Issue 3, 2014. June-July



Europe's current response to the Ukrainian crisis can be attributed to PAST mistakes in energy policies. The expensive diversification of energy sources might turn out to be a bargain when one considers the costs a country has to incur due to its inability to act in a crisis situation.

Energy Security

A country can lose a lot more than just money if it does not ensure its energy independence and the stability of its energy sources. The painful case of Ukraineshows how dangerous the lack of control over energy policy can be. Unfortunately, Europe's energy strategy in recent years may have been guided too much by the belief that there is no conflict of interest between Russia and the European Union. Now Europe finds itself with its hands tied in the Ukrainian conflict and will find it difficult to solve the problem of overdependence on Russian gas, because there are no cheap alternatives to the current situation. A slow but sure move toward energy security, however, appears to have begun - if the EU can just maintain the political will required for long-term energy strategies.

Just How Much Gas?

The bulk of Europe's energy comes from gas - in 2013, 22 percent of Europe's consumed energy was gas. 30 percent of Europe's gas is provided by Russia. There are some analysts who believe that since Russian gas accounts for just 7 percent of Europe's overall energy consumption, no dependency exists. Ten European countries, however, consume 50 percent of Europe's total Russian gas imports. Plus, gas consumption peaks every winter during the heating season - which makes those particular countries vulnerable to any sudden change in supply from Russia. Europe has already experienced, firsthand, the high cost of its dependency on Russian gas: in 2006 and 2009, Russia temporarily stopped the gas flow in the Ukrainian "Brotherhood" pipeline, effectively undermining Poland's energy supply.

Will the European Union Decrease the Amount of Gas it Imports from Russia?

Some signs certainly point to yes. Since the crisis in Ukraine has begun, Europe has questioned the South Stream pipeline project, which would increase the capacity of Russian gas to reach the European market. On April 17, the European Parliament adopted a non-binding resolution claiming that it "takes the view that the South Stream pipeline should not be built, and that other sources of [gas] supply should be made available." Similar sentiments were also voiced by the UK's Energy and Climate Change Secretary Ed Davey, who commented at the G7 summit: "My discussions with my G7 colleagues have made it clear that we stand together in our resolve to strengthen our energy security and ensure no single power can use control of energy supplies as a weapon in the future." However, not everyone is happy to change course. For example, the South Stream pipeline still has some staunch supporters, for example, countries that do not want to pay more for gas from sources other than Russia, like Bulgaria (which will also receive transit fees from the South Stream pipeline).

Ironically, the diversification of European gas imports could also be in Russia's economic interest since Russia could diversify the importers of its gas - something the country needs, just like Europe needs diverse suppliers. Indeed, Russia signed a deal in May to start exporting gas to China in 2018. The arrangement, rumored to be worth hundreds of billions of dollars, will bring new revenue for Russia from a relatively untapped market.

The Road to Energy Independence

European energy security can come from several sources, but first European politicians have to realize that energy policy is something that requires long-term strategic planning. The energy supply must be immune to political turmoil. The only way to achieve that immunity is ensuring diverse sources of diverse types of energy. For instance, Polish Prime Minister Donald Tusk has proposed to increase the use of coal, an energy resource that has been losing popularity in the the EU. Also, some European countries, notably the UK and Poland, have actively tried to develop their shale gas assets. Europe's invsetment into renewable energy sources and the integration of countries into a flexible international grid are other propositions, albeit very time-consuming and expensive ones. Using Azerbaijani and Kazakh oil and gas could be of pivotal importance and their incorporation into Europe's energy market could be achieved in the relatively short term. However,this is only a good idea if those sources would be independent from Russian influence.

Georgia could play a crucial role in that project by becoming an important transit country. In effect,such a plan would also guarantee Georgia's independence, since it would have a strategic part to play in European energy policy. Finally, there are 22 liquefied natural gas (LNG) terminals in Europe currently, with more under construction in Poland and Croatia. They are capable of importing LNG from as far away as the United States and Qatar and stand ready to do so, if the issues of the shortage of cheap LNG on the market and the limited number of liquefying facilities can be resolved.

Only by implementing several strategies at once - strategies that would facilitate cooperation on the international level between the EU member states and their allies - can the long-term energy security of Europe be guaranteed in the future.