Policies of the Union, Altiero Spinelli: European Federalist, by Lucio
Levi, Richard Corbett, Ortensio Zecchino, Roland Bieber, John Pinder, Paolo Ponzano, JeanLouis Quermonne, Philippe de Schoutheete. PE 410.673. (Brussels: European Parliament,
2009), P8.
Ben Rosamond, Theories of European Integration (New York: Palgrave Macmillan, 2000), P2324.
Finn Laursen, Federalism: From Classical Theory to Modern Day Practice in the EU and Other
Polities. InThe EU and Federalism: Polities and Policies Compared, ed. Finn Laursen, 3-27.
(Burlington: Ashgate Publishing Company, 2011) P3-4.
Finn Laursen, Federalism: From Classical Theory to Modern Day Practice in the EU and Other
Polities. InThe EU and Federalism: Polities and Policies Compared, ed. Finn Laursen, 3-27.
(Burlington: Ashgate Publishing Company, 2011) P12-17.
Ben Rosamond, Theories of European Integration (New York: Palgrave Macmillan, 2000), P2931.
18
still basic reason for this had to do with diverse national interests and the lack of any kind of
common European identity. The victorious nations of Europe had fought World War Two to
protect their sovereignty from aggressive German expansionism, and the idea of forfeiting
this hard earned independence in any shape or form did not sit well with many in Europe.
The rejection of sudden and ultimately uncertain change then led many federalists to believe
the answer to Europe's problems lay rather in gradual small changes; gradual federalism.
Such an approach was deemed much more realistic; and as a result many federalists
supported this approach of gradual integration (in the EU’s case, identified with applying the
‘Community method’ in wider and wider fields), believing it to be the key to one day achieving
a federalized Europe.
2.4 Functionalism Emerging after the First World War, the theory of functionalism follows a Positivist view and
maintains that selfish protection of interests through conflict is not inherent to human nature.
Functionalism holds that in a globally interconnected world the nation-state has become
obsolete, and that through incremental integration of existing nation-states a new supranational international system will result.25 Although the collapse of the League of Nations
and the outbreak of the Second World War did little to promote the legitimacy of the theory of
functionalism, it once again emerged as a dominant theory within post-World War Two
European theoretical discourse. The idea of uniting Europe without military conquest, but
rather through economic means, was a significant change from that of federalism in that
within the theory there was a process, but no fixed result.
Functionalism was a bottom-up
approach that began with areas of “low politics” and as a result did not represent as much of
a “threat” as that of federalism with its “high politics”, top-down approach.
2.4.1 Neo-­‐functionalism The reinvented theory of functionalism emerged almost as an answer to an already existent
phenomenon of gradual European integration following the Second World War. However,
unlike traditional functionalism, neo-functionalism rejects the universality of integration and
as such accepts the territorial boundaries of the European nation-states. Neo-functionalism
as a theory has to do with the process of regional integration, and identifies three interacting
factors that affect this process. These are economic interdependence, the organizational
and legal capacity to resolve disputes, and the replacement of national regulations by
supranational market rules26.
Neo-functionalism states that regional integration between
nations is possible through gradual sector overlapping called spill-over27. There are two
25
26
27
Ben Rosamond, Theories of European Integration (New York: Palgrave Macmillan, 2000), P31.
Ben Rosamond, Theories of European Integration (New York: Palgrave Macmillan, 2000), P 5158.
Ben Rosamond, Theories of European Integration (New York: Palgrave Macmillan, 2000), P 59-
19
kinds of spill-over, functional and political. Functional spill-over involves the economic and
industrial aspects of integration, whereas political spill-over involves the creation of multistate governing bodies which gradually graduate into the realms of “higher politics”. Neofunctionalism holds that the so-called “spill-over” effect will result in deeper and wider
integration across the entire spectrum of inter-state cooperation.28
Robert Schuman and Jean Monnet are generally thought of as being the most influential
architects of European integration,29 and although the two cannot strictly be called neofunctionalists, their ideas match quite well with the tenets of neo-functionalism.30 They too
believed that war in Europe could be prevented through gradual integration, at first through
economic and industrial ties which would then spill over into other areas and eventually into
the higher political sphere. The evolution of the European Union and its institutions to the
present day are testaments to the effectiveness of this method. However, the difficulties
facing the EU in terms of continued integration within some areas, notably the defence and
energy sectors, does indicate that there seem to be some barriers or limits to neofunctionalism and that spill-over may in fact not be an unstoppable or indeed irreversible
development.
2.5 Liberal Intergovernmentalism The underlying motivations for European cooperation have been a subject of endless debate
and arguments continue to this day regarding which theory most accurately applies to the
EU.
Whether it is federalism, functionalism, neo-functionalism, intergovernmentalism,
realism,
neo-realism
or
neo-liberal-institutionalism
(not
to
mention
constructivism),
proponents of these theories continue to try and vindicate the dominance of their theory for
application in the EU framework. One theory that has arisen as a challenge and alternative
to both the neo-functionalist and neo-realist viewpoints is liberal intergovernmentalism.
Andrew Moravcsik, a Professor of Politics at Princeton University, is one of the leading
proponents of the theory of liberal intergovernmentalism/institutionalism.
He argued that
contrary to what neo-realism claims, the interests of states could in fact be better served
through interdependence.31
28
29
30
31
Today, liberal intergovernmentalism as a theory is held by
60.
Ben Rosamond, The Uniting of Europe and the Foundation of EU studies: revisiting the
neofunctionalism of Ernst B. Haas. In The Disparity of European Integration: Revisiting
Neofunctionalism in Honour of Ernst B. Haas, ed. Tanya A. Börzel. 21-38. (New York:
Routledge, 2006), P27-28.
Finn Laursen, Federalism: From Classical Theory to Modern Day Practice in the EU and Other
Polities. InThe EU and Federalism: Polities and Policies Compared, ed. Finn Laursen, 3-27.
(Burlington: Ashgate Publishing Company, 2011) P10.
Stanely Henig, The Uniting of Europe: From Discord to Concord (New York: Routledge, 1997),
P21.
Anthony Forster, Britain and the Negotiation of the Maastricht Treaty: A Critique of Liberal
20
those who are more inclined to realist interpretations of inter-state cooperation, since - like
neo-realism - liberal intergovernmentalism sees the state as the basic unit within the
international system. According to Moravcsik there are essentially 6 core assumptions upon
which the theory of liberal intergovernmentalism rests. In brief, these assumptions are that
states are rational actors and that their respective governments are driven by economic
interests that in turn shape their national preferences. Nation states are then bound by their
own objective interests, determined by domestic pressures, resulting in bargaining driven
always
by
the
lowest
common
denominator.
Finally,
according
to
liberal
intergovernmentalism, issue areas are unconnected and only become linked as a last resort.
In this respect various issue areas can create predictable restraints on nation-states resulting
in particular foreseeable patterns of negotiation.32
Liberal intergovernmentalism and neo-functionalism are complementary in many aspects,
but liberal intergovernmentalism does not support the neo-functionalist notion that European
integration will always become deeper and wider. Rather, its tenets allow for the possibility
of regression as well as progression in European integration depending upon the domestic
constraints placed upon nation-states. In addition, this then means that the governments of
Member States are ultimately controlling the speed and extent of integration. This can result
in certain key strategic and security interests of nation-state being beyond the grasp of neofunctionalist integration if integration would negatively affect the interests of the nation-states
involved. In this respect liberal intergovernmentalism falls somewhere in the middle of the
theories of neo-realism and neo-functionalism, this in turn means that the possibility of there
one day being a federalized European Union may rest entirely upon which theory one is an
advocate of.
2.6 Security Concepts 2.6.1 Security in International Relations The concept of security within international relations has become very complex in recent
years as it has expanded to include various areas of study that previously were not felt to fall
within the traditional realm of security “proper”. Even prior to this expansion the concept was
loaded with ambiguity due to the inherent semantic difficulties and problems in defining
exactly what one is speaking of when one talks about “national security”.33 One nation may
have a powerful military, but at the same time lack political stability. Another may have
32
33
Intergovernmentalism. Journal of Common Market Studies Vol. 36, no.3 (September 1998):
P349.
Anthony Forster, Britain and the Negotiation of the Maastricht Treaty: A Critique of Liberal
Intergovernmentalism. Journal of Common Market Studies Vol. 36, no.3 (September 1998):
P350.
David A. Baldwin, The concept of security, Review of International Studies, no. 23, (1997): P68.
21
immense natural resources whilst being militarily weak. The question remains which of those
nations is more secure, and what are their security interests in relation to one another?
For the purposes of this thesis and in order to effectively establish a clear conceptual
basis for the term “security”, the definition supplied by David A. Baldwin in The Concept of
Security will be used. This states that security is a state’s ability to lower the probability of
damage to acquired values.34 This definition is quite useful in that it does not need to posit
the presence of danger or its actual nature and extent. Instead, it stresses the response
rather than the danger, and thus can apply to the challenges posed for a given polity by
anything from natural disasters to military aggression. This also corresponds very well with
what non-traditionalists such as Ole Wæver believe, when they stress that the concept of
security can and should apply to various differing levels of human experience and
governance, and should not just the revolve around the military or the predicament of single
states as was traditionally the case up to the 1970’s. These non-traditionalists state that any
sector has its potential security threats, whether they are economic, political or even
environmental,35 and that these sectors are far from independent of one another. Although
acknowledging the problems that this multi-functional or multi-dimensional vision poses for
academic analysis as well as for coordinated management of the challenges, Wæver´s
followers insist that these findings from different sectors must be reassembled to gain a wider
understanding of the system as a whole.36
A regional approach to security studies attempts to provide a larger understanding of the
security issues at stake outside the normal framework of single states, taking account also of
group interactions and institutional processes, and as such is very relevant to this thesis. Our
topic concerns, precisely, a non-traditional security sector (energy) in a regional context (the
wider Europe).
For these purposes, however, a general definition of security is still too
broad. As David A. Baldwin points out in his article The Concept of Security, there are two
questions that need to be asked in order to be able to use his definition of security in an
efficient and specific manner: whose security is in question, and what values are at risk?37
For the purpose of this thesis, the 'acquired value' in Baldwin's terms is energy (more
specifically natural gas), and the actor in question is the EU and its Member States.
34
35
36
37
David A. Baldwin, The concept of security, Review of International Studies, no. 23, (1997): P1213.
Barry Buzan et al, Security: A New Framework for Analysis, (London: Lynne Rienner
Publishers, 1998), P3.
Barry Buzan et al, Security: A New Framework for Analysis, (London: Lynne Rienner
Publishers, 1998), P7-8.
David A. Baldwin, The concept of security, Review of International Studies, no. 23, (1997): P13.
22
2.6.2 Energy Security Secure and stable sources of energy are crucial for any nation state's economic, political and
military security.38 The concept of “energy security”, however, did not become a key issue in
international theoretical discourse until after the oil crises of the 1970's.39 At its core the
concept of “energy security” was at first concerned with the reliability of energy supplies and
the consequent effects that this had on defensive and military capabilities of nation states40.
Energy security has continued to have key military applications ever since World War Two,41
however, the oil crises of the 1970's underlined the vital way in which every aspect of a
state’s infrastructure – and hence its whole economy - could be affected by disruption in the
energy sector. They highlighted the realities of global interdependence in this context, and
the need for every nation to have a coherent energy policy as part of overall security
strategy. When oil became recognized as an instrument of foreign policy, other hydrocarbon
energy sources were sure to follow; and today it is natural gas that is gaining traction as the
next most important source of energy in the world.
Until the 1990's, despite acknowledgement of the secondary effects that energy security
could have on a nation's entire infrastructure, the focus of such studies primarily concerned
the ultimate effects of energy security on a nation's military power. Since the early 1990's
the concept of energy security has evolved to include the environmental consequences42 of
energy consumption and exploitation of resources, as well as the international political
effects that certain economically motivated foreign policies of nation states can have.
Variable global interdependence in the energy sector between producers, transit states and
consumers brings an added layer of complexity to the equation, not to mention the inherently
destabilizing effect of a global energy market where predicting energy prices becomes
increasingly difficult - thereby increasing political and economic uncertainty for all parties.43
Ideally, all nations strive for the biggest domestic capacity for energy production that they
can achieve in order to minimize their dependence on foreign supplies of energy. That said,
however, energy producing nations like Russia rely heavily on consumer nations such as
38
39
40
41
42
43
Mehmet Efe Biresselioglu, European Energy Security: Turkey's Future Role and Impact (New
York: Palgrave Macmillan, 2011), P12.
Mehmet Efe Biresselioglu, European Energy Security: Turkey's Future Role and Impact (New
York: Palgrave Macmillan, 2011), P10-11.
Mehmet Efe Biresselioglu, European Energy Security: Turkey's Future Role and Impact (New
York: Palgrave Macmillan, 2011), P9.
Mehmet Efe Biresselioglu, European Energy Security: Turkey's Future Role and Impact (New
York: Palgrave Macmillan, 2011), P10.
Mehmet Efe Biresselioglu, European Energy Security: Turkey's Future Role and Impact (New
York: Palgrave Macmillan, 2011), P16.
Aldo-Flores Quiroga, The Challenge Of Energy Interdependence And The Global Energy
Dialogue, in 13th International Energy Forum (Kuwait: IEF, 2012), P8-9.
23
those of the EU for income,44 meaning that abundance of domestic energy does not preclude
another kind of dependence such as a financial or a technological one. Almost all of the
world's nations are dependent on some type of foreign energy supply, whether it is natural
gas, petroleum, coal, or fissile materials for nuclear energy production. Even renewable
sources of energy like solar panels or wind-powered generators require immense
technological expertise, foreign production facilities and rare earth materials gained only
through international cooperation.45 Interdependence in the energy sector is, therefore, an
unavoidable aspect of international relations and presents nations with numerous economic,
technological, political and environmental security concerns.
A further possible layer of analysis provided by another concept pioneered by Ole Wæver
(among others) is that of securitization. This concept states that any issue can be made into
a security issue through the appropriate speech acts between a defining authority and its
audience, and with enough resulting support. In other words, although supplier-customer
relations in the energy world may always have some inherent security implications – both
positive and negative – it is through human choices, statements, and the response to those
statements that these implications are brought into the open and given a 'security' label for
good or ill. This concept is very interesting in the context of energy security within the EU in
relation to Russia. The ability of the EU to 'securitize' the issue of energy through language
(in this case, communications by its various institutions and debate among the Member
States) may indeed help push its members towards further integration within that sector,
whilst simultaneously labelling Russia – in this context too – as a sudden security threat.
The importance of language, therefore, in the context of security cannot be ignored; and this
thesis will also take into consideration the language being used by both the EU and Russia.
2.7 Russian realism vs. European liberal intergovernmentalism In terms of international theoretical discourse, the premises upon which the EU and Russia
are judged to act seem inherently at odds with one another.46
As far as international
organisations are concerned the EU is quite a unique political and economic experiment. As
a result of its intergovernmental nature, it cannot operate according to the same principles as
a singular nation-state with a centralised form of governance. It relies upon the willing
cooperation of all its Member States, who are all formally equal members despite the fact
that they all differ in size, population, wealth and international status. Such an organizational
44
45
46
Deutsche Welle, Europe has little reason to fear Russian gas cut-off, DW, date published:
unknown, http://www.dw.de/europe-has-little-reason-to-fear-russian-gas-cut-off/a-17480530
Michael T. Klare, Europe’s resource dilemma: Escaping the dependency trap, Europe's World,
21 March, 2014, http://europesworld.org/2014/03/21/europes-resource-dilemma-escaping-thedependency-trap/#.U_HncNavgjg
Laure Delcour, Shaping the Post-Soviet Space: EU Policies and Approaches to Region-Building
(Farnham: Ashgate, 2011), P57.
24
structure precludes any use of force or “hard power” by the EU and in fact, such action would
be counterproductive for further EU efforts of integration that follow a neo-functionalist
approach of slow sectoral integration resulting in spill-over into other sectors. The EU must
constantly find a balance between the interests of the Union as a whole and that of the
various nations it comprises; as such, it is often found to be a difficult and complex
international actor for other states like Russia to deal with.47 Exactly what the final form the
EU will take is a matter of much theoretical debate, but there is a general consensus - among
both proponents and opponents of further integration – that if the EU’s current development
is not interrupted or dismantled, a federal European Union is the most likely outcome.48
The EU Member States, however, operate not only according to the EU’s collective tenets
of liberal intergovernmentalism and neo-functionalism, but also in ways that frequently reflect
neorealism's self-helping dictates, both in their relations with the EU and third party states.
On the one hand, some basic requirements of European states like territorial defence cannot
(currently) be met within the EU system; and on the other, even within the fields of EU
competence, the EU's Member States must strike a balance between their own countries’
interests and those of the Union - a process that can often prove difficult.49 However, the
very fact that they have chosen to participate in this Union demonstrates that the overall
preferred theoretical basis from which these states operate is one of dialogue, cooperation
and bargaining. This form of intergovernmental cooperation by which nation-states willingly
give up certain aspects of their sovereignty is often called post-sovereign; and it contrasts
sharply with the manner in which Russia chooses to operate both in an international and
domestic context.50
Russia does not accept the theoretical premise of post-sovereignty and views it as a
possible threat to its own sovereignty.51 Furthermore, Russia operates via classical great
power stratagems and follows the tenets of neorealism.52 Russia prefers bilateral relations to
intergovernmental organisations53 and often employs divisive policies and tactics towards
47
48
49
50
51
52
53
Desmond Dinan, Ever Closer Union: An Introduction to European Integration (UK: Palgrave
Macmillan, 2010), P497.
Finn Laursen, Federalism: From Classical Theory to Modern Day Practice in the EU and Other
Polities. InThe EU and Federalism: Polities and Policies Compared, ed. Finn Laursen, 3-27.
(Burlington: Ashgate Publishing Company, 2011) P10.
Harrop, Jeffrey, The Political Economy of Integration in the European Union (Massachussetts:
Edward Elgar Publishing Inc, 2000), P313.
Dmitry Danilov, Russia and the ESDP: Partnership Strategy versus Strategic Partnership, in
The Changing Politics of European Security: Europe Alone? ed. Stefan Ganzle and Allen G.
Sens, 135-160. (UK: Palgrave Schol, 2007), P151.
Hiski Haukkala, The EU-Russia Strategic Partnership: The Limits of Post-Sovereignty in
International Relations (New York: Routledge. 2010), P105.
Fabrizio Tassinari, Why Europe Fears Its Neighbours (Santa Barbara, CA: Praeger, 2009), P76.
Edward Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P137.
25
other states in order to ensure its own interests.54 In that sense it does not view the EU as a
singular international actor, but rather chooses to interact with the more powerful states
within the EU which it considers to be the “real” decision makers within the Union.
55
Furthermore, Russia's actions both past and present vis-à-vis many post-Soviet countries
exhibits a preference for “hard power” solutions to inter-state problems rather than the type of
“soft power” more often employed by the EU.56 The contrasts between the EU and Russia
are, therefore, quite substantial in theoretical terms.57
2.8 Some Key Terms 2.8.1 Sovereign Democracy The concept of sovereign democracy is mentioned a few times in this thesis, and in view of
its complexity and importance to any understanding of Russia's current domestic political
situation, the term itself will be explained in more depth here.
Sovereign democracy in
Russia is a result of numerous political and economic developments within the country
following the collapse of the Soviet Union. The unprecedented rate of disintegration of the
Russia's international status, its economy and political establishments led many in Russia to
blame western interference in their domestic politics and economic sectors for the upheaval.
Failed privatization efforts such as the loans for shares program, as well as the preferential
status of the new class of oligarchs and their questionable methods in buying publicly owned
business and industrial sectors for a very small percentage of their real worth, all contributed
to the view that western democracy and capitalism only served western business interests as
well as the rich and the political classes of Russia.
The coming to power of Vladimir Putin, a former KGB colonel, heralded a change in
Russia's political and economic course both internationally as well as domestically.58
Brought to power by the very same oligarchs he would later exile or imprison, Putin and his
political entourage follow a blend of resource nationalism and managed democracy which
they call sovereign democracy.59 This entails limiting the ability of foreign powers to influence
Russian domestic politics60 whilst also ensuring that no real domestic political opposition
54
55
56
57
58
59
60
Edward Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P166.
V.G Baranovskii, Russia's attitudes towards the EU: Political aspects (Berlin: Institut für
Europäische Politik, 2002), P46-47
Pavel K. Baev, The Russian Federation: Striving for multipolarity but missing the consequences,
in Great Powers and Strategic Stability in the 21st Century: Competing Visions of World Order,
ed. Graeme P. Herd, 117-131. (New York: Routledge, 2010), P132.
Andrei Zagorski, The Limits of a Global Consensus on Security: The Case of Russia, in Global
Security in a Multi-polar World, ed. Luis Peral, 67-83. (Paris: Institute for Security Studies,
2009), P69.
Margot Light, Foreign Policy Thinking, in Internal Factors in Russian Foreign Policy. 33-100.
(New York: Oxford University Press Inc, 1996), P87.
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P49.
Hiski Haukkala, The EU-Russia Strategic Partnership: The Limits of Post-Sovereignty in
International Relations (New York: Routledge. 2010), P102.
26
exists. It further requires that the state maintain control over key energy sectors61 which in
this case are oil and natural gas.62 Putin and his political party have managed to use public
anger about the perceived loss of prestige following the collapse of the Soviet Union, in
conjunction with nationalist feelings, to solidify their control of the country. This state of
affairs is what the Russian government calls sovereign democracy. It is an approach that
has set the tone for much of Russia's relations with the west and is, therefore, an integral
factor in understanding the current state of affairs between the EU and Russia.63
2.8.2 Value-­‐gap Another term mentioned quite often in the source material used in this thesis that is of great
importance with regard to Western-Russian relations is that of value-gap.64 This term is
meant to encompass a wide range of differing ideals between the two parties in relation to
politics, ethics, national governance and the theoretical underpinnings in a societal context.
That said, the very notion that Russia is fundamentally different from Europe is itself plagued
with inconsistencies and old prejudices. Generally, the concept is used in the literature to
explain an inherent ideological difference between Russia's traditional Realpolitik approach
to inter-state relations and that of the EU and other international organizations with their postsovereign, liberal intergovernmental approach to inter-state relations.65 It is distinct from an
analysis based upon differing material interests66.
2.8.3 The Post-­‐Soviet Space The notion of the post-Soviet space is one that is touched upon numerous times in this
thesis. Although the term is generally meant to encompass those 15 nations that emerged
from the Soviet Union following its collapse, for the purposes of this thesis this does not
include nations within the Caspian and Central Asian regions (Turkmenistan, Armenia,
Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan) but rather those nations
situated between Russia and the EU. Although the other nations are certainly part of the
post-Soviet space, and often have a role in the energy economy, they do not factor as
heavily as the western republics do into European-Russian relations with regard to the
enlargement of the EU and expansion of NATO. Furthermore, in the context of European
energy security, with the exception of Turkmenistan in relation to the Nabucco pipeline
61
62
63
64
65
66
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P63.
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P31.
Laure Delcour, Shaping the Post-Soviet Space? (Farnham: Ashgate, 2011), P57.
Hiski Haukkala, The EU-Russia Strategic Partnership: The Limits of Post-Sovereignty in
International Relations (New York: Routledge. 2010), P168.
Hiski Haukkala, The EU-Russia Strategic Partnership: The Limits of Post-Sovereignty in
International Relations (New York: Routledge. 2010), P109-110.
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P83.
27
project, any reference to the post-Soviet space within this thesis does not imply the inclusion
of these particular nations.
2.8.4 Sphere of Influence The area encompassing what Russia considers to be its rightful sphere of influence, also
often called the “near-abroad”, includes most if not all nations of the former Soviet space.
This particular concept is a source of considerable friction between Russia and the EU,
reflecting as it does the direct correlation that Russia sees between its immediate geopolitical
security interests and its ability to influence and interfere in the domestic affairs of those
nations falling within its sphere of influence.67 Although western critics have described such
interference as neo-imperialist, Russia chooses to interpret its actions as post-imperialist
adjustments68 that must be made in order to secure Russian interests given what Russia
sees as the inherent weaknesses of its neighbouring states.69 Furthermore, Russia sees
what it calls western-backed democracy promotion schemes within these post-Soviet
countries as being inherently destabilising, and as a result resents any interference70 by
western states within the post-Soviet space.71
67
68
69
70
71
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P25.
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P80.
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P25.
V.G Baranovskii, Russia's attitudes towards the EU: Political aspects (Berlin: Institut für
Europäische Politik, 2002), P85.
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P30.
28
III. THE RUSSIAN PARTNERSHIP
The European concept of Russia as a backward country that poses a political and military
threat stretches back for centuries,72 and the aspirations of the Russian nation itself have
been viewed with considerable scepticism by the nations of Europe for just as long.73 That
being said, for all its contradictions and muddled domestic politics, when it comes to foreign
relations Russia is in fact not a “riddle wrapped in a mystery inside an enigma” as Sir
Winston Churchill once wrote.74 Rather, it has shown itself to be quite consistent in its use of
great power realism when it comes to international relations, wherein might equals right. The
rise of the brutal communist regime in Russia at the beginning of the 20th century and the
subsequent annexation of much of Eastern Europe under Stalin following World War Two
were perhaps extreme examples of such realist policies, but their effects on Russia’s image
in Europe only served to further instil suspicion and fear of all things Russian within
European political and ideological discourse.75
The collapse of the Soviet Union in the 1990's brought about a temporary change in
attitudes in Europe regarding Russia, and granted Western governments rare access to
Russia's sovereign affairs through various economic and democratic initiatives. However, the
rampant political corruption, the rise of the super-rich oligarchs through questionable
business practices, and the economic disasters of the 1990’s that culminated in the financial
crash of 1998 left little trust in western capitalist or democratic ideals within Russia.76 The
NATO bombing of Belgrade in 1998 also did great damage to Russian popular opinion
regarding the west77 and made it clear to Russia's leaders that NATO was not an
organisation that would take Russian interests into consideration.78 Since the early 2000's
Russia's economic resurgence and increasingly assertive and aggressive policies towards its
western neighbours have once again brought the issue of Russia to the forefront of
European security concerns.79
72
73
74
75
76
77
78
79
M.E. Price, Memory and Power in Post-War Europe: Studies in the presence of the past, ed.
J.W Muller (Cambridge: Cambridge University Press, 2002), P123, P134.
M.E. Price, Memory and Power in Post-War Europe: Studies in the presence of the past, ed.
J.W Muller (Cambridge: Cambridge University Press, 2002), P121.
Sir Winston Churchill, The Russian Enigma, The Churchill Society-London, 1St October, 1939,
http://www.churchill-society-london.org.uk/RusnEnig.html
M.E. Price, Memory and Power in Post-War Europe: Studies in the presence of the past, ed.
J.W Muller (Cambridge: Cambridge University Press, 2002), P121-123.
James M. Goldgeier, Power and Purpose: U.S Policy Towards Russia After the Cold War
(Washington D.C: Brookings Institution. 2003), P233, P246.
James M. Goldgeier, Power and Purpose: U.S Policy Towards Russia After the Cold War
(Washington D.C: Brookings Institution. 2003), P247-249, P253.
James M. Goldgeier, Power and Purpose: U.S Policy Towards Russia After the Cold War
(Washington D.C: Brookings Institution. 2003), P265.
Lenard J. Cohen, Security Perspectives in Post-Communist Eastern Europe: "Easternization"
and "Europeanization," in The Changing Politics of European Security: Europe Alone? ed.
29
3.1 NATO and Russia Traditionally speaking, it was the military security of Europe vis-à-vis Russia that was at the
forefront of European security concerns during the Cold War, and NATO's supreme task was
to defend western territory through deterrence. Following the collapse of the Soviet Union
and the Warsaw Alliance, many Russian policy-makers felt it was only a matter of time
before the west would respond in kind and NATO itself would be disbanded due to the fact
that Russia no longer presented a military threat to Europe.80 Many in the West did not share
such sentiments, however,81 and instead of being disbanded, NATO grew. The eastward
expansion of NATO has been a major source of friction between Russia and the west since
the late 1990's,82 with Russia still claiming that Gorbachev had been “promised” (by the then
U.S President Bush) that NATO would not expand eastward,83 a promise that was then
“broken” only a few years later.
Map 1 - NATO Expansion 1949-201484
80
81
82
83
84
Stefan Ganzle and Allen G. Sens, 47-66. (UK: Palgrave Schol, 2007), P63-64.
James M. Goldgeier, Power and Purpose: U.S Policy Towards Russia After the Cold War
(Washington D.C: Brookings Institution. 2003), P183.
James M. Goldgeier, Power and Purpose: U.S Policy Towards Russia After the Cold War
(Washington D.C: Brookings Institution. 2003), P42.
Dmitri Trenin and Peter Van Ham, Russia and the United States in Northern European Security
(Kauhava: Ulkopoliitinen Instituutti & Institut fur Europaische Politik, 2000), P31.
James M. Goldgeier, Power and Purpose: U.S Policy Towards Russia After the Cold War
(Washington D.C: Brookings Institution. 2003), P184.
The Economist, The Future of NATO, The Economist, 11 November, 2010,
http://www.economist.com/node/17460712
30
The reasons for Russia's continuing anti-NATO stance are numerous. First and foremost,
the continued existence of a military alliance created solely for the purpose of repelling an
invasion from Russia and Eastern Europe is seen in Russia as an odd if not hostile position
for the west to take, considering that the Soviet Union and its Warsaw Pact Alliance
collapsed 23 years ago.85
Further, Russia sees NATO mainly as an instrument of U.S
military power that exists to maintain and extend U.S influence within Europe, and less so as
a means of defence for the nations of Europe.86 The end of access to the formerly Russian
dominated arms-markets of the central and eastern European nations, as these were
absorbed in NATO, is also another development that Russia resents as it has resulted in
some expensive losses for the Russian government.87 Last but not least, right up to the
present, the prospect of any state of the former Soviet Union (beyond the three Baltic
nations) joining NATO has been Moscow's most visceral fear.
3.2 EU Enlargement Even if these NATO issues have posed the most dramatic problems in Europe's relations
with Russia, another essential geopolitical factor that cannot be overlooked in the strategic
context has been the concurrent and overlapping eastward expansion of the EU towards
Russia's western border in 2004 and 2007. Not only did these enlargements fundamentally
change the nature of the relationship between the two - as it brought the EU into what Russia
considers to be its “sphere of influence” - but they also changed the internal dynamics of the
EU with regard to Russia through the accession of several post-soviet states.88
Russia's attitude towards the EU was relatively positive at the beginning of the 21st
century. The EU offered Russia a possible means to counter NATO, and therefore, U.S
influence, through its own security and defence initiatives designed to appeal to at least
some Europeans. Further, the ability of Russia to engage with Europe's largest nations in
various policy areas without the U.S having a say was also seen as a generally positive
development by the Kremlin.89 This attitude was to change considerably when in 2004 and
2007 the EU expanded eastward into Russia's “sphere of influence” through the accession of
85
86
87
88
89
James M. Goldgeier, Power and Purpose: U.S Policy Towards Russia After the Cold War
(Washington D.C: Brookings Institution. 2003), P183.
Cogan, Charles G. The Third Option: The Emancipation of European Defense, 1989-2000
(Westport: PRAEGGER. 2001), P136.
Dmitri Trenin and Peter Van Ham, Russia and the United States in Northern European Security
(Kauhava: Ulkopoliitinen Instituutti & Institut fur Europaische Politik, 2000), P41.
S.W. Jacek, Security and defence in the enlarged Europe, in What Ambitions for European
Defence in 2020?, ed Alvaro de V (Paris: Institute for Security Studies, 2009), P151-152.
V.G Baranovskii, Russia's attitudes towards the EU: Political aspects (Berlin: Institut für
Europäische Politik, 2002), P36, P41.
31
twelve central, eastern, and southern European nations, something many analysts predicted
might cause future difficulties in Russian-EU relations.90
The 1999 enlargement of NATO through the accession of Poland, Hungary and the Czech
Republic had itself done little to improve Russian-European relations.91 However, when 7
more central and eastern European countries joined NATO only a month before the EU's
enlargement on the 1st of May 2004 - to be followed by Bulgaria and Romania 3 years later Russia began to view the EU as a sort of “back-door” entryway into NATO for former Sovietspace countries.92
The fateful decision by the EU to almost double the number of Member
States in a span of only 3 years was one that would have greatly altered any international
organization. In the case of the EU, this eastward expansion fundamentally changed its
relationship with Russia, not just for geo-strategic reasons but because Moscow (with some
reason) feels that many of the new EU Member States continue to exhibit a certain antiRussian zeal.93
Map 2 - EU Enlargement 1958-201394
90
91
92
93
94
V.G Baranovskii, Russia's attitudes towards the EU: Political aspects (Berlin: Institut für
Europäische Politik, 2002), P85.
V.G Baranovskii, Russia's attitudes towards the EU: Political aspects (Berlin: Institut für
Europäische Politik, 2002), P125.
V.G Baranovskii,, Russia's attitudes towards the EU: Political aspects (Berlin: Institut für
Europäische Politik, 2002), P106-107.
V.G Baranovskii,, Russia's attitudes towards the EU: Political aspects (Berlin: Institut für
Europäische Politik, 2002), P139.
Learn-Europe,
Enlargements,
Learneurope,
date
published:
unknown,
http://www.learneurope.eu/index.php/en/temas/history/
32
Another source of concern for Russia regarding EU enlargement to the east is the fear
that there will be a gradual replacement of Russia by the EU as the region's main trading
partner, thereby damaging Russia's bilateral relations and trade with the former Warsaw Pact
countries.95 The sudden stringent visa requirements set by the EU's new eastern Member
States following their accession, which impact most immediately on Russian (and
Belarusian) citizens, is another source of tensions that greatly affects many Russianspeaking minorities within the Baltic States (as well as the Russian exclave of Kaliningrad)
and is greatly resented by Russia.96
3.3 EU-­‐Russian Cooperation Despite there still being numerous issues of contention between Russia and the EU there
have been some successful measures taken to improve and enhance relations between the
two. The Partnership and Cooperation Agreement (PCA) was one such initiative that came
into force in 1997.97 The PCA was intended to improve bilateral relations between Russia
and the EU in the political, economic and cultural sectors by creating a common framework
from which both parties could work.
The EU then later developed its European
Neighbourhood Policy (ENP) that was intended to create a similar framework of cooperation
on multiple levels between it and various other nation-states.98 Originally the EU intended to
create a similar ENP agreement for Russia. However, Russia felt that the ENP did not
correspond to the kind of equal partnership that it was looking to foster with the EU. In
response the EU then came up with a new initiative called the four EU-Russia 'common
spaces'.
This common spaces agreement took over from the 1997 PCA in 2003 and
consisted of an agreed program to work towards a common economic space, common space
of security, justice and freedom, a common space of external security and a common space
of research and education. In terms of EU governance and funding, ultimately it operates in
the same way as the EU's other ENP agreements.
Another important milestone for Russia, in which it was aided greatly by the EU, was the
membership of the World Trade Organisation (WTO) that it gained in 2012 after more than
18 years' efforts. Membership of the WTO granted Russia better access to international
markets and opened up possibilities for foreign investment. It also meant the lowering of
Russian import and export tariffs, which also benefited the EU, as Russia is its 3rd largest
trading partner. So far Russia has capitalised on its membership of the WTO, even going so
95
96
97
98
Dmitri Trenin and Peter Van Ham, Russia and the United States in Northern European Security
(Kauhava: Ulkopoliitinen Instituutti & Institut fur Europaische Politik, 2000), P35.
Dmitri Trenin and Peter Van Ham, Russia and the United States in Northern European Security
(Kauhava: Ulkopoliitinen Instituutti & Institut fur Europaische Politik, 2000), P36.
Laure Delcour, Shaping the Post-Soviet Space: EU Policies and Approaches to Region-Building
(Farnham: Ashgate, 2011), P28-29.
Laure Delcour, Shaping the Post-Soviet Space: EU Policies and Approaches to Region-Building
(Farnham: Ashgate, 2011), P10-12.
33
far as to use the organisation to bring a number of cases against the EU where the EU has
responded in kind.99
The EU and Russia, therefore, have numerous common areas of cooperation, especially
in relation to the economic sector. However, negotiations between the EU and Russia, both
with regard to the PCA and the four common spaces agreement, were very difficult and
lengthy processes and in important ways have remained unfulfilled. For instance, a planned
update of the PCA has repeatedly been postponed, and commentators criticize the lack of
Russian interest in cooperation in the non-economic aspects of the four common spaces.100
One key difficulty facing the EU in its relations with Russia has been Russia's insistence on
equal partnership and recognition of its status as a great power. In purely economic terms
this is difficult for the EU, which is an international economic giant operating at a far more
advanced level of market regulation and compliance; besides, the EU is not willing to accept
the political implications that such recognition might entail.
Another significant milestone between Russia and the EU was reached in 2013 when the
EU and Russia concluded a roadmap regarding EU-Russian energy relations up to the year
2050. This roadmap foresees Russia and the EU sharing a common energy market by the
year 2050.
The report acknowledges possible uncertainties and concerns by Russia
regarding natural gas and the EU's energy market reforms, but nevertheless projects that the
EU will remain Russia's largest gas market in the near future (the practical background to this
is explained further below).101 The roadmap is lacking in insight in one particular aspect, as it
does not touch upon the broader political and security relations between the EU and Russia
and any possible ramifications that could result from difficulties in that respect. Considering
the sensitive and politicised nature of energy relations between the EU and Russia in recent
years this is perhaps understandable, although the absence of such discourse is quite
striking.
Returning to the broader picture: with Georgia continuing to appeal for NATO
membership, with an increasingly pro-Western government in Moldova, and public
pronouncements of support from NATO to the current authorities in Kiev, Russia finds itself
faced with the possibility of almost its entire western flank being surrounded by NATO
members102.
99
100
101
102
Although NATO itself claims that it does not pose any military threat to
WTO, Map of Disputes Between WTO Members, WTO, date published: unknown,
http://www.wto.org/english/tratop_e/dispu_e/dispu_maps_e.htm?country_selected=RUS&sense
=e
Hiski Haukkala, The EU-Russia Strategic Partnership: The Limits of Post-Sovereignty in
International Relations (New York: Routledge. 2010), P134-137.
European Commission, Roadmap - EU-Russia Energy Cooperation until 2050, (Brussels:
European Commission, 2013), P10.
Dmitri Trenin and Peter Van Ham, Russia and the United States in Northern European Security
34
Russia103, membership of NATO by its western neighbours does, however, present Russia
with the very real possibility of being unable to interfere as freely as it considers necessary in
the domestic affairs of those states it deems to fall within its sphere of influence. In the
practical terms of controlling oil and gas pipeline infrastructures, this could spell disaster for
Russian dominance in its surrounding regions and could also facilitate the entrance of
western oil and gas companies into the Russian sphere104.
In sum, therefore, and even before taking the latest Ukraine-related crisis into account,
relations between Russia and the EU have remained diverse and complex. Despite some
positive achievements attained through the PCA and four common spaces, political
disagreements over NATO, EU enlargement and the post-soviet space as well as more
technical setbacks have kept the relationship inherently fragile. Should Russia choose to
conclude that EU involvement within its sphere of influence is ultimately detrimental to its
interests within those countries, then it is likely that Russia's policy towards the EU may take
a turn for the worse in the near future.
3.4 Russia's Hydrocarbon Economy Industrial exports remain a large part of Russia's GDP as it is mainly a producer of raw
material goods. Oil and natural gas provide the majority of the Russian state's industrial
revenue105 and hydrocarbons are, therefore, the main source of Russia's influence in Europe.
However, that very influence is mitigated to some extent through Russia's resource based
economy which relies heavily upon the European energy markets for its income and as such
is susceptible both to price fluctuations in oil as well as to foreign economic influence106.
High oil prices during the past decade have, however, allowed Russia to accumulate 475
billion dollars in hard currency reserve and 1.5 trillion dollars in assets greatly boosting its
influence and autonomy on the international stage.107
103
104
105
106
107
(Kauhava: Ulkopoliitinen Instituutti & Institut fur Europaische Politik, 2000), P32.
NATO, Russia’s accusations - setting the record straight, NATO, 01 July, 2014,
http://www.nato.int/cps/en/natolive/topics_111767.htm
Center for Strategic & International Studies, Russia and European Energy Security: Divide and
Dominate (Washington, D.C: CSIS, 2008), P1-2.
Peter Oppenheimer and Sergiy Maslichenko, Energy and the Economy: An Introduction, in
Russia's Oil and Natural Gas: Bonanza or Curse, ed. M. Ellman (New York: Anthem Press,
2006), P17-18.
European Commission, Trade, Countries and regions: Russia, europa.eu, 09 September, 2014,
http://ec.europa.eu/trade/policy/countries-and-regions/countries/russia/
Marc Jones and Lidia Kelly, Russia has reserves to ride out sanctions – assuming no panic,
Reuters, 1 August, 2014, http://www.reuters.com/article/2014/08/01/russia-reservesidUSL6N0Q70OV20140801
35
Figure 1 - Russian Oil Production and Brent Crude Prices 1992-2013108
The Kremlin recognizes the need for economic diversification and the strengthening of its
oil and natural gas infrastructure in order to maintain economic stability. However, recent
discoveries of massive shale oil deposits in western Siberia, called the Bazhenov Shale,
containing perhaps 75 billion barrels of recoverable oil,109 make any plans of Russian
economic diversification even more remote.
Despite the Kremlin taking active steps to
mitigate such economic and infrastructure vulnerability through various structural reforms
and its abolition of turnover taxes and the closing of tax loopholes110, the Russian economy is
expected to remain highly dependent on raw resource exports in the long-term111.
The Russian authorities have made some efforts to mitigate their vulnerability due to
price-fluctuations within the natural gas sector through – among other things - their proposals
concerning the creation of a “GAS OPEC”. The first meeting of the Gas Exporting Countries
Forum (GECF) in 2010 marked the first step of such an initiative. The Doha Declaration
resulting from this meeting recorded the agreement among the participating gas-producing
countries present that long-term contracts and the continued indexing of gas prices to that of
oil were in the best interests of producers and would contribute greatly to price stability within
the gas sector.112 However, not all gas producing countries are in agreement over whether
108
109
110
111
112
Mark Adomanis, Russia's Oil Industry Is Doing Fine, Which Is Great News For The Kremlin,
Forbes, 1 March, 2014, http://www.forbes.com/sites/markadomanis/2014/01/03/russias-oilindustry-is-doing-ok-which-is-good-news-for-the-kremlin/
John Kemp, The Big One: Russia's Bazhenov shale, Reuters, 16 July, 2014,
http://uk.reuters.com/article/2014/07/16/russia-shale-kemp-idUKL6N0PR1OP20140716
R. Ahrend, Sustaining Growth in a Hydrocarbon-based Economy, in Russia's Oil and Natural
Gas: Bonanza or Curse, ed. M. Ellman (New York: Anthem Press, 2006), P122-123.
R. Ahrend, Sustaining Growth in a Hydrocarbon-based Economy, in Russia's Oil and Natural
Gas: Bonanza or Curse, ed. M. Ellman (New York: Anthem Press, 2006), P124.
Gas Exporting Countries Forum, Doha Declaration: The First Gas Summit of The Heads of
36
the creation of a “GAS OPEAC” is in fact necessary, and many of the world's largest natural
gas consumers, such as the EU, are very concerned about the implications if such an
organisation were to come into existence.113
3.5 Russian Energy Policies Unlike the EU, which is much divided over its energy relationship with Russia (see chapter 5
below),114 Russia's economic and political goals towards Europe suffer from no such
obstacles and are clearly defined. Through its policies, the Kremlin has shown its willingness
and ability in dividing Europe on questions of energy integration. This policy has helped to
firmly establish Russia’s state-owned Gazprom within the European energy market.
Gazprom's operations and dealings are neither transparent nor easily accessible to the EU
making its presence within Europe a source of continuous irritation for the EU.115 The fact
that Gazprom, Russia's largest natural gas company, has been labelled one of the world's
most inefficient energy companies116, operating in non-transparent ways including the use of
dubious shell companies,117 also does very little to foster trust of Russia within Europe118.
And despite Russia’s recent accession to the World Trade Organization (WTO), the
experiences of foreign firms dealing with Russia have continued to fuel concern over the
reliability of contracts and the general rule of law in the economic sector.
In an effort to form some sort of a stable foundation the EU has been pressing for a
common legally binding framework from which to approach its energy relations with Russia in
order to minimize the potential effects that political disputes with Russia might have on the
EU's energy supply and security.119 Furthermore, the EU is seeking to tackle what it sees as
Russia's anti-competitive behaviour in the energy sector as Russia's Gazprom has an
effective monopoly in the Russian natural gas sector giving it a huge advantage in the
European market. Russia's Gazprom is so closely linked to the Kremlin that some analysts
have even questioned whether Gazprom is serving Russia's interests or if it is the other way
around.120
113
114
115
116
117
118
119
120
State and Government Of GECF Member Countries (Qatar: GECF, 2011), P2-4.
Escobar, Pepe, Who profits from a gas OPEC? World Security Network, 07 April, 2011,
http://www.worldsecuritynetwork.com/Energy-Security-Other/Escobar-Pepe/Who-profits-from-agas-OPEC
Dmitry Danilov, Russia and the ESDP: Partnership Strategy versus Strategic Partnership, in
The Changing Politics of European Security: Europe Alone? ed. Stefan Ganzle and Allen G.
Sens, 135-160. (UK: Palgrave Schol, 2007),146.
Edward Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P95, P170.
Edward Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P183.
Edward Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P170.
Edward Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P185.
Directorate-General for External Policies of The Union, EU -Russia Relations and the Shared
Neighbourhood: An Overview (Brussels: European Commission, 2011), P11-12
Pavel K. Baev, The Russian Federation: Striving for multipolarity but missing the consequences,
in Great Powers and Strategic Stability in the 21st Century: Competing Visions of World Order,
37
Following the implementation of the EU's Third Energy Package, intended to push energy
integration forward and tackle questionable business practices, Gazprom reacted by
registering its assets in Switzerland.121 This Third Energy Package that came into effect in
2011 was very important to EU energy market liberalization and integration,122 as it also
involved the so-called unbundling clause. This dictated that the same company could not
operate transport and production of gas or electricity. In response to this, Russia, in an effort
to protect its interests, withdrew from the Energy Charter Treaty in 2009. The Charter, which
came into force in 1998, created a common regulatory framework intended to protect foreign
investments, prevent discriminatory conditions in energy trading, and ensure reliable energy
transit and a formalized dispute resolution procedure between participating states.123
By
withdrawing from the treaty Russia effectively abandoned its obligations as stipulated by the
treaty and removed the legal framework from which the EU could have relied on its relations
with Russia.
Questionable as it may be, the Kremlin's control of key energy industries is an integral
factor in Russia's dominance within the energy sector, and western energy companies
remain eager for any kind of limited access granted to them by the Kremlin to Russia's vast
mineral and hydrocarbon wealth.124 The Kremlin displays a fundamental distrust of private
enterprise in the energy sector and its policies so far show that it does not believe that
privately owned energy companies can best serve Russia’s national interests.125
This
practice by Russia of “resource nationalism”, wherein the state owns key energy companies
and infrastructure that operate exclusively within that nation’s territory is causing great friction
between the EU and Russia. Saturation of the European gas market by Russian natural gas
undermines EU efforts of energy market liberalization within Europe, and Russia's application
of "resource nationalism” grants Russia's Gazprom and Rosneft a dominant position over
European energy companies who do not enjoy the same freedoms or privileges.126
121
122
123
124
125
126
ed. Graeme P. Herd, 117-131. (New York: Routledge, 2010), P119.
Pavel Orlov, Gazprom to register its overseas assets in Switzerland, Voice of Russia, 16
October, 2012,
Center for Strategic & International Studies, Russia and European Energy Security: Divide and
Dominate (Washington, D.C: CSIS, 2008), 7-8.
Sherina Petit and Philip Roche, Russia's withdrawal from the Energy Charter Treaty, Norton
Rose Fullbright, August 2009,
http://www.nortonrosefulbright.com/knowledge/publications/22691/russias-withdrawal-from-theenergy-charter-treaty
Edward, Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P97.
Peter Oppenheimer and Sergiy Maslichenko, Energy and the Economy: An Introduction, in
Russia's Oil and Natural Gas: Bonanza or Curse? ed. Michael E, 15-32 (New York: Anthem
Press, 2006), P27.
Gazprom, Delivery Statistics, Gazprom, date published: unknown,
http://www.gazpromexport.ru/en/statistics/
38
3.6 Russian Ambitions and Energy Strategies Russia's international ambitions see it moving well past that of regional hegemon towards
that of energy superpower.127 In order to accomplish this Russian policy-makers feel there
are two key goals that need to be achieved. First, the establishment of a clear geo-strategic
sphere of influence is felt to be vital to Russia's political security and economic interests.128
In order to maintain such a sphere of influence Russian policy-makers want to keep Georgia,
Moldova, Belarus and Ukraine out of NATO and to minimize what they see as destabilizing
western-backed democracy promoting schemes within those countries.129 In addition to this
it is felt to be of vital importance that key energy sectors within Russia remain under the
Kremlin's control and that foreign participation within the Russian energy sector continues to
be strictly limited and controlled.130
An integral factor in Russia's ambition to create a clearly defined sphere of influence is the
creation of a Eurasian Economic Union. This plan, often spoken of by Russia’s President
Putin,131 involves the transformation of the Eurasian Customs Union (modelled to some
extent on the EEC)132 into a Eurasian Economic Union, one that could possibly act as a
counterbalance to the EU. This union would be modelled very closely after the EU’s own
existing economic infrastructures and would have a combined GDP of almost 3 trillion
dollars. Currently this union consists of Russia, Belarus and Kazakhstan, but there is a
desire in the Kremlin for Kyrgyzstan, Armenia and Ukraine to join as well.133 Russia’s plans
for the further development of this Eurasian Union may also help in part to explain recent
events in Ukraine and Russia’s unusually aggressive stance towards Kiev and the EU.
Without Ukraine many analysts have predicted that the Eurasian Union will lack the
necessary clout to make it an attractive and powerful enough alternative to the EU.134
However, the Eurasian Union is not only about Russia’s influence vs. that of the EU, but also
has a lot to do with the rise of China to the east.135
127
128
129
130
131
132
133
134
135
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P57.
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P25.
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P30.
Eugene B. Rumer, Russian Foreign Policy Beyond Putin (New York: Routledge, 2007), P31,
P63.
Casey Michel, Vladimir Putin's Impotent Eurasian Union, Foreign Policy, 5 June, 2014,
http://www.foreignpolicy.com/articles/2014/06/05/vladimir_putins_impotent_eurasian_union_kaz
akhstan_belarus_ukraine
Casey Michel, Vladimir Putin's Impotent Eurasian Union, Foreign Policy, 5 June, 2014,
http://www.foreignpolicy.com/articles/2014/06/05/vladimir_putins_impotent_eurasian_union_kaz
akhstan_belarus_ukraine
Dmitri Trenin, Eurasian Union: Useful, But Modest, Carnegie Moscow Center, 5 August, 2013,
http://carnegie.ru/eurasiaoutlook/?fa=52578
Casey Michel, Vladimir Putin's Impotent Eurasian Union, Foreign Policy, 5 June, 2014,
http://www.foreignpolicy.com/articles/2014/06/05/vladimir_putins_impotent_eurasian_union_kaz
akhstan_belarus_ukraine
Fiona Hill and Bobo Lo, Putin's Pivot: Why Russia Is Looking East, Foreign Affairs, 31 July,
39
Despite its extensive energy investments within Europe, Russia has also been looking
east for new energy partners, namely to the insatiable Chinese energy market. In 2014
Russia and China signed a 400 billion dollar 30 year natural gas deal with a 77 billion dollar
pipeline from Siberia to China now in the works.136 This pipeline will provide China with 38
billion cubic meters of natural gas per annum bringing the total supplies of Russian natural
gas to China up to 61 billion cubic meters per annum.137 Although this is only a small part of
the total natural gas exported annually to the EU138 the fact remains that just like the EU is
looking for ways to reduce Russian influence so too is Russia looking for ways to mitigate
European economic and political influence on its domestic and foreign affairs.
Although Russia and China may share a strategic and economic partnership, the Kremlin
is just as anxious as numerous other nations are about the meteoric rise of China. This is
especially in regard to Russia's mineral- and resource-rich eastern provinces, which are
seeing continuous population flight while just across the border in Manchuria the Chinese
outnumber the Russians in the Far East by 62 to 1.139 The fact is that whilst the Russians
have been moving west, Chinese migrants and day-labourers have been moving into the
now often abandoned eastern provinces causing some concern within the Kremlin. Russia
knows all too well from events within the post-Soviet space, which it is currently taking
advantage of in Ukraine, how a slow change in demographics can end up resulting in
“invasion by stealth.”140
Given such ethnic anxieties and also general strategic calculations, the role of China in
influencing Russia’s actions within the post-Soviet space is one that cannot be ignored.
Russia’s insistence on its right to a sphere of influence may not only be due to NATO or EU
expansion, but may also have something to do with securing its strategic rear and preserving
its international clout against its giant neighbour to the east. This is why the idea of a large
and economically powerful Eurasian Union is quite compelling to Russia: even though such a
union would not be able to compete economically with either the EU or China, it would still
136
137
138
139
140
2014, http://www.foreignaffairs.com/articles/139617/fiona-hill-and-bobo-lo/putins-pivot
Alexei Anishchuk, As Putin looks east, China and Russia sign $400-billion gas deal. Reuters, 21
May, 2014, http://www.reuters.com/article/2014/05/21/us-china-russia-gasidUSBREA4K07K20140521
Alexei Anishchuk, As Putin looks east, China and Russia sign $400-billion gas deal. Reuters, 21
May, 2014, http://www.reuters.com/article/2014/05/21/us-china-russia-gasidUSBREA4K07K20140521
European Commission, EU Energy in Figures: Statistical Pocketbook 2014. (Brussels:
European Commission, 2014), P24.
David Blair, Why the restless Chinese are warming to Russia's frozen east, The Telegraph. 16
July, 2009, http://www.telegraph.co.uk/comment/5845646/Why-the-restless-Chinese-arewarming-to-Russias-frozen-east.html
David Blair, Why the restless Chinese are warming to Russia's frozen east, The Telegraph. 16
July, 2009, http://www.telegraph.co.uk/comment/5845646/Why-the-restless-Chinese-arewarming-to-Russias-frozen-east.html
40
enable Russia to maintain some of its regional influence vis-à-vis the two surrounding
economic behemoths.141142
Despite Russian efforts to make a greater Eurasian Economic Union seem like it is just
around the corner, the reality is that progress has been very slow and plagued with
difficulties.143
This may help to explain the increasingly aggressive policies of Russia
towards the west because instead of maintaining or consolidating its influence in its
surrounding regions, Russia feels that it has instead been gradually losing control over what
it considers its rightful sphere of influence.144 With their NATO and EU memberships, the
nations of central and Eastern Europe have already become less vulnerable in the economic
and military sectors with regard to any Russian influence. However, the same cannot be
said about the energy sector, wherein 13 EU countries rely on more than half their natural
gas from Russia.145 It is perhaps for this reason that Russia has adopted the policy of the
"energy weapon" as it may be Russia's only means left of maintaining some control over the
post-Communist space and to some extent the EU as well. The EU on the other hand, can
no longer ignore Russia's aggressive foreign policy towards its eastern Member States
without the risk of suffering a serious blow to its integrity and international reputation.
3.7 The Russian "Energy Weapon" and the EU Despite the numerous political disagreements between the EU and Russia over the years,
the two have enjoyed growing interdependence with regard to energy matters ever since the
end of the cold war146. The EU remains Russia's biggest trading partner and is in turn the
EU's 3rd largest trading partner after the U.S and China. Russia depends upon the European
market for its oil and gas exports and for most of its other imports. The EU, therefore, far
from being powerless, should in fact wield considerable economic influence on Russia's
economy. Yet, despite the extensive economic links between Russia and the EU, recent
events in Belarus and Ukraine have made clear that European influence over Russia is in
fact quite limited.
141
142
143
144
145
146
Dmitri Trenin, Eurasian Union: Useful, But Modest, Carnegie Moscow Center, 5 August, 2013,
http://carnegie.ru/eurasiaoutlook/?fa=52578
Georgiy Voloshin, Russia’s Eurasian Union: A Bid for Hegemony? Geopolitical Monitor, 24
September, 2012, http://www.geopoliticalmonitor.com/russias-eurasian-union-a-bid-forhegemony-4730/
Casey Michel, Vladimir Putin's Impotent Eurasian Union, Foreign Policy, 5 June, 2014,
http://www.foreignpolicy.com/articles/2014/06/05/vladimir_putins_impotent_eurasian_union_kaz
akhstan_belarus_ukraine
Laure Delcour, Shaping the Post-Soviet Space: EU Policies and Approaches to Region-Building
(Farnham: Ashgate, 2011), P62.
European Commission, EU Energy in Figures: Statistical Pocketbook 2014. (Brussels:
European Commission, 2014), P24.
European Commission, EU Energy in Figures: Statistical Pocketbook 2014. (Brussels:
European Commission, 2014), P24.
41
When it comes to the supply security of Russian natural gas to Europe, some analysts
view the EU's relationship with Russia as an economic necessity that carries a cost of
negative geopolitical ramifications147. The reason the relationship is seen in a negative light
by many in Europe is partly due to Russian actions that affected energy transit flows
following disputes concerning gas and oil payments from Belarus and Ukraine in 2006, 2007,
2009, and 2010. A mix of political and economic reasons motivated these disputes:148 in all
cases Russia was experiencing difficulties in relations with the two countries’ leaderships,
and in response it unilaterally raised the heavily discounted price of gas and oil supplied to
them. When payment was not forthcoming from Ukraine and Belarus, Russia temporarily cut
off supplies.
In response to this both Belarus and Ukraine simply siphoned off the oil or gas that they
required from the quantities in transit destined for Europe, and as a result the EU suffered
temporary and slight shortages149. Russia's old-world power politics through its use of gas
cut-offs in order to influence its neighbours is something which is greatly criticized by the
EU150. Despite the culpability of both Belarus and Ukraine in the disputes, in which they
effectively held Russia's gas and oil supplies hostage, Russia's willingness to use the
“energy weapon” to further its geopolitical goals has led some analysts to call into question
its reliability as an energy supplier for the EU should political relations between the two
deteriorate. This theory is now being put to the test due to rapidly deteriorating relations
between the EU and Russia as a result of the on-going Ukrainian crisis.
3.8 The Ukraine The Ukraine has long been considered vital to Russia's geo-strategic interests and its ability
to maintain “great-power” status.151
The Russian view regarding western interference in
Russian-Ukraine affairs can be succinctly summed up by the former Russian Foreign
Minister Mamadov's warning to the U.S that: “anything between us (Russia) and Ukraine is a
family matter”.152 Since the collapse of the Soviet Union, there has been a commonly held
147
148
149
150
151
152
Center for Strategic & International Studies, Russia and European Energy Security: Divide and
Dominate (Washington, D.C: CSIS, 2008), 4-6.
Reuters, Factbox: Russia's energy disputes with Ukraine and Belarus, Reuters, 21 December,
2012, http://www.reuters.com/article/2012/12/21/us-russia-gas-disputesidUSBRE8BK11T20121221
Reuters, Factbox: Russia's energy disputes with Ukraine and Belarus, Reuters, 21 December,
2012, http://www.reuters.com/article/2012/12/21/us-russia-gas-disputesidUSBRE8BK11T20121221
Andrew E. Kramer, Russia Cuts Off Gas Deliveries to Ukraine, New York Times, 01 January,
2009, http://www.nytimes.com/2009/01/02/world/europe/02gazprom.html?_r=0
James M. Goldgeier, Power and Purpose: U.S Policy Towards Russia After the Cold War
(Washington D.C: Brookings Institution. 2003), P46.
James M. Goldgeier, Power and Purpose: U.S Policy Towards Russia After the Cold War
(Washington D.C: Brookings Institution. 2003), p166.
42
belief in Russia that Ukrainian independence is merely a temporary situation.153 Russia's
recent annexation of Crimea and the continuing fighting between pro-Russian separatist
forces in eastern Ukraine shows that such thinking is still on-going, not just within the
Kremlin, but also in parts of Ukraine as well.154
The current crisis in the Ukraine stems from a very long and complicated history, but it
was the decision by former Ukrainian President Viktor Yanukovich to dismiss an EU
Association Agreement in favour of a Russian deal155 in 2013 that set the current crisis into
motion. The subsequent riots and eventual coup in Ukraine, supported politically by both the
EU and the U.S., and Russia's annexation of Crimea in response have led to downward
spiral in EU relations with Russia the likes of which have not been seen since the Cold
War.156 The situation has deteriorated into an international standoff in which Russia, the U.S.
and the EU cast blame on each other and all parties are refusing to back down.
Russia's annexation of Crimea and support for separatist forces in eastern Ukraine has
drawn intense political recriminations from the EU and the international community with the
EU and U.S employing targeted economic sanctions against Russia in response.157 So far
the U.S and the EU have decided to enact various economic sanctions, travel bans and
asset freezes against 119 key individuals as well as 23 “entities” within Russia's banking, oil
and defence sectors.158159 Russian state oil firms Rosneft, Transnefnt and Gazprom Neft
(Gazproms oil division) are all suffering from asset freezes and an inability to gain foreign
loans coupled with losing access to deep-water oil technology.160 These sanctions have had
severely negative effects on the Russian rouble and they have even resulted in the large
Russian oil firm Rosneft being forced to ask the Kremlin for a 42 billion dollar loan, as it could
not raise enough funds due to current sanctions.161 Conversely, the Ukrainian crisis has in
153
154
155
156
157
158
159
160
161
Taras Kuzio, Ukrainian Security Policy (Westport:Prager, 1995), P17.
Taras Kuzio, Ukrainian Security Policy (Westport:Prager, 1995),P31, P38.
AlJazeera, Timeline: Ukraine's political crisis. Al Jazeera, 30 July, 2014,
http://www.aljazeera.com/news/europe/2014/03/timeline-ukraine-political-crisis201431143722854652.html
AlJazeera, Timeline: Ukraine's political crisis. Al Jazeera, 30 July, 2014,
http://www.aljazeera.com/news/europe/2014/03/timeline-ukraine-political-crisis201431143722854652.html
BBC, Ukraine crisis: Russian officials targeted by sanctions, BBC News. 21 July, 2014,
http://www.bbc.com/news/world-europe-26672800
BBC, Ukraine crisis: New EU sanctions on Russia go into effect, BBC, 12 September, 2014,
http://www.bbc.com/news/world-europe-29154488
European Union Newsroom, EU sanctions against Russia over Ukraine crisis, Europa.eu. 15
September, 2014, http://europa.eu/newsroom/highlights/specialcoverage/eu_sanctions/index_en.htm#5
BBC, Ukraine crisis: Russia and sanctions, BBC, 12 September, 2014,
http://www.bbc.com/news/world-europe-26672800
BBC, Rosneft requests $42bn loan from Russian government, BBC, 15 August, 2014,
http://www.bbc.com/news/business-28801185
43
fact increased Russian President Vladimir Putin's popularity within Russia,162 whereas, the
EU remains heavily divided on the issue.163
Map 3 - Ukraine's Ethnic Zones164
A further cause of concern for the EU regarding its sanctions is that Russia has
responded to them in kind, by blocking certain food imports from all the EU Member States,
the U.S, Canada, Australia and Norway for at least one year.165
Although this will
undoubtedly have very negative effects on Russian businesses and consumers the same is
true for the EU as Russia is the EU’s largest consumer of vegetables and fruits and is a huge
global importer of meat and dairy products. It is projected that Russia’s countermeasure may
end up costing the EU up to 9 billion dollars166 and food producers in Finland, Spain, France,
Greece and Poland are already demanding compensation from the EU.167 Other analysts
162
163
164
165
166
167
Joanna Humphreys, Russia sanctions: Who will be hurt the most? BBC, 30 July, 2014,
http://www.bbc.com/news/business-28539928
Indira A.R. Lakshmanan and Ewa Krukowska, Russian Gas Reliance in Europe Skewing
Sanctions Debate, Bloomberg, 27 May, 2014, http://www.bloomberg.com/news/2014-05-26/aeurope-hooked-on-russian-gas-debates-imposing-sanctions.html
Richard Hartley-Parkinson, Ukraine Q&A: A brief guide to the conflict and how events might
unfold, Mirror, 3 March, 2014, http://www.mirror.co.uk/news/world-news/guide-ukraine-howevents-between-3203295
Polina Devitt and Sergei Karpukhin, Moscow bans Western food imports; Russian quits as
Ukraine rebel chief, Reuters, 7 August, 2014, http://www.reuters.com/article/2014/08/07/usukraine-crisis-idUSKBN0G717B20140807
Polina Devitt and Sergei Karpukhin, Moscow bans Western food imports; Russian quits as
Ukraine rebel chief, Reuters, 7 August, 2014, http://www.reuters.com/article/2014/08/07/usukraine-crisis-idUSKBN0G717B20140807
Euractiv, Russia's sanctions threaten both EU farmers and policymakers, Euractiv, 19 August,
2014, http://www.euractiv.com/sections/agriculture-food/russias-sanctions-threaten-both-eu-
44
have warned that a tit-for-tat sanctions race between the U.S, EU and Russia is the last thing
that the fragile global economy needs right now and will not help de-escalate or solve the
Ukrainian crisis.168
What makes the Ukrainian situation unique and more complex than that of Russia's
involvement in Georgia in 2008169 was not only the informal invasion and annexation of
Crimea by Russia,170 but relates to the significance of Ukraine's role as a vital transit hub for
Russian natural gas to Europe.171 The loyalty of Kiev's leadership holds vital economic and
geostrategic importance both for the EU and for Russia, which is why both sides have taken
such an unusually tough stance on the matter. Russia's insistence on its right to act to
defend its security interests within its “sphere of influence” is in this case not being given any
credence by its western neighbours. The EU views Russian actions in Crimea and Ukraine
as aggressive and unwarranted, whereas Russia sees itself as being completely within its
rights to ensure its key strategic interests around its borders and considers the U.S and EU
sanctions being employed against it as both illegal and aggressive.172
3.8.1 Ethnic Tensions Another question that has arisen due to the Ukrainian crisis, and which has direct
implications for EU military and political security, is that of the large ethnic Russian
populations still living in many of the post-Soviet states. The support by Russia of ethnic
Russian separatist forces using armed violence – to an extent far exceeding previous
Russian involvement in fomenting internal disorder - has raised some very serious concerns
within the Baltic States, in particular Estonia and Latvia. This is due to the large ethnic
Russian minorities living within these two nations. In Latvia there are almost 800,000 ethnic
Russians, 32% of the total population and in Estonia there are 400,000 ethnic Russians
which account for 28% of the total population of the country.173 The Estonian government
has already has some experience with examples of such practices by Russia. In 2007 when
the Estonian authorities made the decision to move a Russian World War Two memorial it
168
169
170
171
172
173
farmers-and-policymakers-307827
Euractiv, Why the EU's sanctions against Russia could backfire, Euractiv, 21 March, 2014,
http://www.euractiv.com/europes-east/sanctions-russia-backfire-news-534279
Fabrizio Tassinari, Why Europe Fears Its Neighbours (Santa Barbara, CA: Praeger, 2009), P7475.
AlJazeera, Timeline: Ukraine's political crisis. Al Jazeera, 30 July, 2014,
http://www.aljazeera.com/news/europe/2014/03/timeline-ukraine-political-crisis201431143722854652.html
Lenard J. Cohen, Security Perspectives in Post-Communist Eastern Europe: "Easternization"
and "Europeanization," in The Changing Politics of European Security: Europe Alone? ed.
Stefan Ganzle and Allen G. Sens, 47-66. (UK: Palgrave Schol, 2007), P63.
Kathrin Hille, Russia attacks EU sanctions and warns of higher energy bills, The Financial
Times, 30 July, 2014, http://www.ft.com/cms/s/0/bc3d26b0-1804-11e4-a6e400144feabdc0.html#axzz3AZSjZYwb
Sven Arnswald and Mathias Jupp, The Implications of Baltic States' EU Membership (Helsinki:
Ulkopoliitinen Instituutti, 2001), P15.
45
sparked mass protests and rioting by thousands of ethnic-Russians whilst the countries
internet was brought to its knees as it was bombarded with denial of service attacks
stemming from Russia.174 It is, therefore, not difficult to understand why the Baltic States are
so concerned. Russia's support of separatist forces within Ukraine is felt to pose a significant
and direct military security threat to these small nation-states, whose governments are
alarmed at the possibility of Russian-backed separatist movements forming within their own
borders.
3.9 Summing Up Despite Russia's increasing relations with China and current tensions surrounding the
Ukrainian crisis, the Kremlin cannot simply ignore the attitudes and actions of the EU as it is
Russia's biggest natural gas customer. This continued reliance coupled with other trade
benefits is the EU's only real bargaining chip with regard to Russia. However, as long as key
EU Member States continue to impede progress in energy market integration and
liberalization within Europe, then such leverage will never be effectively wielded and Russia
will not have to change its practices. The Kremlin knows this just as well as anyone, which is
why it will continue to employ divisive policies within Europe to secure its influence in the
European energy market.
Besides Russia's dominance within the European energy market and its questionable
practice of employing energy cut-offs as a weapon, another factor that greatly affects
European views of Russia and its relations with Russia's current government has been the
undemocratic175 nature of the régime under Russia's former Prime Minister and current
President, Vladimir Putin.
Russia's government has been greatly criticized by European
leaders and policy makers for human rights violations, voter fraud, media censorship and
cronyism within both the political and key industrial sectors of Russia176. Disputes between
Russia and Belarus, Ukraine and other former Soviet nations, and Russia's increasingly
heavy-handed approach, raise some serious questions within the EU and are forcing its
Member States to re-evaluate their natural gas dependency on Russia.177 These energy
disputes further politicize the issue of Russian natural gas, causing friction not only between
many of the EU's eastern and some of its western Member States, but also between those
174
175
176
177
The Economist, A Cyber-Riot, The Economist, 10 May, 2007,
http://www.economist.com/node/9163598
Directorate-General for External Policies of The Union, EU -Russia Relations and the Shared
Neighbourhood: An Overview (Brussels: European Commission, 2011), P7.
Dmitry Danilov, Russia and the ESDP: Partnership Strategy versus Strategic Partnership, in
The Changing Politics of European Security: Europe Alone? ed. Stefan Ganzle and Allen G.
Sens, 135-160. (UK: Palgrave Schol, 2007), P146.
EurActiv, EU plans to reduce Russian energy dependence, EurActiv, 21 March, 2014,
http://www.euractiv.com/energy/eu-leaders-discuss-reducing-ener-news-534344
46
states who take completely opposite views regarding the consequences of such
dependency.178
In the context of Russian-EU energy relations, Russia has shown that it cannot be viewed
or treated in the same manner as any other EU Member State, or even as a routine trade
partner. Russia both refuses to accept the supremacy of EU law within Europe and is able to
bypass EU institutions through its bilateral relations with individual Member States,179
refusing to treat the EU as anything more than a coalition of convenience and possible
economic benefit.180
In its domestic and international relations, we here see Russia
operating (as discussed in chapter 2 above) through a realist perspective181 In response, the
nations of Europe so far seem predominantly to have reacted in kind, thinking first and
foremost of their own energy and economic interests and not those of the Union as a whole.
In fact it could be said that the EU, due to its intergovernmental nature, has a distinctly
schizophrenic attitude towards Russian natural gas: the EU collectively proclaims Russia to
be an unreliable partner using gas and oil to coerce its neighbours,182 whilst at the same time
certain Member States continue to expand their own energy dependency.
Germany's
“change through interweavement” approach and the EU's practices stemming from the
theory of neo-functionalist spill-over do not seem to have had any tangible effects on Russia,
perhaps because for such practices to work the nation involved must be a willing participant.
The Ukrainian crisis is a very telling example of how, when the chips are down, Russia still
shows no readiness to accept any interference by the EU in its domestic or foreign affairs.
178
179
180
181
182
Charles G. Cogan, The Third Option: The Emancipation of European Defense, 1989-2000
(Westport: PRAEGGER. 2001), P135.
Fabrizio Tassinari, Why Europe Fears Its Neighbours (Santa Barbara, CA: Praeger, 2009), P72.
Fabrizio Tassinari, Why Europe Fears Its Neighbours (Santa Barbara, CA: Praeger, 2009), P73.
Pavel K. Baev, The Russian Federation: Striving for multipolarity but missing the consequences,
in Great Powers and Strategic Stability in the 21st Century: Competing Visions of World Order,
ed. Graeme P. Herd, 117-131. (New York: Routledge, 2010), P132.
European Commission. European Energy Security Strategy: Communication (Brussels:
European Commission, 2014), P5.
47
IV. THE EU AND ENERGY
4.1 From oil to natural gas Given that every nation-state’s vital interests can be affected by the energy sector, the
related geopolitical hazards and consequences of any nation's energy policies can often be
considerable. In terms of foreign energy supply, the geopolitical interests of the EU are
determined by the location of and access to those resources; the energy policies of the
governments that have control over key resource areas; the EU's relations with these
governments; and international competition over their procurement.
These geopolitical
interests are then further complicated by the EU's regional security and energy security
concerns relating to domestic production, energy infrastructure and relevant legislation and
policies that do not always align with those of its individual Member States.
In the case of the EU, the concept of energy security has an added layer of complexity
compared to that of other large international actors, due to the intergovernmental nature of
the union. The EU does not have a cohesive, truly ‘common’ energy policy as it does for
trade, agriculture and fisheries, and every one of its 28 Member States has varying energy
concerns.
The lack of cohesion within the European energy sector and the resulting
vulnerability this entails has not gone unnoticed and this has led the EU to attempt
development of a common energy framework for its 28 Member States.
A cohesive
framework, however, has as of yet not materialized as all Member States differ to some
degree in their energy needs, their production capacity, methods of energy production, and
their economic and technological capacities as well as their specific dependency on foreign
sources of energy.183
Instead there has been varying progress through smaller initiatives in keeping with the
doctrine of neo-functionalism and the so-called spill-over effect. However, some progress
regarding overall policy development for the EU as a whole has been made in the past
decade, aiming to move step by step towards the formation of a common energy framework.
This progress can be seen in the International Energy Agency's (IEA) review of the EU's
energy policies from 2008, which examines supply and demand, security of supply, common
legislative frameworks and energy markets, emergency preparedness, environmental factors
and energy research and development.184
183
184
Mehmet Efe Biresselioglu, European Energy Security: Turkey's Future Role and Impact (New
York: Palgrave Macmillan), P32.
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
IEA, 2008), P9-12.
48
4.2 Demand for natural gas in EU According to the IEA Energy Policies Review for the EU from 2008 (IEAPR), primary energy
consumption within the EU27 increased by 10% between 1990 and 2004.185 This increase in
demand coincided with a decrease in domestic energy production, thereby further increasing
the need for foreign energy. Energy demand within the EU is projected to increase by 11%
between 2005 and 2030.186 At the same time domestic energy production in key energy
sectors such as coal, oil, natural gas and nuclear power are all projected to decrease
significantly between 2005 and 2030.187 Without a significant increase in domestic energy
production to match the demand, it is projected that the EU's reliance on foreign oil will have
reached 95% by 2030 along with foreign natural gas, which will have increased to 84%.188
Furthermore, net energy imports by the EU are projected to increase by 41% between 2005
and 2030.189
185
186
187
188
189
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
IEA, 2008), P22.
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
IEA, 2008), P 23.
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
IEA, 2008), P60.
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
IEA, 2008), P19.
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
IEA, 2008), P60.
49
Figure 2 - EU28 Natural Gas Import Dependency Figures 1995-2012190
Such an extensive and increasing reliance upon foreign sources of energy will mean that in
order to minimize security of supply risks, and to reduce the resulting political leverage its
suppliers will have over European customers, the EU will have to take decisive measures to
further diversify its foreign sources of oil and gas whilst increasing its domestic production
capacities. When it comes to natural gas the EU is substantially dependent on Russia. This
dependence in and of itself constitutes a considerable risk to certain EU Member State
energy security given the often volatile relations between Russia and some of the EU's
eastern members, and the inherent security issues that result from Russia's willingness to cut
gas and oil supplies to countries as a result of political or economic disputes.
Despite
measures undertaken by the EU for more energy efficiency and use of renewable energy,
some analysts believe that these measures will, at best, only slightly slow down the increase
in foreign energy dependency.191 192
190
191
European Commission, EU Energy in Figures: Statistical Pocketbook 2014 (Brussels: European
Commission, 2014), P72.
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
IEA, 2008), P60-61.
50
Natural gas imports to the EU doubled between 1995 and 2011 and are expected to
continue to rise by almost 2% per annum.193 In 2012 over 65.8% of the EU's natural gas
supplies were imported from outside the EU.194 The increase in natural gas use within
Europe is the result of a number of different factors. Despite its much higher pricing in
Europe than in the U.S,195 natural gas is still a relatively cheap source of energy196 and it is
also a more environmentally friendly fuel than either oil or coal.197 Whilst having a large and
willing supplier of natural gas admittedly eases certain temporary energy concerns within the
EU, it has also meant increasing dependence on, and isolated bilateral interaction with
Russia in the energy sector by a significant number of EU Member States.
Figure 3 - EU28 Natural Gas Imports 1990-2012198
Another problem facing the EU in the energy sector is the aforementioned “divide and
rule” energy strategy being employed by Russia,199 which allows some EU Member States to
enjoy natural gas discounts and others not.200 This makes integration efforts even harder as
192
193
194
195
196
197
198
199
200
European Commission, EU Energy in Figures: Statistical Pocketbook 2014 (Brussels: European
Commission, 2014), P72.
International Energy Agency, Natural Gas Information 2012 (Paris: IEA, 2012), P36.
European Commission, EU Energy in Figures: Statistical Pocketbook 2014. (Brussels:
European Commission, 2014) P24.
European Commission, On the exploration and production of hydrocarbons (such as shale gas)
using high volume hydraulic fracturing in the EU (Brussels: European Commission, 2014), P2.
Neil Hume, Natural gas price in Europe at lowest since 2010, Financial Times, 3 April, 2014,
http://www.ft.com/intl/cms/s/0/a8d41136-bb4a-11e3-8d4a00144feabdc0.html#axzz3DKRFuXBd
Energy Information Administration, Frequently Asked Questions, EIA. date published: unknown,
http://www.eia.gov/tools/faqs/faq.cfm?id=74&t=11
European Commission, EU Energy in Figures: Statistical Pocketbook 2014 (Brussels: European
Commission, 2014), P63.
Edward, Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P137, P163, P166.
J.C, Paying the Price: Donald Tusk's Energy Union, The Economist, 29 April, 2014,
51
individual states continue to compete for Russia’s favour.
However, despite a growing
awareness of and debate regarding the geopolitical complications flowing from European
dependency on Russian natural gas, this does not change the economic reality whereby
demand in Europe for this energy source will continue to rise.
In 2008 the EU relied on only three countries - Norway, Algeria and Russia - for 84% of all
its imported natural gas supplies, of which Russia supplied 42%.201
By 2013 Russia's
percentage of natural gas had receded by 3% of the total imports202, but this figure does not
take into consideration the increase in total consumption of natural gas in Europe, as the
actual quantity of natural gas imported from Russia rose from 154.3 billion cubic meters per
annum in 2005 to 161.5 billion cubic meters per annum in 2013.203 Given the environmental
basis for the EU's 2050 Energy Roadmap,204 and the reduced emissions of natural gas
compared to coal,205 it is almost certain that natural gas imports to Europe will continue to
grow.
Without a significant change in political cohesion within the EU regarding energy
security, and despite diversification of energy sources, reducing the EU's reliance on Russia
for natural gas seems an impossible short-term goal and, furthermore, an unlikely long-term
goal.
Currently the EU's demand for natural gas greatly outweighs its capacity for domestic
production.
Between 1971 and 2011 the domestic production of natural gas in OECD
Europe only increased from 115,924 to 274,619 million cubic meters per annum.206
However, consumption of natural gas in OECD Europe between 1971 and 2011 more than
quadrupled and went from 121,362 to 511,417 million cubic meters per annum.207 Between
1971 and 2011 OECD Europe increased its imports of natural gas from 23,828 to 454,433
million cubic meters per annum.208 Taking into account the end of the cold war and the
enlargements of the EU to the east in 2004 and 2007, it becomes clear that domestic gas
production in Europe is in no way sufficient. The only EU Member States with substantial
domestic capacity for natural gas production are the UK and the Netherlands, yet neither
comes close to producing what is needed for the whole of the EU; and if figures from 1995
201
202
203
204
205
206
207
208
http://www.economist.com/blogs/easternapproaches/2014/04/donald-tusks-energy-union
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
IEA, 2008), P 62.
European Parliament, The EU's energy dependence: facts and figures, europa.eu, 24 July,
2014, http://www.europarl.europa.eu/news/en/newsroom/content/20140718STO53032/html/The-EU%27s-energy-dependence-facts-and-figures
Gazprom, Delivery Statistics, Gazprom, date published: unknown,
http://www.gazpromexport.ru/en/statistics/
European Commission. Energy Roadmap 2050 (Brussels: European Commission, 2011), P2.
Energy Information Administration, Frequently Asked Questions, EIA. date published: unknown,
http://www.eia.gov/tools/faqs/faq.cfm?id=74&t=11
International Energy Agency, Natural Gas Information 2012 (Paris: IEA, 2012), P42.
International Energy Agency, Natural Gas Information 2012 (Paris: IEA, 2012), P46.
International Energy Agency, Natural Gas Information 2012 (Paris: IEA, 2012),. P54.
52
are compared with those of 2012, one can see that their production of natural gas has in fact
decreased209. Even with the added resources of the EEA Member State Norway, should a
situation arise in which the EU lost access to Russian natural gas, there would be a
substantial 32% gap in supplies to make up for.210 Recent discoveries of shale-gas reserves
within Europe and their exploitation211 have the potential to give the EU added leverage in
the natural gas sector; but whether EU Member States will opt to make use of this resource
remains to be seen.
4.3 Shale Gas With the discovery of large amounts of shale-gas in Europe a new alternative domestic
source of natural gas for the EU has many analysts wondering what effects this will have on
European energy dependence. High Volume Hydraulic Fracturing (fracking) is a means of
extracting of natural gas from bedrock by injecting chemically treated water at high pressure
into gas wells often combined with directional drilling.212 This technique is already mired in
controversy in Europe due to claims by environmental groups about the grave environmental
damage that has been caused through the use of this technique in the U.S.213 There are
thought to be around 16 trillion cubic meters of technically recoverable shale-gas in
Europe214, but the exact amount and location of these reserves remain speculative for the
moment. Should these estimates prove true it would mean a complete reversal in European
energy autonomy with regard to natural gas, with some estimating that Europe could have 30
years’ worth of natural gas were it to rely solely on domestic shale-gas sources.215
The extraction techniques used in fracking and the possible harmful effects that these
may have on the environment, in particular the claims of possible groundwater
contamination, have led numerous EU Member States to set temporary limits to shale-gas
exploration or in some cases to ban fracking altogether.216 Despite the possible positive
209
210
211
212
213
214
215
216
European Commission, EU Energy in Figures: Statistical Pocketbook 2014. (Brussels:
European Commission, 2014), P108, P117.
European Commission, EU Energy in Figures: Statistical Pocketbook 2014. (Brussels:
European Commission, 2014), P26.
European Commission, On the exploration and production of hydrocarbons (such as shale gas)
using high volume hydraulic fracturing in the EU (Brussels: European Commission, 2014), P4-5.
Shale Gas Europe, Shale Gas Explained, Shalegas-europe.eu, date published: unknown,
http://shalegas-europe.eu/shale-gas-explained/the-process-of-shale-gas-development/
European Commission, On the exploration and production of hydrocarbons (such as shale gas)
using high volume hydraulic fracturing in the EU (Brussels: European Commission, 2014), P5-7.
European Commission, On the exploration and production of hydrocarbons (such as shale gas)
using high volume hydraulic fracturing in the EU (Brussels: European Commission, 2014), P4.
Ladka Bauerova and Radoslav Tomek, Europe Has 28-Year Shale Gas Rebuff to Russia: Chart
of the Day, Bloomberg, 19 May, 2014, http://www.bloomberg.com/news/2014-05-19/europehas-28-year-shale-gas-rebuff-to-russia-chart-of-the-day.html
Katarzyna Klimasinska, European Fracking Bans Open Market for U.S. Gas Exports,
Bloomberg, 23 May, 2012, http://www.bloomberg.com/news/2012-05-23/european-frackingbans-open-market-for-u-s-gas-exports-1-.html
53
economic and political implications for the EU through the availability of new domestic gas
sources, the environmental concerns have caused enough friction, both within and between
the EU Member States, to stall shale-gas exploration in Europe.217 An added complication is
that the shale-gas reserves often overlap European national borders and, therefore, any
possible negative environmental impact will not solely be limited to the country doing the
fracking. As a result this presents the European Union and those members who desire to
exploit their shale-gas reserves with numerous political, environmental and legal
difficulties.218
Besides possibilities for its own domestic energy production, shale gas is also affecting
EU energy security in another significant way. Changing energy requirements of the U.S in
relation to its increased domestic capacity for hydrocarbon production through shale drilling
may have considerably negative consequences for the EU in the near-future. This newfound domestic source of hydrocarbons has resulted in the U.S slowly de-coupling from the
turbulent Middle East as it is able to use these new methods for both natural gas and oil
extraction greatly increasing its domestic hydrocarbon production and thereby reducing its
dependence on foreign suppliers. The Middle East is host to a number of important sources
of oil and so far the EU has been quite willing to allow the considerable U.S military presence
there to ensure relatively stable supplies of oil for much of Europe. However, now that U.S
policies towards the Middle East are changing the EU is left with a very serious problem.
Much like the case is for its natural gas sector, the EU has no “grand energy strategy” for
ensuring stable relations with and energy supplies from the Middle East. Considering that
EU dependence on foreign oil is predicted to reach almost 90% in the near future this
represents quite a serious threat to EU’s oil-energy security.219
Considering the unstable civil and military situations within Iraq, Afghanistan, Libya and
Syria and that the energy and military sectors are to some extent the least “integrated” within
the EU, it is both highly unlikely that the EU will be able to compensate for even a partial
departure of the U.S from the region.
Although a number of NATO members have
participated in operations with the U.S over the years in Iraq and Afghanistan,220 the EU and
its Member States are in no way able to supply the level of financial or military support
217
218
219
220
EurActiv, Europe abandons hopes of US-style shale gas revolution, EurActiv, 28 February,
2014, http://www.euractiv.com/specialreport-industrial-renaiss/Europe-abandons-shale-gasrevolution-news-533546
European Commission, On the exploration and production of hydrocarbons (such as shale gas)
using high volume hydraulic fracturing in the EU (Brussels: European Commission, 2014), P810.
Susanne Peters, The “Tight-Oil Revolution” and its Consequences for the European Union: A
“Wake-up Call” for its Neglected Energy Security, S+F 3, no. 32 (March 2014): 170-174.
Jenny Cosgrave, Oil supply risks for 2015 'extraordinarily high', CNBC. 11 July, 2014,
http://www.cnbc.com/id/101828921#.
54
needed to stabilize the region.
Even if the EU’s difficulties with Russia were somehow
smoothed over, Russia’s production capacity and growing Asian customer base coupled with
declining productivity in Norway means that without oil from the Middle East, there would not
be enough oil to sustain the EU. The vast reserves left in the Middle East all point to the fact
that the EU will remain dependent on Middle Eastern oil for many years to come.221
In this aspect the EU faces a very similar challenge within the oil sector as it does with the
natural gas. So far the “strategy” being employed by the EU has been focus on marketoriented approach, wherein it has set its faith in strategic partnerships coupled with clear
market infrastructures to ensure reliability of supply and stable prices. However, the ability of
the EU to ensure cooperation and compliance with these market rules could possibly face
the same difficulties with its Middle Eastern suppliers of oil as it has with Russia in relation to
the natural gas sector, however further examination of this particular aspect of the EU’s
energy security would be outside of the scope of this thesis.
4.4 Energy Infrastructure Blueprint 2020 If the EU is to meet any of its set goals with regard to carbon emissions, its options remain in
the increased use of nuclear energy, renewable sources and natural gas and through its
reduction in the use of coal, oil and other solid fuels. Despite the eco-friendly policies of the
EU and many of its Member States, the energy figures show222 that a carbon-free economy
as foreseen in the EU's 2050 roadmap is more wishful than ambitious. Considering the
current technological limits of renewable energy sources, their costs and unreliability and the
widespread anti-nuclear, anti-coal and anti-oil sentiments to be found in some European
nations, it is clear that natural gas will most likely become increasingly important in the
European energy spectrum. In particular, should Europe choose not to employ fracking in
order to utilize its own domestic natural gas resources, it is clear that it will not only remain
dependent on foreign, namely Russian, natural gas but that this dependence will grow
exponentially in the near future.
221
222
Susanne Peters, The “Tight-Oil Revolution” and its Consequences for the European Union: A
“Wake-up Call” for its Neglected Energy Security, S+F 3, no. 32 (March 2014): 170-174.
The General Secretariat of the European Council. 4 FEBRUARY 2011 CONCLUSIONS
(Brussels: European Commission, 2011), P4-5.
55
Figure 4 - EU 2020 Renewable Energy Targets 2012-2020223
According to the EU's Energy Infrastructure Blueprint for 2020 it plans to reduce its
greenhouse gas emissions by 20%, increase its use of renewable energy by 20% and
increase energy efficiency by 20%. Often called the 20-20-20 goals, these are to be
completed by the year 2020.224225 In order to accomplish these goals the EU has proposed
an overhaul of the existing Trans-European Networks for Energy (TEN-E) policy226 in
accordance with the new responsibilities of the EU provided by article 194 of the Treaty of
Lisbon which states that the Union shall ensure the functioning of the energy market, the
security of energy supply, promote energy efficiency and saving and promote the
interconnection of the energy networks.227
223
224
225
226
227
Furthermore, it proposes the creation of a
European Commission, EU Energy in Figures: Statistical Pocketbook 2014 (Brussels: European
Commission, 2014), P27.
European Renewable Energy Council, Renewable Energy Technology Roadmap 20% by 2020
(Brussels: EREC, 2008), P2
Directorate General for Energy, Energy infrastructure priorities for 2020 and beyond - A
Blueprint for an integrated European energy network’ 2020 (Luxembourg: Publications Office of
the European Union, 2011), P7.
Directorate General for Energy, Energy infrastructure priorities for 2020 and beyond - A
Blueprint for an integrated European energy network’ 2020 (Luxembourg: Publications Office of
the European Union, 2011), P8.
Lisbon-Treaty, The Lisbon Treaty, Lisbon-Treaty.org, date published: unknown,
http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-the-functioning-of-the-europeanunion-and-comments/part-3-union-policies-and-internal-actions/title-xxi-energy/485-article194.html
56
“Connecting Europe Facility” in “A budget for Europe 2020”. This would facilitate an overhaul
in the energy sector which is a requirement for achieving the aforementioned energy policy
objectives of article 194 of the Lisbon Treaty.
Further, there are plans to fully integrate the EU's internal energy market, a vital factor if
the 20-20-20 objectives are to be met on schedule. With regard to natural gas, the blueprint
calls for diversification of gas imports to include more imports of liquefied natural gas and
compressed natural gas from diverse suppliers.228 Furthermore, it calls for improved storage
facilities and bi-directional pipelines within and between EU Member States.229 However, it
does reiterate the key-role of natural gas in Europe, especially its future role as a “back-up
fuel” for variable electricity generation230.
4.5 EU Energy Roadmap to 2050 The EU's Energy Roadmap for 2050 is much more ambitious than its 2020 blueprint, both in
terms of its environmental objectives, and of meeting the EU's increasing energy needs while
paying attention to energy security concerns. The 2050 Roadmap foresees a 90% decrease
in greenhouse gas emission levels below those of 1990 as well as a 40% reduction in total
emissions by 2050.231 The plan is for the EU to become a low-carbon economy by 2050
whilst still remaining competitive.232
In order to accomplish these goals the roadmap
proposes that the entire energy structure of the EU must be changed in order to maximize
energy efficiency. This will be done through the building of better energy grids, connecting
the remaining European “energy islands”233 to the broader European energy grid, and
increasing the use of electricity and renewable energy sources as well as that of nuclear
energy to aid in the transition to a low-carbon economy.234
Another critical energy source envisaged for this transition to non-carbon energy sources
is that of natural gas. In terms of reducing carbon emissions from coal-fired power plants the
report foresees their replacement by natural gas powered electric power plants. The report
also mentions the need for the EU to diversify its natural gas sources and mentions the
possible use of unconventional sources such as shale gas in conjunction with liquefied
228
229
230
231
232
233
234
Directorate General for Energy, Energy infrastructure priorities for 2020 and beyond - A
Blueprint for an integrated European energy network’ 2020 (Luxembourg: Publications Office of
the European Union, 2011), P9, P14.
Directorate General for Energy, Energy infrastructure priorities for 2020 and beyond - A
Blueprint for an integrated European energy network’ 2020 (Luxembourg: Publications Office of
the European Union, 2011),
Directorate General for Energy, Energy infrastructure priorities for 2020 and beyond - A
Blueprint for an integrated European energy network’ 2020 (Luxembourg: Publications Office of
the European Union, 2011), P9.
European Commission. Energy Roadmap 2050 (Brussels: European Commission, 2011), P2.
European Commission. Energy Roadmap 2050 (Brussels: European Commission, 2011), P3.
European Commission. Energy Roadmap 2050 (Brussels: European Commission, 2011), P15.
European Commission. Energy Roadmap 2050 (Brussels: European Commission, 2011), P913.
57
natural gas (LNG) as potential alternatives.235 However, the report stresses the need for
improved carbon capture and storage techniques if natural gas is to be used as a transition
fuel if the EU is to meet its set decarbonisation targets.236 The report underlines the need for
mutual support by EU Member States in the energy sector, and urges that national decisions
in relation to energy matters should be mutually supportive in order to avoid negative spillover effects. The report also states the need for the removal of barriers to gas or electricity
market integration between EU Member States.237
4.6 Climate Change Perhaps the most important factors shaping the EU's future energy development are,
however, not those of traditional energy policy alone, but measures taken by the Union in the
context of climate change policy. As many would see it, the carbon emission goals and other
more or less radical objectives set under climate policy have created a legislative
“straitjacket” severely constraining the solutions that EU states might otherwise be able to
seek for their energy needs. Despite the rather vague beneficial effects that these policies
may have for the environment, the economic consequences of such policies are much more
palpable and just as serious for the economies of the EU's Member States, especially in the
aftermath of the economic crash. One of the key attractive factors of the EU to potential and
current members has been the view that the EU provides greater potential for economic
growth and stability.238 However, even this has been called into question with some analysts
claiming that, despite integration in various sectors, the economic performance of the EU has
shown no overall improvement since the 1980's, leaving the Union’s total GDP at
approximately 70% of that of the U.S.239 Further, following the financial collapse of 2008, faith
in the relative stability of the EU and its common currency has been considerably reduced.
Such a fragile economic climate does not bode well for any climate-related policies that may
well help the environment, but could further degrade the EU's economic recovery and
competitive advantage.
The need for a trans-European energy infrastructure, if the EU is to achieve any of its
energy roadmap goals, is made quite clear in the 2050 Energy Roadmap and in the EU's
Energy Infrastructure Blueprint for 2020. Without such integration some EU Member States
foresee heightened energy costs, unreliability in energy supply and consequently the inability
to meet their environmental targets. However, these policies are not only driven by the need
235
236
237
238
239
European Commission. Energy Roadmap 2050 (Brussels: European Commission, 2011), P12.
European Commission. Energy Roadmap 2050 (Brussels: European Commission, 2011), P12.
European Commission. Energy Roadmap 2050 (Brussels: European Commission, 2011), P14.
Stanley Henig, The Uniting of Europe: From Discord to Concord (Routledge: New York, 1997),
P97.
Majone Giandomenico, Is the Community Method Still Viable? in The Community Method:
Obstinate or Obsolete? ed. Renaud De H, 16-42 (New York: Palgrave Macmillan, 2011), P21.
58
for cost reduction and stability within the energy sector. There is powerful political and civil
society support for environmentally friendly energy sources due to concerns about climate
change. Although much remains to be studied within the field of climate science, especially
relating to the anthropomorphic effects on the climate and despite many of the worst
predictions by climate scientists not having (yet) occurred,240 the general consensus within
the EU is that something must be done.
Figure 5 - Global mid-tropospheric 5 year averages in degrees Celsius241
The effects of climate change, whether man-made or naturally occurring, are now
affecting the nations of Europe in different ways and the issue has become highly politicized.
The nature and scale of risks posed by climate change vary between the EU Member States,
affecting some more negatively than others. This poses a problem for the EU as its Member
States differ in geography, resources, populations, and pre-existing energy infrastructures.
This means that the policies and methods devised within the EU to potentially minimize the
dangers of global warming are often at odds with some of its Member States’ national
interests242 as well as with the reality of the EU's future energy needs, its current sources of
energy, and the economic necessity of having a globally competitive European energy
market. It makes little sense for a country that is not affected to agree to measures that may
negatively affect its industry and economy.
240
241
242
Glenn Scherer, IPCC Predictions: Then versus now, Dailyclimate.org, 06 December, 2012,
http://www.dailyclimate.org/tdc-newsroom/2012/12/ipcc-prediction-fact-check
John Christy and Richard McNider, Why Kerry Is Flat Wrong on Climate Change, Wall Street
Journal, 19 February, 2014,
http://online.wsj.com/news/articles/SB10001424052702303945704579391611041331266
Alexander Neubacher, Solar Subsidy Sinkhole: Re-Evaluating Germany's Blind Faith in the Sun,
Spiegel Online, 18 January, 2012, http://www.spiegel.de/international/germany/solar-subsidysinkhole-re-evaluating-germany-s-blind-faith-in-the-sun-a-809439.html
59
The political influence of environmental lobby groups and “green” political parties can be
seen quite clearly from the energy policies and policy objectives of the EU which revolve
primarily around carbon emission targets and renewable energy promotion. Paradoxically,
pressure from environmental groups has directly impeded the EU's green energy initiatives, a
prime example being the domestic pressure within Germany from environmental groups and
political parties to shut down its nuclear reactors.243 Having no clean or renewable energy
sources to make up for the German government’s decision to shut down 8 nuclear power
plants following the Fukushima nuclear disaster in Japan in 2011, and with the planned shutdown of the remaining nuclear power plants by 2022, Germany is instead planning to make
full use of its vast coal resources through its planned opening of 25 new coal-fired power
plants.244 The emissions of just one such coal-fired power plant are considerably higher than
that of numerous nuclear power plants, and should Germany go forward with this plan, it
would mean that the EU's most populous and influential Member State will not be able to
meet its 2020 carbon emission goals.
Of the EU's total energy consumption in 2011 only about 14% was provided through
renewable energy, the rest coming from carbon fuels or nuclear energy.245 This means that
since 1995 there has only been a 9% increase in renewable energy sources, despite
immense subsidization and regulations made in their favour.246
Despite such subsidies,
increasingly unpredictable weather due to climate change means that solar and wind energy
are lacking in both reliability and cost efficiency. A further hindrance to the use of renewable
energy is the EU's Emission Trading System (EU ETS), launched in 2005, wherein the EU
set a cap on carbon emissions and created a system by which European companies could
buy and sell emission quotas. Devised to limit emissions, this scheme, however, has had the
opposite effect,247 as carbon certificate prices remain too low to discourage industry from
using the more reliable and less environmentally friendly carbon-based fuels.
243
244
245
246
247
Frank Dohmen and Alexander Neubacher, Merkel's Switch to Renewables: Rising Energy
Prices Endanger German Industry, Spiegel Online, 24 February, 2012,
http://www.spiegel.de/international/business/merkel-s-switch-to-renewables-rising-energyprices-endanger-german-industry-a-816669-2.html
James Conca, Germany -- Insane Or Just Plain Stupid? Forbes, 31 August, 2012,
http://www.forbes.com/sites/jamesconca/2012/08/31/germany-insane-or-just-plain-stupid/
Eurostat, Share of renewables in energy consumption up to 14% in 2012, Eurostat, 10 March,
2014, http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/8-10032014-AP/EN/8-10032014-APEN.PDF
Alexander Neubacher, Solar Subsidy Sinkhole: Re-Evaluating Germany's Blind Faith in the Sun,
Spiegel Online, 18 January, 2012, http://www.spiegel.de/international/germany/solar-subsidysinkhole-re-evaluating-germany-s-blind-faith-in-the-sun-a-809439.html
Alexander Jung, Hot Air: The EU's Emissions Trading System Isn't Working, Spiegel Online, 15
February, 2012, http://www.spiegel.de/international/business/hot-air-the-eu-s-emissions-tradingsystem-isn-t-working-a-815225.html
60
4.7 Natural gas supply reliability for EU The increasing influence of Russia on the EU's energy security, and consequently its
geopolitical affairs, has caused many within the EU to question and re-evaluate the trend of
development in the EU's energy infrastructure. As mentioned previously, dependence on a
single supplier for such a sizeable proportion of oil and natural gas is in itself always a
potential security issue,248 even more so when this supplier is considered to be politically
unpredictable249, militarily hostile and has diverging geopolitical interests from that of its
consumer states.250
Within the EU, the energy sector still remains within the realm of the sovereign affairs of
its Member States despite efforts to develop common energy legislation and various new EU
policy positions and legislative measures relating to the energy sector. As things stand now,
each EU nation ensures its own energy requirements through bilateral agreements either
with other EU Member States or other third parties.
Such energy autonomy is heavily
criticised by some Member States, with calls being made for an even greater cohesive
energy policy at EU level, and some going so far as to suggest the need for the creation of
an “energy union”.251 The reasons for this vary, but one key issue that stands out within the
energy sector is Europe's need for and dependence on Russian natural gas and the
geopolitical implications that this has for EU foreign and regional policies.
4.7.1 The EU’s Energy Islands With 6 EU member states dependent upon almost 100% of their natural gas from Russia,252
all of which are located in the Baltic region or the post-soviet sphere, the need for reverseflow capabilities from Western Europe to these nations, should there be any supply
disruptions from Russia, is vital.253 The eastern half of the EU is much more dependent on
Russian natural gas than its western counterparts, with the region as a whole depending on
Russia for approximately 60% of their natural gas supplies254 and some countries relying
upon Russia for 100% of such supplies.255
248
249
250
251
252
253
254
255
Directorate-General for External Policies of The Union, EU -Russia Relations and the Shared
Neighbourhood: An Overview (Brussels: European Commission, 2011), P13-16
Edward, Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P168.
A.E, Weaning Poland off Russian gas, The Economist, 04 April, 2014,
http://www.economist.com/blogs/easternapproaches/2014/04/poland-and-russia
EurActiv, Poland calls for EU energy union, Euractiv. 02 April, 2014,
http://www.euractiv.com/sections/energy/poland-calls-eu-energy-union-301303
European Parliament, The EU's energy dependence: facts and figures, europa.eu, 24 July,
2014, http://www.europarl.europa.eu/news/en/newsroom/content/20140718STO53032/html/The-EU%27s-energy-dependence-facts-and-figures
European Commission, Guidelines for Trans-European Energy Infrastructure (Brussels:
European Commission, 2011), P7, P14, P26.
Gazprom, Delivery Statistics, Gazprom, date published: unknown,
http://www.gazpromexport.ru/en/statistics/
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
61
Figure 6 - EU Russian Natural Gas Dependency 2012256
The European Commission's Energy Security Strategy outlines the importance of reverseflow capacity and the EU's Eastern Member States have called for improvements in this
regard.
A prerequisite for adequate reverse-flow capacity is the building of more gas pipeline
interconnections between particular EU Member States. A European Commission proposal
from 2011 highlights the need for certain priority gas corridors both from outside the EU as
well as between its members. Within the EU, the proposal identifies a need for north-south
natural gas pipeline interconnections in both Western and Eastern Europe, as well as the
need to further integrate the Baltic and Scandinavian energy networks in order to reduce
their isolation in terms of energy sources.257
Natural gas plays another vital role in the
integration of EU energy grids and this is due to its increasing importance as a fuel for the
production of electricity.258
The ability of EU Member States to supply each other with
electricity, either for profit if there is a surplus in production or during emergency situations, is
a vital part of the EU's energy infrastructure plan and its energy security.259
Therefore,
natural gas may play a bigger role, not just in the EU's consumer market, but also in
European industry in the near future.
256
257
258
259
IEA, 2008), P177-178.
Lopez German, This map shows Europe’s dependence on Russian gas, VOX, 25 July, 2014,
http://www.vox.com/2014/7/25/5936521/why-europe-wont-punish-russia-in-one-map
European Commission, Guidelines for Trans-European Energy Infrastructure (Brussels:
European Commission, 2011), P34-35.
Karolin Schaps, Europe's gas-fired power plants attract opportunistic investors, Reuters, 07
August, 2013, http://uk.reuters.com/article/2013/08/07/uk-europe-power-plantsidUKBRE9760V720130807
European Commission. European Energy Security Strategy: Communication (Brussels:
European Commission, 2014), P13-14.
62
The Baltic region in particular represents a unique problem in terms of EU energy security
because Finland, Estonia, Latvia and Lithuania still remain almost completely disconnected
from the existing natural gas pipeline infrastructure of the EU.260 The Baltic Energy Market
Interconnection Plan (BEMIP), created in 2008 to tackle this problem, outlined the necessary
steps required to end Baltic energy isolation, a large part of which consists of the creation of
extra interconnecting natural gas pipelines between the Baltic States along with the creation
of LNG terminals and extra natural gas storage capacity.261
According to the European Commission’s 5th Progress Report on the Baltic Energy Market
Interconnection Plan, work has progressed rapidly,262 especially in the western Baltic area
with pipelines connecting Germany, Denmark, Norway and Poland either underway or near
to completion. However, the report does mention that the much more vulnerable Eastern
Baltic area is still not as far along as its western counterpart.263 Given their small size,
geographical location and historical ties vis-a-vis Russia, the Baltic States are especially
relevant in the context of European energy security and the influence of Russia in that
regard. Weaning them off Russian natural gas or making them less dependent through
diversification would go a long way in reducing the EU's general dependency on Russia and
would also help to de-politicise the issue of natural gas in that area.
4.7.2 Liquefied Natural Gas In 2008 the EU had only 14 LNG terminals with a combined capacity for only 115 billion cubic
meters of LNG per annum. This capacity is not expected to go above 120 billion cubic
meters per annum by 2015. Furthermore, the EU has yet to address the variable natural gas
storage capacity between Member States. In 2008 the EU had a total storage capacity of
14% of annual demand, but this was not an evenly distributed capacity as only some EU
member states have sufficient storage capacities.264 Besides its inadequate infrastructure,
the EU must contend with a number of other issues when it comes to the reliability of natural
gas supplies. One such issue of considerable importance is that the EU is severely lacking in
diversification within the liquefied natural gas (LNG) sector.
Currently the EU currently
receives 45% of its LNG solely from Qatar,265 which means that should the EU dramatically
260
261
262
263
264
265
European Commission, Future Development of the Energy Gas Market in the Baltic Sea Region
(Virum: Ramboll Oil & Gas, 2009), P6-7.
European Commission, Baltic Energy Market Interconnection Plan: 5th Progress Report
(Brussels: European Commission, 2013), P5.
European Commission, Baltic Energy Market Interconnection Plan: 5th Progress Report
(Brussels: European Commission, 2013), P5.
European Commission, Baltic Energy Market Interconnection Plan: 5th Progress Report
(Brussels: European Commission, 2013), P26-30.
International Energy Agency. IEA Energy Policies Review The European Union 2008 (Paris:
IEA, 2008), P67-68.
Eurogas, Statistical Report 2013 (Brussels: Eurogas, 2013), P7.
63
increase its imports of LNG it would then have to find another viable source with a similar
production capacity to that of Qatar.
Map 4 - Liquefied Natural Gas Terminals in Europe 2011266
Some have pointed to the US as this possible new source of LNG for the EU.267 However,
the lack of LNG export infrastructure within the US and lack of pipeline infrastructure
between the EU member states,268 coupled with the fact that there is no certainty that US
LNG exports will find their way to Europe, means that any such partnership is still a long way
off and riddled with logistical hindrances, most prominent of which is the sheer quantity of
natural gas needed by the EU and the much higher price of LNG269 compared to Russian
natural gas. Another factor that must be taken into consideration when discussing increasing
LNG imports to the EU is the rapid increase in demand for LNG in Asia.270 Competing with
the Asian markets for LNG from both the US and the Caspian region could become a very
266
267
268
269
270
Gaz de Normandie, A Strategic Challenge for France, Gaz de Normandie, Date Published:
Unknown, http://gazdenormandie.com/a-strategic-challenge-for-france.html
Coral Davenport and Steven Erlanger, U.S. Hopes Boom in Natural Gas Can Curb Putin, New
York Times, 05 March, 2014, http://www.nytimes.com/2014/03/06/world/europe/us-seeks-toreduce-ukraines-reliance-on-russia-for-natural-gas.html?_r=0
Agnieszka Joanna Stolarczyk, U.S. LNG Exports to Europe: Why it won’t Happen Anytime
Soon? Security Observer, date published: unknown, http://securityobserver.org/u-s-lng-exportsto-europe-why-it-wont-happen-anytime-soon/
Isis Almeida and Anna Shiryaevskaya, U.S. LNG Won’t Replace Russian Gas as Europe Seeks
Supply, Bloomberg. 20 May, 2014, http://www.bloomberg.com/news/2014-05-19/u-s-lng-won-treplace-russian-gas-as-europe-seeks-supply.html
International Energy Agency, Natural Gas Information 2012 (Paris: IEA, 2012), P36.
64
costly and difficult venture for the EU with some very certain and dire economic costs271 in
order to gain uncertain geopolitical benefits vis-à-vis Russia.
4.7.3 Competing with the Asian Market Competition for natural gas with the rising Asian markets is another matter of concern for the
EU. It is estimated that by 2035 China and the U.S will account for 81% of global shale gas
production272 and that by 2026 the Asia-Pacific region will have overtaken Europe as the
largest gas importer in the world.273 China has stepped in as main competitor for Europe in
relation to natural gas imports and has so far completed long-term natural gas deals with
both Turkmenistan274 and Russia.275
The fact that many in Europe look to the Caspian
Region as an alternative to Russia as a source for natural gas276 means that a Chinese
presence within the region - coupled with Russian efforts to foster growing energy relations
with China whilst simultaneously subverting the EU's energy diversification strategy for the
Caspian region - poses a very substantial threat to the EU's energy security in the near
future.
As is mentioned in chapter 3, Russia, like the U.S, has been shifting its focus to the
Chinese energy market.
Russian plans to expand its natural gas and oil pipeline
infrastructure to China have the potential to affect the EU's energy and political security in a
number of ways. Should the European energy markets' share of Russian natural gas and oil
decrease in relation to that of China it could result in a considerable loss of European
economic influence over Russia. Such a development could potentially result in even less
inhibited action by Russia within the post-soviet space. However, as events in Ukraine have
shown, even with the EU's considerable economic leverage, Russia does not seem to be
very fearful of any sanctions or other economic instruments which the EU could try and
employ in response to Russian aggression.
A key factor that may help explain Russia’s aggressive approach may be due to the very
fact that the EU's authority does not extend to the energy sector as it does to other areas. As
such the EU is not able to apply sufficient pressure through the only sector that could most
affect Russia's interests. It is, therefore, incumbent upon the EU and its Member States,
271
272
273
274
275
276
Agnieszka Joanna Stolarczyk, U.S. LNG Exports to Europe: Why it won’t Happen Anytime
Soon? Security Observer, date published: unknown, http://securityobserver.org/u-s-lng-exportsto-europe-why-it-wont-happen-anytime-soon/
British Petroleum, BP Energy Outlook 2035 (London: BP 2014), P55.
British Petroleum, BP Energy Outlook 2035 (London: BP 2014), P57.
Marat Gurt, China secures larger Turkmen gas supplies, Reuters, 03 September, 2013,
http://uk.reuters.com/article/2013/09/03/gas-turkmenistan-china-idUKL6N0GZ31W20130903
Alexei Anishchuk, As Putin looks east, China and Russia sign $400-billion gas deal, Reuters, 21
May, 2014, http://www.reuters.com/article/2014/05/21/us-china-russia-gasidUSBREA4K07K20140521
Mehmet Efe Biresselioglu, European Energy Security: Turkey's Future Role and Impact (New
York: Palgrave Macmillan, 2011), P66-67.
65
should they wish to see a change in Russia's behaviour, to continue working towards further
integration in the energy sector and the creation of an energy union with a single energy
market. If this is not accomplished then the result will be a continuation of the present day
situation in which Russia is able to act with relative impunity whilst the EU remains unable to
respond in any kind of forceful or effective manner.
An alternative possibility to the reduction of European importance to Russia's hydrocarbon
exports is that it could also help to decrease the geopolitical importance of the post-soviet
space to Russian interests. This in turn could mean a reduction in tensions within the postsoviet space rather than an escalation; however, such conjecture does to some extent
contradict Russia's history of extensive involvement within the post-soviet space. The fact
that all projections indicate that the EU will continue to be dependent on Russia for natural
gas into the near-future, coupled with Russia's willingness to use energy as a weapon to
further its geopolitical goals in the region, makes it impossible for the EU to divorce the
energy security interests of many of its Member States from that of Russia. This in turn
negatively impacts upon the military, political and defence interests of certain Member States
and further weakens the integrity of the EU.
4.8 Markets and Liberalisation Over the past few decades the EU has been working progressively towards a more liberal
and integrated energy market within the European region, serving the general aims of the
Single Market as well as the interests of free competition and efficiency. Despite widespread
recognition of the inherent benefits of such a system for customers and for regional energy
security, there is considerable resistance to be found not just from Russia, but also from the
EU's own political sphere and business sectors.
The traditional approach of the private
sector is to reject any ideological or political doctrine that does not serve the two core
interests of profits and efficiency; and the fact is that the politically motivated energy market
liberalization policy being pushed by the EU may diminish the profits or domestic market
control enjoyed by key European energy companies, especially in France, Italy and
Germany. As a result, these measures have so far been vigorously opposed.277
Another problematic aspect of liberalization within the energy sector is that Gazprom
already has a considerable presence on the European market.
Russia, despite its
involvement in the European energy market, is not an EU Member State, and as such it is
not obligated to accept the supremacy of EU law. Russian domestic energy policies ensure
that Gazprom can underbid and accept greater losses than its European counterparts, as
277
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P7-8.
66
Gazprom has direct access to Russia's natural gas resources278 - something that most of its
European counterparts do not have in their respective countries.
Further, the
aforementioned “unbundling” clause contained within the EU's Third Energy Package
concerning electricity and natural gas - intended amongst other things to mitigate Gazprom's
influence by banning any given company from both importing and selling natural gas - may in
fact enable the company to invest more in European energy infrastructure, if strict regulations
are not put in place to prevent this.279
The EU's intergovernmental nature grants powerful companies or unions within its
Member States immense regional influence.
Their ability to lobby their respective
governments which can in turn use the EU's rule of unanimity280 to effectively stall any
unfavourable legislation, has as a result led to repeated watering down of legislation.
Economic interests and realism dominate the European energy sector, and these in turn
provide Russia with the leverage it needs to maintain its vital position within the European
energy market. Some commentators have even gone so far as to state that Russia exploits
the western lack of morals and ethics in relation to capitalism, and that it is this that maintains
the geopolitical status quo between the EU and Russia.281 Whatever truth there may be in
such opinions, the fact remains that integration within the EU's energy sector suffers as much
from obstruction by domestic actors as it does from foreign ones.
A further factor explaining the incompatibility of EU integrative policies in the energy
sector with the interests of many Member States is the existence of very questionable
competitive practices among such Member States, which may in fact deter true competition
in energy production and delivery.282
The gas sector within the EU is for the most part
dominated by large national energy companies with significant vertical integration.283 EU
efforts to push forward a policy for energy decentralisation effectively run counter to the
traditionally centralised and vertically integrated industrial systems that are already in place
in numerous EU Member States.284
Although efforts for decentralisation within the EU's
industrial sector have been systematic and had a stronger legal-regulatory base when
278
279
280
281
282
283
284
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P7.
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P8.
Majone Giandomenico, Is the Community Method Still Viable? in The Community Method:
Obstinate or Obsolete? ed. Renaud De H, 16-42 (New York: Palgrave Macmillan, 2011), P31.
Edward, Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P110.
Majone Giandomenico, Is the Community Method Still Viable? in The Community Method:
Obstinate or Obsolete? ed. Renaud De H, 16-42 (New York: Palgrave Macmillan, 2011), P16.
Jeffrey Harrop, The Political Economy of Integration in the European Union (Massachusetts:
Edward Elgar Publishing Inc, 2000), P146.
Paul M, European Integration and Industrial Relations in Integration in an Expanding European
Union: Reassessing the Fundamentals, ed. J.H.H W and Iain B. and John P, (Oxford: Blackwell
Publishing Ltd, 2003), P169.
67
compared to similar efforts in the UK and the U.S.,285 there is still considerable resistance to
such efforts within the energy sector. Liberalization of the energy market and breaking down
barriers between Member States may benefit the Union as a whole,286 and to some extent
energy customers through lower energy prices.287 However, unbundling may also deprive
powerful European as well as foreign energy companies of their local market dominance,
thereby (among other things) limiting incentives for investment in energy infrastructure.288
Within the natural gas sector of the EU there are only a handful of companies which
effectively dominate the market. Germany's Ruhrgas, Frances Gaz de France and Italy's
ENI import more than half the natural gas used by the European natural gas market.289
Although better energy infrastructure could help them expand their services and possibly
increase their profits the other side of the coin is the added competition they have to contend
with coupled with restrictions on their inability to both sell and distribute the natural gas due
to the EU's Third Energy Package.290 The interests of these companies, therefore, do not
necessarily align with those of the EU and that may help to explain the extensive part they
have played in key natural gas infrastructure projects in cooperation with Russia's Gazprom.
Another way in which the EU might be able to mitigate the potential negative effects of
such domestic discord, should Russia choose to use its energy weapon against a Member
State, is through its emergency energy plan from 2010: Emergency Measure 994/2010. If
activated, this would involve banning the re-export and sale at higher prices of imported
liquefied natural gas a common practice, as well as the limiting of industrial use of natural
gas.
Further, the EU's Member States may be required to increase their natural gas
reserves past the regulatory minimum in order to compensate for any cut-offs.291 However,
these measures would only be able to serve as temporary solutions to the far greater
problem facing the EU with regard to its energy infrastructure and diversification efforts.
285
286
287
288
289
290
291
Paul M, European Integration and Industrial Relations in Integration in an Expanding European
Union: Reassessing the Fundamentals, ed. J.H.H W and Iain B. and John P, (Oxford: Blackwell
Publishing Ltd, 2003), P172-173.
Edward, Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P164.
International Energy Agency, Regulatory Reform: European Gas (Paris: IEA, 2000), P11.
International Energy Agency, Regulatory Reform: European Gas (Paris: IEA, 2000), P16.
M-F. Chabriele and A. Lecarpentier, The Players on the European Gas Market: Positioning and
Strategies, (Geneva: Cedigaz, 2005), P8.
European Commission, Questions and answers (Brussels: European Commission, 2007), P8-9.
Henning Gloystein, Europe drafts emergency energy plan with eye on Russia gas shut-down,
Reuters, 1 September, 2014, http://uk.reuters.com/article/2014/09/01/uk-ukraine-crisis-russiagas-idUKKBN0GW2DX20140901
68
V. NATIONAL INTERESTS VS. EUROPEAN INTERESTS
5.1 Rhetoric vs. Reality If the success and extent of the EU integration within the energy sphere is reviewed it
becomes clear that the increasing reliance of the EU and its Member States on natural gas
from Russia has caused considerable division within the Union.292 Some EU Member States
struggle to ensure their own national energy interests in the face of increasing pressure from
the EU for further integration in the energy sector, whilst others help push for further
integration.293 The bilateral and autonomous approach to energy security still adhered to by
many EU Member States has been greatly criticized by those Member States advocating
closer cooperation in the energy sector, especially those from the post-Soviet space.294 For
them, the imperative for a united front in the energy sector is driven less by general
integrative logic, and more by deteriorating political relations with Russia due to Moscow's
aggressive policies towards them and their neighbours.295
The EU’s treaties, policy directives and regulations all support further integration within the
energy sector.296 When it comes to actual implementation, however, most EU Member States
have been less than proficient in that regard.297 The prioritization of national interests with
regard to energy security, and a willingness to increase European dependence on Russian
natural gas, can be seen quite clearly – as already mentioned - through the substantial
support by various EU Member States and European energy companies for the Nord-Stream
pipeline298, completed in 2012, and the proposed South-Stream pipeline which would
connect Russia directly to the EU's south-eastern regions.299
5.2 The Nord-­‐Stream pipeline The Nord-Stream pipeline is unique in a number of ways, but primarily so as the first natural
gas pipeline to directly connect the western half of the EU and Russia. The project itself was
a feat of engineering and Nord-Stream remains the largest sub-sea natural gas pipeline to
292
293
294
295
296
297
298
299
F. William Engdahl, Pipeline Geopolitics: The Russia German Nord Stream Strategic Gas
Pipeline, Global Research, 09 July, 2010, http://www.globalresearch.ca/pipeline-geopolitics-therussia-german-nord-stream-strategic-gas-pipeline/20080
The General Secretariat of the European Council. 4 FEBRUARY 2011 CONCLUSIONS
(Brussels: European Commission, 2011), P6.
Andrew Rettman, Poland urges Germany to buy less Russian gas, EU Observer, 10 March,
2014,
Directorate-General for External Policies of The Union, EU -Russia Relations and the Shared
Neighbourhood: An Overview (Brussels: European Commission, 2011), P13-16.
European Commission. European Energy Security Strategy: Communication (Brussels:
European Commission, 2014), P8-12.
Directorate-General for Energy and Transport, Fuelling our Future (Brussels: European
Commission, 2006), P2.
Andrew E. Kramer, Russia Gas Pipeline Heightens East Europe’s Fears, The New York Times,
12 October, 2009, http://www.nytimes.com/2009/10/13/world/europe/13pipes.html?_r=1&
South-Stream Info, Partners, South-Stream.info, date published: unknown, http://www.southstream.info/en/partners/
69
date, stretching 1,224km from Russia through the Baltic Sea to Germany.
Both twin
pipelines were on stream in 2012 and currently supply the EU with 55 billion cubic meters of
natural gas per annum.300 The reasons behind the construction of the Nord-Stream pipeline
were in part a strategic decision by Russia to counter EU energy diversification efforts,301
combined with customers’ energy supply concerns as a result of the unreliable political and
economic situations in some of the transit countries.302
Russia was very keen on a direct connection with one its biggest customers, Germany,
while both Russia and Germany wanted to limit any possible energy flow problems by
removing some of the post-soviet space countries from the equation (especially Belarus.)303
The economic and supply security benefits notwithstanding, the project created immense
friction within the EU family.304
Ruhrgas
305
Spearheaded by Russia's Gazprom and Germany's
, later to be joined by Dutch and French gas companies, Nord-Stream not only
excluded Belarus but it also effectively circumvented Poland and the Baltic States. This
greatly reduced their financial gains in transit fees, and denied them their previous strategic
and political leverage vis-à-vis Russia and the western EU Member States.306 So incensed
was former Polish Defence Minister Radoslaw Sikorski by the endeavour that he likened the
Nord-Stream deal to the one made between Ribbentrop and Molotov in 1939.307 Poland and
Slovakia and the Czech Republic voiced their concerns that the Nord-Stream pipeline would
enable Russia to wield considerable political leverage over them by being able to cut off or
limit their gas supplies without it affecting Western Europe's supplies.308
A report regarding the security implications of the Nord-Stream pipeline, based on
previous work performed by the Swedish Defence Research Agency, was requested by the
European Parliament's Committee on Foreign Affairs in 2008. It stated that the pipeline was
of great strategic importance to Russia and that it conflicted with the interests of several EU
Member States.309 It also noted that, considering the 50-year-plus life-span of the pipeline, it
300
301
302
303
304
305
306
307
308
309
Nord-Stream, The Project, Nord-Stream, date published: unknown, http://www.nordstream.com/the-project/
Directorate-General for External Policies of The Union, Security Implications of the Nord Stream
Project (Brussels: European Commission, 2008), P3-6.
Directorate-General for External Policies of The Union, Security Implications of the Nord Stream
Project (Brussels: European Commission, 2008), P3-4.
Directorate-General for External Policies of The Union, Security Implications of the Nord Stream
Project (Brussels: European Commission, 2008), P5.
Fridjtof Nansens Institutt, Nord Stream: Not Just a Pipeline (Lysaker: FNI, 2008), P18.
Fridjtof Nansens Institutt, Nord Stream: Not Just a Pipeline (Lysaker: FNI, 2008), P5-6.
Fridjtof Nansens Institutt, Nord Stream: Not Just a Pipeline (Lysaker: FNI, 2008), P18-22.
F. William Engdahl, Pipeline Geopolitics: The Russia German Nord Stream Strategic Gas
Pipeline, Global Research, 09 July, 2010, http://www.globalresearch.ca/pipeline-geopolitics-therussia-german-nord-stream-strategic-gas-pipeline/20080
Fridjtof Nansens Institutt, Nord Stream: Not Just a Pipeline (Lysaker: FNI, 2008), P25.
Directorate-General for External Policies of The Union, Security Implications of the Nord Stream
Project (Brussels: European Commission, 2008), P3-6.
70
would be impossible to gauge the nature of Russian-EU relations over such a long period making the potential geopolitical ramifications of the pipeline for the EU “highly
unpredictable”.310
Map 5 - Nord-Stream Pipeline311
Further, it re-emphasized the politically divisive effects that the pipeline could have within
the EU and the substantial geopolitical benefits for Russia, given the significant increase in
the EU’s dependence on Russian natural gas that would result from the Nord-Stream
project.312 The report went on to say that the EU common energy strategy as set forth in the
EU's Green Book on Energy in 2006 might be negatively affected as a result of divisive
competition between EU Member States.313 Criticisms of the project and concerns over the
geopolitical implications of an increasing dependence of Europe on Russian natural gas were
also voiced by the United States government, and former U.S Ambassador to Sweden
Michael Wood even went on to publicly state, in relation to the proposed Nord-Stream
pipeline, that European imports of Russian gas were “a threat against Sweden”314 - this
despite the fact that Swedish imports of Russian natural gas are close to none.
Despite these and many other arguments highlighting the negative strategic geopolitical
effects that the Nord-Stream pipeline may have, Denmark, the Netherlands, Germany,
France and the UK have all signed long-term agreements for Russian natural gas supplies
310
311
312
313
314
Directorate-General for External Policies of The Union, Security Implications of the Nord Stream
Project (Brussels: European Commission, 2008), P2.
Gazprom,
Events,
Gazprom,
Date
Published:
Unknown,
http://www.gazprom.com/about/production/projects/pipelines/nord-stream/
Directorate-General for External Policies of The Union, Security Implications of the Nord Stream
Project (Brussels: European Commission, 2008), P7-9.
Directorate-General for External Policies of The Union, Security Implications of the Nord Stream
Project (Brussels: European Commission, 2008), P14-15.
Barents Observer, USA warns against Nord Stream project,. Barents Observer, 15 September,
2008, http://barentsobserver.com/en/node/21422
71
via Nord-Stream.315
It would seem that some of the nations of Europe have found the
economic benefits of such a direct pipeline to Russia to greatly outweigh the geopolitical
consequences for the EU collectively, and especially for its eastern Member States. Despite
Russia's intervention in Georgia in 2008316 and its annexation of Crimea in 2014317, a similar
pipeline to the Nord-Stream, called the South-Stream pipeline, is still underway and has
continuing support from various European energy companies and their respective
governments318, despite considerable reservations voiced by the EU.319
5.3 The South-­‐Stream pipeline The South-Stream pipeline, like its northern counterpart, would be a sub-sea dual-pipe
natural gas pipeline that would run from Russia under the Black Sea to Bulgaria. From there
the pipeline would split up into numerous smaller pipelines travelling through Greece towards
Italy and through Serbia towards Austria.320 Numerous other proposed routes are still being
considered. The South-Stream pipeline would supply Europe with more than 60 billion cubic
meters of gas per annum and would be twice as long as its northern counterpart, stretching
over 2,400km.321 Russia's Gazprom along with Italy's ENI began the project in 2006, but
now numerous other European partners have joined and so far Gazprom has signed
intergovernmental agreements with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia
and Austria. Further, France, Romania, Macedonia and Germany have expressed interest in
taking part in the project.322 In late 2011 Turkey granted Gazprom a permit for the SouthStream natural gas pipeline to pass through its exclusive economic zone in the Black Sea323,
thereby eliminating one of the last remaining obstacles to the project.
315
316
317
318
319
320
321
322
323
F. William Engdahl, Pipeline Geopolitics: The Russia German Nord Stream Strategic Gas
Pipeline, Global Research, 09 July, 2010, http://www.globalresearch.ca/pipeline-geopolitics-therussia-german-nord-stream-strategic-gas-pipeline/20080
CNN, 2008 Georgia Russia Conflict Fast Facts, CNN, 16 March, 2014,
http://edition.cnn.com/2014/03/13/world/europe/2008-georgia-russia-conflict/
Nafeez Ahmed, Ukraine crisis is about Great Power oil, gas pipeline rivalry, The Guardian, 06
March, 2014, http://www.theguardian.com/environment/earth-insight/2014/mar/06/ukraine-crisisgreat-power-oil-gas-rivals-pipelines
South-Stream Info, Project History, South-Stream.info, date published: unknown,
http://www.south-stream.info/en/pipeline/history/
R. Teichmann, Gas Pipeline Wars: The EU Threatens to Obstruct Gazprom’s South Stream
Projec,. Global Research. 10 June, 2014, http://www.globalresearch.ca/gas-pipeline-wars-theeu-threatens-to-obstruct-gazproms-south-stream-project/5386475
South-Stream Info, Gas Pipeline Route, South-Stream.info, date published: unknown,
http://www.south-stream.info/en/route/
Gazprom, South Stream, Gazprom, date published: unknown,
http://www.gazprom.com/about/production/projects/pipelines/south-stream/
South-Stream Info, Partners, South-Stream.info, date published: unknown, http://www.southstream.info/en/partners/
Gazprom, Turkey approves EIA Report for South Stream’s offshore section, 24 July, 2014,
www.gazprom.com/press/news/2014/july/article196939/
72
Map 6 - South-Stream Pipeline324
The construction of a southern direct pipeline from Russia into Europe will result in a very
similar benefits-vs-costs scenario for the EU as did the Nord-Stream pipeline.
Like its
northern counterpart, the South-Stream pipeline will ensure that individual EU Member
States receive a secure supply of natural gas from Russia, whilst simultaneously
undermining the EU's collective political leverage vis-à-vis Russia and any energy
diversification efforts made by the EU in the region.325 Circumventing Ukraine, the pipeline
will, as in the previous case of Belarus, also ensure that any political instability within the
Ukraine or disputes between it and Russia will not affect the supply of natural gas to Europe,
as was the case in 2006 and in 2009.326 Further, the Ukraine will lose immense geostrategic
value as one of the main transit countries of Russian natural gas to Europe327, not to mention
billions of Euros per annum in transit fees.328
324
325
326
327
328
Gazprom, Gazprom pushing ahead with South Stream and Southern Corridor projects,
Gazprom, 11 February, 2014,
http://www.gazprom.com/press/news/2014/february/article184145/
Istituto Affari Internazionali, The Southern Gas Corridor: Europe’s Lifeline? (Rome: IAI, 2014)
P3-4.
Reuters, Factbox: Russia's energy disputes with Ukraine and Belarus, Reuters, 21 December,
2012, http://www.reuters.com/article/2012/12/21/us-russia-gas-disputesidUSBRE8BK11T20121221
Lenard J. Cohen, Security Perspectives in Post-Communist Eastern Europe: "Easternization"
and "Europeanization," in The Changing Politics of European Security: Europe Alone? ed.
Stefan Ganzle and Allen G. Sens, 47-66. (UK: Palgrave Schol, 2007), P63.
Euractiv, Ukraine says it will 'remove need' for South Stream pipeline., EurActiv, 20 June, 2014,
http://www.euractiv.com/sections/energy/ukraine-says-it-will-remove-need-south-stream-
73
In this connection as in others, the uprising in Kiev in 2013, the subsequent ousting of
President Yanukovich,329 and Russia's heavy-handed response through its annexation of
Crimea and support for Ukrainian separatist forces in eastern Ukraine330 have once again put
immense political pressure on the EU to take a resolute stance against Russia. Due to the
Ukrainian crisis the EU finds itself in a Catch-22 situation in which it must assert itself in
defence of Ukraine against Russian aggression, but in so doing, it may cause its Member
States considerable economic damage.331 Already the extent of Russian political influence
through the EU's energy sector within numerous EU Member States can be seen through the
lacklustre sanctions being employed against Russia, and the split opinions of Member States
regarding an appropriate response to the Ukrainian crisis.332
The EU as an institution has, however, made several attempts to stall the South-Stream
project through various diplomatic and legal measures.333 The European Commission has
put pressure on the Member States involved in South-Stream to cease work on the project
until a solution to the Ukrainian crisis has been reached.334 Furthermore, the Commission
has declared previous intergovernmental agreements between Russia and those Member
States involved in the South-Stream project, some of which date back more than 6 years, to
be in breach of EU anti-trust laws.335 The Commission is now putting more pressure on
Gazprom to operate according to the separation of supply and production rules set forth in
the EU's Third Energy Package, which came into force in 2011.336 This means that Gazprom
is effectively not allowed to be both producer and operator of its pipelines within the EU.337
329
330
331
332
333
334
335
336
337
pipeline-302938
AlJazeera, Timeline: Ukraine's political crisis. Al Jazeera, 30 July, 2014,
http://www.aljazeera.com/news/europe/2014/03/timeline-ukraine-political-crisis201431143722854652.html
AlJazeera, Timeline: Ukraine's political crisis. Al Jazeera, 30 July, 2014,
http://www.aljazeera.com/news/europe/2014/03/timeline-ukraine-political-crisis201431143722854652.html
Inyoung Hwang, European Stocks Retreat as Ukraine Tension Escalates, Bloomberg, 17 July,
2014, http://www.bloomberg.com/news/2014-07-17/european-stock-futures-fall-amid-morerussian-sanctions.html
Indira A.R. Lakshmanan and Ewa Krukowska, Russian Gas Reliance in Europe Skewing
Sanctions Debate, Bloomberg, 27 May, 2014, http://www.bloomberg.com/news/2014-05-26/aeurope-hooked-on-russian-gas-debates-imposing-sanctions.html
R. Teichmann, Gas Pipeline Wars: The EU Threatens to Obstruct Gazprom’s South Stream
Project, Global Research, 10 June, 2014, http://www.globalresearch.ca/gas-pipeline-wars-theeu-threatens-to-obstruct-gazproms-south-stream-project/5386475
RFERL, EU Tells Bulgaria To Suspend South Stream Gas Project, Radio Free Europe Radio
Liberty, 30 July, 2014, http://www.rferl.org/content/eu-tells-bulgaria-to-suspend-south-streamgas-project-/25408905.html
Adrian Croft, Gazprom to hold new talks with EU on antitrust probe, Reuters, 22 January, 2014,
http://www.reuters.com/article/2014/01/22/us-eu-gazprom-idUSBREA0L1C120140122
European Commission, Questions and answers (Brussels: European Commission, 2007), P8-9.
Sergei Komlev, The Third Energy Package and its Impact on Gazprom Activities in Europe
(EBC Working Committee „ENERGY“: Sub Working Group „Natural Gas markets.“ Essen, 18
March, 2011), P3.
74
Given that Gazprom is the only company allowed to export natural gas from Russia and that
the rules within the Third Energy Package apply retroactively, Gazprom has reacted by
reallocating ownership of its already existing natural gas infrastructure and other energy
investments into other companies under its control within the EU.338 The EU’s demands
have the potential to cause huge losses in revenue for Gazprom, which has had to make
considerable changes to its infrastructure in order to comply with and evade some of the new
regulations.339 In response to this Russia has brought a case against the EU to the WTO,
the result of which remains to be seen.340
Despite the situation in the Ukraine and pressure from the EU to stall the project, both the
respective governments of Austria and Italy have declared publicly that they intend to
continue work on the South-Stream pipeline.341 Similar statements have been made by EU
applicant state Serbia.342 Even Bulgaria, which has ceded to pressure from the EU to halt
work on the project343, has publicly stated its desire to see the project completed.344 National
energy security concerns of the EU Member States involved in the South-Stream project
seem to once again trump the geopolitical needs of the EU as a whole and its foreign policy
stance regarding Ukraine and Russia. A key factor that seems to be driving the project
forward, despite the serious geopolitical ramifications that its completion could have for the
EU as a whole with regard to Russia, has been the abandonment of the EU-sponsored
alternative pipeline project in the region called Nabucco – a failure directly linked among
other things with the South-Stream project.
5.4 The Nabucco pipeline The Nabucco pipeline project was the EU's only significant alternative to the South-Stream
pipeline.345 Planning for the Nabucco pipeline began in 2002 and was sponsored by both the
338
339
340
341
342
343
344
345
Interfax, Gazprom decides to restructure European assets due to 3rd Energy Package, Interfax,
19 September, 2012, http://www.interfax.com/newsinf.asp?id=361880
Sergei Komlev, The Third Energy Package and its Impact on Gazprom Activities in Europe
(EBC Working Committee „ENERGY“: Sub Working Group „Natural Gas markets.“ Essen, 18
March, 2011), P3.
R. Teichmann, Gas Pipeline Wars: The EU Threatens to Obstruct Gazprom’s South Stream
Project, Global Research, 10 June, 2014, http://www.globalresearch.ca/gas-pipeline-wars-theeu-threatens-to-obstruct-gazproms-south-stream-project/5386475
Gurkan E. Abay, Russian South Stream gas pipeline divides EU, Anadolu Agency, 4 July, 2014,
http://www.aa.com.tr/en/news/354285--russian-south-stream-gas-pipeline-divides-eu
InSerbia, Serbia, Hungary to continue South Stream construction, Independent News Serbia, 1
July, 2014, http://inserbia.info/today/2014/07/serbia-hungary-to-continue-south-streamconstruction/
BBC. Bulgaria halts work on gas pipeline after US talks. BBC, 8 June, 2014.
http://www.bbc.com/news/business-27755032
Elizabeth Konstantinova, Russia, Bulgaria Seek Quick Resumption of South Stream,
Bloomberg, 7 July, 2014, http://www.bloomberg.com/news/2014-07-07/russia-bulgaria-seekquick-resumption-of-south-stream.html
Clara Weiss, European Union’s Nabucco pipeline project aborted. World Socialist Website. 13
July, 2014. http://www.wsws.org/en/articles/2013/07/13/nabu-j13.html
75
EU and the U.S.346 Natural gas for the Nabucco pipeline was to be supplied by Iraq,
Azerbaijan and Turkmenistan and was to run through Turkey, Bulgaria, Romania and
Hungary to Austria.347 The pipeline would have had half the capacity of the South-Stream
pipeline, at only 31 billion cubic meters per annum, and would have stretched an astounding
3,900km (later to be reduced to 1,300km).348
As part of the EU's southern gas corridor strategy, the purpose of the Nabucco pipeline
was to diversify the EU’s natural gas suppliers in the Caspian region and provide an
alternative to Russian natural gas for the EU’s southern territory.349 In 2014, after years of
delays and losing all of the proposed gas suppliers except Azerbaijan, the project was
officially abandoned in favour of the much smaller 10 billion cubic meter per annum capacity
Trans-Adriatic pipeline (TAP).350 The Nabucco failure has further bolstered support for the
South-Stream project, meaning that Russian political influence in the region is secure for
now.
The failure of the Nabucco pipeline project is not only a blow to the EU's energy
diversification strategy. It also signals a serious lack of political cohesion within the EU in
relation to a single energy strategy vis-à-vis Russia, and a lack of political will by some EU
Member States to adhere to that common strategy of energy diversification. Once again,
further integration of the EU is being resisted by numerous EU Member States (including
some of those normally considered as federalists), and as a result the tenets set by neofunctionalism seem to be giving way to a form of inter-governmental realism.
Even if
Russian aggression acted as a temporary catalyst for unanimity within the EU in 2008, when
the “Gazprom clause” was adopted351, the overall consensus regarding Russia within the EU
is not cohesive today, nor does it place the needs of the Union above those of its individual
Member States.
346
347
348
349
350
351
European Commission. European Energy Security Strategy: Communication (Brussels:
European Commission, 2014), P16.
Judy Dempsey, Victory for Russia As the EU’s Nabucco Gas Project Collapses. Carnegie
Europe, s1 July, 2013. http://www.carnegieeurope.eu/strategiceurope/?fa=52246
Clara Weiss, European Union’s Nabucco pipeline project aborted. World Socialist Website. 13
July, 2014. http://www.wsws.org/en/articles/2013/07/13/nabu-j13.html
Clara Weiss, European Union’s Nabucco pipeline project aborted. World Socialist Website. 13
July, 2014. http://www.wsws.org/en/articles/2013/07/13/nabu-j13.html
Judy Dempsey, Victory for Russia As the EU’s Nabucco Gas Project Collapses. Carnegie
Europe, s1 July, 2013. http://www.carnegieeurope.eu/strategiceurope/?fa=52246
Fabrizio Tassinari, Why Europe Fears Its Neighbours (Santa Barbara, CA Praeger, 2009), P77.
76
Map 7 - South-Stream, Nord-Stream and Nabucco Pipelines352
Creating any political willingness among the EU's Member States to reduce their reliance
on Russian natural gas faces three enormous obstacles. First is the general picture of EU
energy dependence and its less-than-rational approach to possible solutions, as set out in
chapter 4 above. There seems no escape even in the medium to long term from the fact that
the EU consumes much more energy than it produces. Any efforts to mitigate this through
increased use of nuclear power or shale gas exploration would constitute political suicide for
most political parties in Europe, due to pressures from environmental groups and general
public unwillingness to utilize such sources of energy within Europe, not to mention the strict
guidelines set by the EU's own carbon emission roadmaps.353 As already noted, the results
of this can be seen in Germany's abandonment of nuclear energy and a return to coal354 and
the banning of fracking in some EU countries.355 Second, as was previously mentioned,
there is great pressure on policy-makers from various European energy companies such as
Germany's Ruhrgas, Italy's ENI and France's Total, some of whom have extensive links to
Russia's Gazprom, to maintain the status quo for purely commercial reasons. Leaders in
Europe are thus facing pressures from both the left and the right,356 which makes it politically
352
353
354
355
356
BBC, Nord Stream gas pipeline underwater construction starts, BBC, 9 April, 2010,
http://news.bbc.co.uk/2/hi/business/8607214.stm
European Commission. Energy Roadmap 2050 (Brussels: European Commission, 2011), P2
James Conca, James, Germany -- Insane Or Just Plain Stupid? Forbes, 31 August, 2012,
http://www.forbes.com/sites/jamesconca/2012/08/31/germany-insane-or-just-plain-stupid/
Katarzyna Klimasinska, European Fracking Bans Open Market for U.S. Gas Exports,
Bloomberg, 23 May, 2012, http://www.bloomberg.com/news/2012-05-23/european-frackingbans-open-market-for-u-s-gas-exports-1-.html
Edward, Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P174.
77
impossible for them to take active measures to decrease Russia's influence in the EU's
energy sector.
The third and potentially most dangerous factor for the EU is that it is essentially split with
regard to the Russian “problem”.357
Russia has quite effectively applied very different
diplomatic tactics within the EU, giving its western members a rather soft-handed approach,
whereas the EU's eastern members get much rougher treatment. Prior to EU membership
both Latvia and Lithuania experienced Russian energy cut-offs when their respective
governments did not accept the Russian demand for Russian-owned companies to be part of
energy sector privatization efforts. From 1998 to 2000 Lithuania's oil supplies were cut 9
times by Russia's Transneft and in 2004 Latvia’s oil was cut off as well. Again in 2006, when
Lithuania opted to sell an energy facility to a Polish company rather than a Russian one,
Russia reacted by terminating oil transport through Lithuania's Druzhba (“friendship”)
pipeline.358
The EU's reaction to these events was practically non-existent359 and while Russia
continued to utilize energy cut-offs in order to influence and punish its western neighbours in
the post-soviet space, the EU's most influential member - Germany - was busy securing the
Nord-Stream pipeline project. The EU's relatively new eastern Member States lack both the
political and economic power to compel change within the EU regarding a cohesive policy
towards Russia in the energy sector. This presents a very serious problem for the EU project
as a whole: if its members cannot depend upon the Union for protection from Russia with
regard to energy security, then a large part of the incentive for membership is severely
compromised. Arguably, however, given the high importance of energy within any nationstate’s interests, it is perhaps unrealistic for the EU's eastern Member States to rely upon the
EU for protection in this aspect - any more than they can rely on the EU for “hard” military or
defensive purposes.
This situation then once again confronts the EU with the limits of
integration as set forth by neo-functionalism; it explains why the idea of creating an energy
union, as advocated by Poland's Prime-Minister Donald Tusk360, faces similar problems to
that of a future European military union.361
357
358
359
360
361
Dmitry Danilov, Russia and the ESDP: Partnership Strategy versus Strategic Partnership, in
The Changing Politics of European Security: Europe Alone? ed. Stefan Ganzle and Allen G.
Sens, 135-160. (UK: Palgrave Schol, 2007), P146.
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P5-6.
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P6.
J.C, Paying the Price: Donald Tusk's Energy Union, The Economist, 29 April, 2014,
http://www.economist.com/blogs/easternapproaches/2014/04/donald-tusks-energy-union
Dmitry Danilov, Russia and the ESDP: Partnership Strategy versus Strategic Partnership, in
The Changing Politics of European Security: Europe Alone? ed. Stefan Ganzle and Allen G.
Sens, 135-160. (UK: Palgrave Schol, 2007), P141.
78
5.5. Germany When reviewing Russian-EU energy relations there is one European country in particular that
must be mentioned, due to its size, wealth and potential to act as unifying actor for the EU
Member States, and that is Germany. Russia's relationship with Germany is central not only
to its overall relations with the EU, but also in terms of any shift towards further energy
integration within Europe. For years German governments have operated via a so-called
“change through interweavement (Wandel durch Verflechtung)” approach362363 towards
Russia. This policy is based on Germany's Ostpolitik and the pre-unification “change through
rapprochement” policy that consisted in the belief that peace in Europe could only be
achieved by working with Russia not against it. These policies are very similar to the neofunctionalist approach of EU integration in that Germany hoped that interaction with Russia
would eventually spill over into other areas within Russia and would eventually help to
transform Russia into a liberal and democratic Europeanized nation. The reality, however, is
that this policy has had seemingly little effect as Russia's domestic and foreign policies
continue to operate via traditional realpolitik,364 often to the detriment of its relations with the
EU.
Germany has been heavily criticized over the years for its energy policies with regard to
Russia, most of which have negatively affected any moves by the EU to further integrate the
European energy sector or counter Russian influence within the European energy market.
These include things like the controversial Nord-Stream pipeline project, which is run by a
company of which former German Chancellor Gerhard Schroeder is now CEO365. Although,
it must be stated Germany was not alone in this venture and that numerous other EU
Member States took part in that project366. Another unpopular energy policy has been the
on-going termination in use of nuclear reactors in favour of coal and natural gas power
plants, something that is predicted to further increase German dependence on Russian
natural gas and increase carbon emissions considerably. Another issue that has caused
considerable friction within the EU has been the opposition by German energy companies
and the German government to the unbundling of energy companies dealing with natural gas
362
363
364
365
366
Stefan Meister, Reframing Germany’s Russia Policy – An Opportunity For The EU, European
Council on Foreign Relations 100, (April 2014): P8.
Edward, Lucas, The New Cold War (New York: Palgrave Macmillan. 2008), P174.
Pavel K. Baev, The Russian Federation: Striving for multipolarity but missing the consequences,
in Great Powers and Strategic Stability in the 21st Century: Competing Visions of World Order,
ed. Graeme P. Herd, 117-131. (New York: Routledge, 2010), P119, P132.
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P13.
Andrew E. Kramer, Russia Gas Pipeline Heightens East Europe’s Fears, The New York Times,
12 October, 2009, http://www.nytimes.com/2009/10/13/world/europe/13pipes.html?_r=1&
79
and electricity367368. The fact that its most influential member opposes such a core aspect of
the EU’s plans for the liberalization of the energy market does not bode well for the EU.
So far the Kremlin has acted in a benign and preferential manner towards Germany,
leaving German energy companies operating within Russia alone whilst confiscating shares
of other western energy companies investments369. Despite the considerable level of support
which Russia enjoys from Germany, it's actions in Crimea and Ukraine in 2014 have put
Germany into a very difficult position in which it has had to take a much more public antiRussian stance370371. Whether or not German policies towards Russia will fundamentally
change because of the Ukrainian crisis remains to be seen, but having the closest
relationship of any European state with Russia in the energy sector372 means that Germany
may hold the key to a cohesive European energy policy with regard to Russia.
5.6 Summing up In sum: The EU faces a number of challenges with regard to natural gas. It has decreased
domestic production capabilities whilst domestic demand continues to increase.
It
recognizes the need to diversify its sources of natural gas, but as of yet has not taken
enough action in order to fully realize this goal; on the contrary, individual Member States
and European companies have taken active steps to ensure a continuing Russian presence
on the European gas market. Furthermore, the EU's natural gas infrastructure is lacking in
sufficient integration and storage capacity, which among other things reduces the potential
for LNG as an alternative to Russian natural gas. Combined with the planned reduction of
nuclear power in some Member States, and their use of the more polluting coal-fired power
plants to make up for their losses, the result may be that environmental pressures make
natural gas as prime contender to act as a replacement or “bridge” fuel for Europe until
renewable energy sources become viable alternatives. What this means is that there will be
a continuing, if not increasing, Russian presence on the European energy market, and an
additional factor of Russian leverage within the wider European geopolitical sphere.
367
368
369
370
371
372
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P14
Reuters. German minister opposes EU utility unbundling idea. 20 January, 2007.
http://uk.reuters.com/article/2007/01/20/energy-eu-germany-idUKL2056183720070120
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P13.
Charlemagne, EU and Russia Sanctions: Putin untouched, The Economist, 17 March, 2014,
http://www.economist.com/blogs/charlemagne/2014/03/eu-and-russiasanctions?page=4&spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709
Stefan Meister, Reframing Germany’s Russia Policy – An Opportunity For The EU, European
Council on Foreign Relations 100, (April 2014): P5.
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P14.
80
Given energy security's importance to the political, military and economic sectors,
ensuring such security within Europe may be vital to the EU's cohesiveness and its
credibility, both for its Member States and other world actors. For example, the current ability
of Gazprom to underbid western gas companies and offer some EU member states differing
price rates than others is highly divisive and helps to promote non-transparent practices in
energy deals.373 The economic consequences of division within the EU on matters of energy
could mean further energy price differences between member states resulting in tariffs or
other protectionist measures such as resource nationalism,374 etc. All of this would lead to
further division and not integration within the European energy sector.
Another negative consequence of the EU’s inability or unwillingness to sway many of its
Member States into taking effective action to counter the political, military and energy
security threat that many of its eastern members perceive from Russia375 is that it erodes
trust in the EU's institutions, calling into question the effectiveness of the “Community
method”376 and mutual support between its members. Indeed, if neo-functionalism’s tenets
regarding spill-over are correct, such division could easily spread into other policy areas of
the EU, as those Member States who feel most vulnerable vis-à-vis Russia may try and use
what leverage they have in other sectors to pressure other members into supporting further
integration within the energy sector. Such a development could just as easily lead to an
atmosphere of suspicion and mistrust, further corroding intergovernmental relations within
the EU rather than strengthening them.
373
374
375
376
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P9.
Leonor Coutinho and Zenon Kontolemis and Alexander Michaelides. Coutinho, Leonor and
Kontolemis, Zenon and Michaelides, Alexander. Resource nationalism: a blessing or a curse?
Europrism, no. 01 (April 2012): 1-8.
Center for Strategic & International Studies. Russia and European Energy Security: Divide and
Dominate (Washington D.C: CSIS, 2008), P2, P15.
Majone Giandomenico, Is the Community Method Still Viable? in The Community Method:
Obstinate or Obsolete? ed. Renaud De H, 16-42 (New York: Palgrave Macmillan, 2011), P33.
81
VI.
CONCLUSION
Efforts to curtail or at least limit Russian influence within the EU political and energy sphere
continue, but due to substantial division within the union (as explored in chapter 5) these
measures have so far had limited effects. Moreover, the seemingly sound argument that
European regional security concerns should overrule any economic or fiscal reasoning for
wanting to maintain Russia as the main supplier of natural gas is certainly not one that is
shared by all of the EU Member States. However, despite these divisions the EU still has a
number of lines of action within the energy field proper to counteract the geopolitical leverage
provided to Russia via the EU's natural gas dependency. The key questions are: to what
extent have these strategies been successful and what are their chances of being fully
implemented? In order to come to any substantive conclusions regarding future projections
for the EU, in its attempts to secure its energy interests vis-a-vis Russia, it is vital to review to
what extent these initiatives have been successful.
As we have seen, the EU's energy strategy mainly comprises four approaches. These are
increasing the use of renewable energy sources, diversification of suppliers, increasing
domestic production and improving the European energy infrastructure.
The use of
renewable energy sources and phasing out of fossil fuels is a cornerstone of the EU’s 2020
and 2050 Energy Roadmaps. In order to push forward this “green” energy policy the EU has
invested a considerable amount of work and money in trying to get its Member States to
participate in this endeavour. Despite being heavily subsidised, especially the wind and solar
power sectors, the renewable energy sector still only accounts for 14% of total energy
consumption within the EU. Further, the abandonment of nuclear energy for coal within
some Member States such as Germany does pose a considerable obstacle to the EU
achieving its set 20-20-20 targets on time.
Diversification of natural gas suppliers was the key purpose of the aforementioned EUbacked Nabucco pipeline project. Tapping into the vast resources of the Caspian region and
effectively bypassing Russia was both an ambitious and risky venture from the start, and in
the end was effectively dismantled by Russia with the help of some EU Member States and
private European energy companies through their support of the Nord-Stream and SouthStream pipelines. As mentioned in chapter 5, the Trans-Adriatic Pipeline (TAP) chosen as
Nabucco's successor, with its limited capacity, represents no substantial threat to Russian
energy interests within the EU and does little to increase diversification of European natural
gas supplies in any meaningful way. With the Nabucco pipeline project abandoned, finding
an alternative direct natural gas pipeline seems to be a highly unlikely short-term option for
the EU and for that reason does little in regard to diversification.
82
With the shale gas boom in the U.S and the resulting increased exports of cheaper
liquefied natural gas (LNG) abroad, many in Europe have set their sights on LNG as another
possibility for diversification. However, the fact remains that LNG imports to the EU are at
present minimal and were even reduced in 2012 to 18% of total EU natural gas imports. On
top of this, as can be seen in chapter 4, the EU still lacks the necessary LNG terminals to
make LNG any kind of substantial substitute for Russian natural gas. This means that a
transition to LNG would require immense political backing within the EU and would be both
very costly and time consuming; in that sense it is not very relevant to alleviating EU
dependence on Russia natural gas in the near future.
This then leads us to the question of domestic production. However, as is explained in
chapter 4, domestic production of natural gas within the EU provides only a fraction of the
amount needed per annum. With reduced reserves in the Netherlands and Denmark and
possibly smaller reserves than predicted in Norway, fracking, as mentioned previously, is
really the only viable alternative method of domestic gas production within the EU. However,
the controversy surrounding fracking due to the possible negative environmental impact it
can have, coupled with the fact that there is a lot of time-consuming and expensive predrilling preparation involved, makes it also an unlikely alternative for the near future.
As shown in chapters 4 and 5, the EU is currently found to be lacking in sufficient energy
infrastructure integration across its Member States. This means that should any initiatives to
increase imports of LNG or exploit domestic shale gas reserves become a reality, the EU
would not even be able to capitalise on these new sources due to insufficiently linked
infrastructure. Despite considerable domestic and foreign resistance, there has been some
progress made with regard to improving the EU’s energy infrastructure through market
reform and liberalisation and infrastructure initiatives such as the EU’s Third Energy Package
and the Baltic Energy Market Interconnection Plan.
These initiatives show that tangible
progress can be achieved in EU energy integration, although the process may be slow and
imperfect.
Through many of these various initiatives, Russia has been working very hard and often
successfully to sabotage diversification efforts and shale gas exploitation within the EU. The
reasoning behind such efforts seems to stem from a mix of political and economic incentives.
Russia needs Europe to buy its oil and gas, but gains much more financially and politically
from a fragmented rather than united EU. Should Russia be able to further entrench itself
within the European energy infrastructure through purchasing of downstream assets, then it
is very possible that the EU’s own free market rules may end up working against it in the long
run. This is why a cohesive and clear European political agenda towards Russia is crucial to
the success of market liberalization with regard to Russian influence within the EU.
83
Although Russian energy dependence and further integration in the energy sector have
been topics of discussion for quite some time within the EU, Russian actions in Ukraine have
given new urgency to the subject of EU energy integration. Following the dictates of Ole
Wæver’s theory of securitization, the military threat posed by Russia through its new
aggressive approach to defend its sphere of influence has indeed managed to push the
subject of energy into a higher realm of possible security threats. As seen in chapter 3,
recent events in Ukraine have breathed new life into energy integration debates – as well as
strategic debate in general - within the EU and within individual Member States.
There has been some speculation as to whether or not the recent Russian-proposed
ceasefire in eastern Ukraine in early September 2014, was a sign that pressure from the EU
and U.S economic sanctions was finally beginning to have results; however that truce
continues to be very fragile as Russian commitment to it is very questionable. Despite the
tremendously negative economic effects that these sanctions are already having on Russia's
economy and currency, as was mentioned in chapter 3, President Vladimir Putin is
experiencing an incredibly high approval rating in Russia because of his actions in Crimea
and Ukraine that further entrenches his position.
The Kremlin may very well be putting on a brave face concerning the effects that these
sanctions are having on the Russian economy and business sectors, but the domestic
political factor and President Putin's political integrity must also be taken into consideration.
Russia cannot be seen to be bowing to the wishes of the EU or the U.S. over Ukraine, and
as such, President Putin may not be able to back down at this point. The EU and the U.S.
then face the almost impossible task of both remaining tough on Russia, and at the same
time offering Putin the chance to back down with dignity.
Whether there even exists a
solution that all parties, including Kiev as well as Russia, could accept is indeed doubtful.
Putin’s domestic popularity may have soared due to the Ukrainian crisis, but his
international standing has plummeted.
Whether purely domestic political manoeuvring
motivates his actions, or whether Putin and his government truly believe that Russia's core
interests are at stake in the Crimea and elsewhere in Ukraine, the fact remains that Russia
has quickly become viewed as a threat by Europe and the west. If Russia does not cease to
insist on its right to a sphere of influence - seen by some as the key to its new security
agenda - then it must logically become locked into an aggressive foreign policy towards the
post-Soviet space and must prepare for the burden of intervention if any neighbouring nation
displays too much independence or a willingness to increase relations with the EU. This in
turn will mean further isolation from Europe and increased difficulties in its international
relations with the West, not to mention dire economic consequences for Russia, whose
84
massive reliance on energy earnings is a long-term trap and liability as much as a near-term
strength.
Another aspect and result of Russia's aggressive policy towards Ukraine within the postSoviet space is that it may also make Russian plans for a Eurasian Union even more remote.
As was mentioned, the very nature of the EU and its use of economic incentives, soft power,
and granting small states equal representation in some institutions alongside much larger
and more powerful nations are much more attractive and ultimately profitable for the small- to
medium-sized nation-states of the post-Soviet space than a hierarchical Eurasian Union with
Russia. Russian Realpolitik and its domineering attitude and refusal to adhere to the dictates
of constructivism or liberal intergovernmentalism are a big part of the problem. The smaller
states have seen that there is an alternative to the Russia's old-school realism and duality of
the Cold War era and as a result – whether fast or slowly - are gravitating towards Europe,
much to Russia’s frustration.
Russia's recent rather brazen actions seem to indicate that the Kremlin is counting on
certain EU Member States to continue protecting their own national energy interests to the
detriment of the EU’s eastern and Baltic nations.
Given Russia’s predisposition for
Realpolitik it stands to reason that they would assume that a similar line of thinking would
prevail within the EU. Considering the level of leeway that Russia has gained so far in its
actions within the post-Soviet space, it is perhaps not strange that it believes the EU will
eventually back down and rescind its sanctions. However, this is quite a gamble to take.
There has already been a very noticeable change in tone by the EU and its Member States
with regard to Russia due to the Ukrainian crisis.377 Facing a sufficient level of threat and
uncertainty from the Russian side, the very national self-interest and realist calculation that
has so far kept states like Germany faithful to their energy deals might start to dictate tougher
policies both for themselves and for the EU as a whole.
Their investment in long-term
survival and the chance to continue freely practising Western values would trump short-term
economic calculations or the habit of speaking softly in defence of soft power. In our specific
area of study, they might very well see their interests being best served in the long term
through further energy integration rather than continued bilateral agreements with Russia. In
that case, Russia's realism would turn out not to be based on realistic calculations, in the
everyday sense.
However, this is more than just a game of two sides. Despite the wealth and influence of
the EU and the relative attraction of its theoretical foundations vs. that of Russian realism,
377
BBC, Ukraine crisis: New EU sanctions on Russia go into effect, BBC, 12 September, 2014,
http://www.bbc.com/news/world-europe-29154488
85
the fact remains that Russia still has numerous other nations to trade and do business with.
These are nations that may share Russia’s realpolitik view of international relations, nations
such as China. China itself is experiencing tense relations with its neighbours in its efforts to
impose its own sphere of influence in its surrounding regions, albeit not through invasion or
annexation.378 Although China has called for all parties involved in the Ukrainian crisis to
remain calm and solve things through dialogue379 it has still expressed publicly its willingness
for closer ties with Russia and for deeper cooperation in the energy and economic sectors
despite the on-going Ukrainian crisis.380 Chinese economic support for Russia, even if on
terms that heavily favour China itself, undermines in the near term EU and U.S. efforts to
influence Russian foreign policy by providing Moscow with much needed political breathing
room. As such, and especially if Putin misunderstands China's essentially self-serving and
tactical reasoning, it may make Russia’s actions in the post-Soviet space even more
unpredictable.
Russia's actions in annexing Crimea and supporting separatist forces in eastern Ukraine
are a direct violation of Ukrainian sovereignty and represent a threat to regional stability and
peace. As was already mentioned, any recognition of Russia's right to protect its interests
within its sphere of influence by the EU would set a dangerous precedent, not only in terms
of Russia's violation of international law and the UN Charter through its annexation of
Crimea, but also with regard to possible future Russian actions against other post-Soviet
nations that contain large ethnic-Russian minorities. Through further integration of its energy
and defence sectors the EU does have a chance to tip the scales in its favour with regard to
Russia. However, this all hinges upon the political willingness of the EU's most powerful and
influential Member States such as Germany, France and the UK to act as a driving force for
such change. Continuing disputes between Russia and Kiev over gas payments and prices
have meant that certain EU Member States such as Poland have decided to reroute their
natural gas to Ukraine in a show of solidarity with Ukraine and defiance against Russia. This
too has the potential to act as both a unifying factor for the EU’s Member States as well as a
source of conflict between the EU and Russia as Russia has already resorted to restricting
378
Ben Blanchard, China tells U.S. to stay out of South China Seas dispute, Reuters, 15 July,
2014,
http://www.reuters.com/article/2014/07/15/us-china-usa-aseanidUSKBN0FK0CM20140715
379
Ben Blanchard and Michael Martina, China urges restraint in Ukraine, avoids comment on
Crimea vote, Reuters, 17 March, 2014, http://in.reuters.com/article/2014/03/17/ukraine-crisischina-idINDEEA2G03L20140317
Russel Flannery, Russia's Business With China Poised To Grow As Politics Strain Ties With
The West, Forbes, 2 September, 2014,
http://www.forbes.com/sites/russellflannery/2014/09/02/russias-business-with-china-poised-togrow-as-politics-strains-ties-with-the-west/
380
86
gas flow to Poland in order to prevent Poland from being able to alleviate Ukraine’s natural
gas shortages.381
The Ukrainian crisis does mark a possible turning point in EU-Russian relations and in
turn may act as a catalyst for integration within the EU's energy sector much as the 2008
financial crash did for the EU's banking sector.382 That said, there are still some serious
obstacles to such a development. The most prominent obstacle is the complete lack of
institutions or pre-existing infrastructure that could serve as a foundation for such
cooperation, as the European Central Bank did for the banking union.383 A further point of
debate is the fact that Russia has engaged in interference within the post-Soviet space
numerous times before and has caused a number of frozen conflicts in other regions. The
question then remains whether Ukraine is truly the straw that breaks the camels back with
regard to EU-Russian energy dependence.
The goals set forth by the EU with regard to ensuring the union's energy security are
realistic, valid and rational proposals that should serve to strengthen the EU's energy
infrastructure and relative geopolitical position vis-à-vis Russia. Since the Ukrainian crisis
began the EU has gone on to sanction Russia’s oil and banking and defence industries, and
has taken measures to try and ensure sufficient natural gas supplies this coming winter
should there be an artificial shortage. By making use of an emergency energy plan from
2010(mentioned in chapter 4), in case Russia uses its “energy-weapon”, the EU could ban
the quite common practice of reselling liquefied natural gas arriving from Qatar and Nigeria
as well as limiting the use of natural gas for industrial purposes. The EU Member States
have also been stockpiling natural gas in case of a cut-off, but even if every storage facility
were completely filled this would still only account for a small portion of the EU’s annual
consumption.
Bearing in mind the imperfect state of EU energy integration, and the fact that many
efforts at improvement have thus far been frustrated by political and commercial as much as
physical factors, it is worth seriously considering whether the Ukrainian crisis may yet have
the potential to become a turning point in EU energy integration efforts.
That crisis is,
however, still far from over and its further course is inherently unpredictable, just as are the
responses within the EU and in other theatres of Western coordination. Nevertheless, in an
attempt to open up the range of possible outcomes, this thesis will conclude by proposing
381
382
383
BBC, Russia reduces gas exports to Poland, BBC, 11 September, 2014,
http://www.bbc.com/news/world-europe-29154335
European Commission, Banking Union, Europa.eu, 8 July, 2014,
http://ec.europa.eu/internal_market/finances/banking-union/index_en.htm
Hans Hack and Ivana Jemelkova, Can Europe 'copy paste' an energy union? Euractiv, 23 July,
2014, http://www.euractiv.com/sections/energy/can-europe-copy-paste-energy-union-303649
87
two possible contrary scenarios regarding future developments within the EU's energy sector
based upon all the information from the preceding chapters.
The first scenario follows a more neo-realist-inclined approach that predicts a return to the
status quo that existed prior to the Ukrainian crisis. This would mean that despite economic
sanctions and tremendous international pressure, Russia does not relinquish its control over
Crimea and the eastern provinces of Ukraine manage to maintain some level of autonomy
from Kiev if not full independence. As such, this scenario foresees Russia's ability to create
yet another “frozen conflict” within the post-Soviet space, and assumes that the EU will fail
either to influence Russia's actions through sanctions or to use the crisis as a catalyst to
push its own energy integration agenda forward.
The EU’s Member States would then
continue to deal bilaterally with Russia regarding energy matters, and as a result energy
integration would remain a rather distant objective plagued with uncertainty.
As already
argued, this would (further) reduce the EU's international credibility and inward integrity; but it
could also encourage Russia to become even more assertive, further increasing tensions
within the Baltic and eastern Member States of the EU, especially those with large ethnicRussian minorities. Guided by the larger states including Germany, the relations of the EU
as such with Russia would slowly return to “normal” and Ukraine would be left suffering a
similar if not worse fate to that of Georgia in 2008, behind what could start looking very much
like a new Iron Curtain.
Scenario two foresees a completely different development, both within Ukraine as well as
within the EU with regard to its policies vis-à-vis Russia. In that sense it leans more towards
a belief in the eventual triumph of the EU’s constructivist and liberal intergovernmentalist
approach through dialogue, economic pressure and use of international institutions and
support to influence Russia's actions. In this scenario the Ukrainian crisis serves the same
function for the EU’s energy sector as the 2008 financial crash did for the Economic and
Monetary Union: forcing EU leaders to face up to and deal with the project's imperfections
and inequalities, and thus improving the odds on the eventual creation of a banking union
within the EU.
In the energy case, the corresponding process would see Russia's
aggression and unpredictability and its willingness to make use of its “energy-weapon”
serving to unite a rather disunited EU in matters of energy, and indeed of strategic outlook in
general. This would then entail rapid integration within the EU’s energy sector coupled with
extensive diversification and exploitation of Europe’s domestic shale gas resources and/or
nuclear and other renewable energy sources to counter EU dependence on Russian natural
gas. Furthermore, through its aggressive policies in Ukraine, Russia may end up driving
western Ukraine closer to the EU in the middle to long term, and may even end up pushing
other nations of the former Soviet-space - who may fear similar interference by Russia -
88
towards Europe as well. Russia's policies will then have the ultimate effect of undermining
rather than enhancing its influence within the post-Soviet space, making any Russian plans
for a Eurasian Union impossible and ultimately leaving Russia further isolated and weaker
than it was before.
In order to ensure that the second scenario becomes a reality, the EU has a number of
immense challenges ahead, however, due in part to the Ukrainian crisis, its biggest obstacle;
the political division regarding Russia, may be changing in its favour. Policy-makers within
the EU are beginning to realize that things cannot go on as before and the fact that
measures are being taken to try and mitigate the EU's energy dependency does show a
marked change from before. Even the governments of Germany and France are beginning
to question the rationale behind continuing in the same manner towards Russia. However, if
Ukraine is to be a catalyst for EU energy integration, then the EU must seize the opportunity
and react rapidly to deliver a common energy framework with the necessary institutions to
oversee it that are acceptable to all its Member States, before it loses momentum and the
Ukrainian crisis becomes just another frozen conflict.
Further, the EU must support those smaller Member States with the most acute
dependence on Russia for their energy needs whilst also ensuring continued support for
Ukraine. Russia has shown consistently that it will not allow its sovereignty or its insistence
on a sphere of influence to be influenced by its relationship with the EU and this means that
the only way forward for the EU, with regard to its relations with Russia, is to continue
pushing for further energy integration.
The power of liberal intergovernmental and free
market values does the EU little good if it does not have a cohesive and clearly defined
policy within the energy sector, one that prevents international actors such as Russia from
using its energy exports as political weapons and ensures equal fiscal and political
protections for all its Member States. Should the EU manage to get its energy matters in
order it could very well mark a turning point in EU-Russian relations.
89
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