double-degree master in european studies 2011-2013 · energy markets and deal with difficulties in...

Double-degree Master in European Studies 2011-2013

EU Energy Policy vis-à-vis Russia

Presented by Bondarenko Darina Directed by Laure DELCOUR, University Professor and Oskar KOWALEWSKI, University Professor

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Table of contents

INTRODUCTION ..................................................................................................................... 4

1. Achievements of the EU in the area of energy .................................................................. 7

1.1 Achievements of the EU in the field of elaboration of the common energy policy .... 7

1.1.1 Short overview of evolution of energy policies before Lisbon Treaty ................ 7 1.1.2 Changes in energy cooperation between the EU Member States since Lisbon Treaty 10 1.1.3 EU’s initiatives in the field of energy ................................................................ 13

1.2 EU’s achievements in the field of the EU-Russia energy dialogue .......................... 18

1.2.1 The EU-Russia Energy Dialogue ....................................................................... 18 1.2.2 The assessment of developments of EU-Russian energy cooperation............... 21

2. Divergent energy policies of the EU Member States: Case of Poland and Germany...... 25

2.1 Case of Poland ........................................................................................................... 26

2.2 Case of Germany ....................................................................................................... 33

3. Key differences of the EU Member States’ energy policies ............................................ 41

3.1 Bilateral negotiations between the EU Member States’ oil and gas companies and Gazprom ............................................................................................................................... 41

3.2 Pipeline Strategy ....................................................................................................... 48

3.2.1 Nabucco ............................................................................................................. 51 3.2.2 Nord Stream and South Stream.......................................................................... 53

CONCLUSION ........................................................................................................................ 58

BIBLIOGRAPHY .................................................................................................................... 60

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ABSTRACT

The concept of “security of supply” has been evolving over time and received a new signifi-cance since Russia, the European Union’s main energy supplier, suspended gas deliveries to Europe on numerous occasions in 2006 and 2009. This has revealed an extreme dependency of the EU on Russian energy supplies. In order to be able to secure its energy suppliers, the EU’s authorities are struggling to implement a common energy strategy, which would permit the EU to have a coordinated, coherent approach towards Russia, and thus, would allow the EU to be a strong actor on the international energy arena with a great bargaining power and an ability to impose its conditions. In this thesis I demonstrate that the different bilateral strategies of EU countries towards Russia are hindering the establishment of such an ap-proach. Through the examples of divergent external energy policies of Germany and Poland, I stress the lack of coordination and solidarity of the EU Member States in the field of energy policy, and show that the EU still has a long way to go before establishing a common energy policy.

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INTRODUCTION

“We need to launch it as we launched the ECSC in 1951. This project is as vital as the Treaty of Rome or the Single European Act. Because the kings of energy are the Gulf Kingdoms and Vla-dimir Putin. And if Europeans want to be heard, they have no other solution than to form a block”.1

Energy is essential for the economy and the population. It is in fact the energy issue which

brought together different countries of the European continent to later form a unique organi-

zation called European Union. The challenges in the issue of energy have been evolving

throughout the development of this organization, and were composed of a wide range of con-

cerns. Today these challenges are embracing an improvement of energy efficiency to 20% by

2020, further promotion of renewable energies, and an effective internal market of electricity

and gas, etc. [Furfari, 2007: 25] However, among all of these issues, the central objective of

energy policy has traditionally been that of ensuring adequate supplies of energy resources.

The issue of energy is all the more important for the EU as its energy resources are poor and

it is very dependent on energy supplies. Indeed, the EU is the largest world importer of ener-

gy. According to the data of European Commission, the dependency of the EU on oil imports

reached 83.5 %, and 64.2% in gas imports in 2009, while the EU energy production dropped

by 13% over the last 20 years, mostly because of reduction in coal and other solid fuels pro-

duction.2 As a result, the significance of security of energy supply for the EU is very high. On

October 16, 2006 during the inauguration of gas pipeline Langeled,3 Prime Minister Tony

Blair highlighted this reality by stating that the security of energy supply will be as important

for his country as defense [Furfari, 2007: 6].

1Jacques Delors about European energy community in : Derdevet M. (2012). L’énergie dans le traité de Lis-bonne : un premier pas vers une communauté européenne de l’énergie ?, in : A. Racchah (eds.), Le traité de Lisbonne. De nouvelles compétences pour l’Union européenne ?, L’Harmattan, Paris, p.173. 2European Commission (2011). Key figures, Directorate General for Energy, accessed 8 August 2013, [http://ec.europa.eu/energy/observatory/countries/doc/key_figures.pdf].

31200 km–long Langeled is the longest pipeline in the world bringing the gas from Nyhamna in the north of Norway till Eastington and which is supplying Great-Britain with about 20% of its demand.

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Since most of the EU Member States’ economies rely on fossil fuels, the EU has to secure its

energy supplies from external producers. If the concept of “energy security” used to be sum-

marized as the acquiring of sufficient suppliers at an adequate price, today it takes on an addi-

tional significance. It was described in European Commission’s Communication as the ability

to ensure that future essential energy needs be met, both by means of adequate domestic re-

sources used under economically acceptable conditions or maintained as strategic reserves,

and by calling upon accessible and stable external sources supplemented where appropriate

by strategic stocks”.4

The external sources of energy for the EU include numerous supplier countries. However, the

primary country of its supply is Russia in terms of gas and oil: 34% of imports of its gas and

33 % of its oil in 2009.5 Therefore, good relations between Russia and the EU are even more

important in light of the interdependence of both powers in the energy sector, especially as

the energy resources of the EU are exhausting very quickly and those of Russia are still huge.

Consequently, the EU, as a consumer country, needs Russian gas and oil, and Russia, as a

supplier country, needs the EU to buy its energy products for prices which are much higher

than those fixed on the Russian market.

Hence, EU cooperation with Russia in the field of energy represents an essential point for

ensuring the security of energy supplies and thus, constitutes an important issue in the elabo-

ration of the common EU energy policy.

There are currently several documents on the EU level which are fixing common objectives

and priorities of the EU in the field of energy, including the field of external energy policy.

There are also several action plans, directives and regulations dealing with this issue. Howev-

er, there are still many disagreements between the EU Member States regarding different

aspects of the common EU energy policy, and specifically regarding a strategy to adopt to-

4 European Commission (2011). On security of energy supply and international cooperation - "The EU Energy Policy: Engaging with Partners beyond Our Borders", Commission Staff Working Document SEC (2011) 1022 final, last accessed 6 July 2013, [http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2011:1022:FIN:EN:PDF].

5 European Commission (2011). Key figures, Directorate General for Energy, last accessed 8 August 2013, [http://ec.europa.eu/energy/observatory/countries/doc/key_figures.pdf].

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wards Russia. Consequently, the degree of cooperation of the EU Member States with Russia

is also very different.

The goal of this thesis is to identify and to analyze the achievements of the EU in relation to

its common energy strategy towards Russia and its limits. First, through an analysis of nu-

merous existing documents regulating the EU-Russian cooperation, it will demonstrate an

analysis of EU achievements in its energy dialogue with Russia. Second, it will study con-

crete examples within the energy policies of Germany and Poland, with a specific focus on

their energy policy strategies towards Russia. Finally, through the various bilateral negotia-

tions between the EU Member States and Russia, and different pipeline strategies, it will out-

line the limits in the common EU approach to the cooperation with Russia in the field of en-

ergy.

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1. Achievements of the EU in the area of energy

Energy policy of the EU has known a great evolution since the beginnings of the construction

of today’s European Union. This development reveals the importance of this policy for EU

construction through the years and explains the EU achievements in this field that one can

observe today. The energy policy towards Russia, the first oil and gas supplier of the EU, is

also constantly evolving. First, I will explicit the major achievements of the EU in the elabo-

ration of its common energy strategy through the history of the EU energy policy and the

changes in the European treaties and secondary legislation regarding energy issues. Second, I

will speak about its achievements in its energy dialogue with Russia until now with a critical

approach.

1.1 Achievements of the EU in the field of elaboration of the common energy policy

1.1.1 Short overview of evolution of energy policies before Lisbon Treaty Energy with steel was one of the pillars of the ECSC6, the forefather of the EU. So, these two

fields became the first ones for which the countries making part of the European Union aban-

doned their national sovereignty and so launched supranational Europe. However, the nature

of ECSC was exclusively economic and aiming at prevention of war and rational use of na-

tional resources. In 1956, Paul-Henri Spaak, president of intergovernmental committee in

charge of drawing-up of two Rome treaties, justified the European solidarity in the energy

sector by saying following words: “It is in the hands of European states to make the supply

on energy, slow down the development of production or to make its fundamental action for a

common growth” [Derdevet, 2012: 155]. Indeed, the energy question brought a common

growth in European states after the Second World War with the signature of ECSC. In the

frame of a difficult political and economic situation, the energy question became a way to put

an end to the crisis.

At that time the EU’s competence on energy issues had been studied by the European Court

of Justice (ECJ) in the case of Campus Oil Limited and Others vs. Minister for Industry and

6 European Coal and Steel Community is the international organization launched with the signature of Treaty of Paris in 1951. It was made up of 6 European countries: France, Germany, Italy, Luxembourg and the Nether-lands. Its goal was to let coal and steel free circulate and to make possible a free access to sources of produc-tion. There was also introduced High Authority (today it is the European Commission) which was controlling the market, respect for competition rules and price transparency.

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Energy and others. The ECJ entitled Member States to take extra measure at national level on

the energy issues even when the community decrees. Furthermore, these competences were

strengthened by various provisions of the European Community Treaty of 1957, in particular

Articles 95 and 100 which entitled the EU to take measures in order to harmonize internal

energy markets and deal with difficulties in case of shortage of supply of certain products

[Arinaitwe, 2013: 4].

In 1954, after the failure of the European Defense Community (EDC), the European Econom-

ic Community (EEC) and the European Atomic Energy Community (EURATOM) re-

launched the European project.7 Indeed, Euratom has permitted pooling of all EU Member

States’ researches, in order to develop the civil atom, facilitate the supply of future power

stations, and fight against proliferation. In this way, Euratom was not only of economic, but

also of social and geopolitical character and was of high importance. However, the sectorial

character of the latter and its development in the shadow of EEC Treaty strongly hindered the

development of global energy policies [Derdevet, 2012: 170-175].

In fact, the field of civic atomic energy benefited of strong interest of the population. The

initiators of this treaty hoped to take advantage of this enthusiasm and to manage to have a

success with this European project [Derdevet, 2012: 156]. However, neither the ECSC nor

the Euratom did meet much enthusiasm of the population. Already in 1960’s the ECSC lost

its influence because of competitive American coal and replacement of coal by oil for numer-

ous utilizations. The implementation of the Euratom was quickly stopped in some countries,

such as France, mostly for the reason of political sovereignty [Derdevet, 2012: 157]. There-

fore, the energy questions were regulated on the basis of the treaty establishing the EEC, even

if it did not contain any legal foundations.

During the 1960’s the European Commission has been suggesting many times to the Council

to organize coordination of energy policies in order to prevent societal changes such as sub-

stitution of oil by coal or growing dependence of European countries vis-à-vis energy from

fossil sources [Derdevet, 2012: 157]. However, this did not lead to the real coordination. It is

in the moment of petrol crisis in 1973 that the lack of coordination led to the disastrous con-

7 Euratom is an integrated regional organization in the area of nuclear industry, namely the development of civil nuclear energy, which is regulating nuclear cooperation between Europe and third countries. It still exists today and appears in some agreements or partnerships between the EU and countries such as Japan, India, Iran, etc.

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sequences. Then, in 1974 directives 73/338/CEE and 72/425/CEE were adopted, which intro-

duced regulation of national actions in case of oil shortage. Besides, the Council regulation

(CEE) n° 1056/72 and (CEE) n° 1215/76 implied an obligation for all EU Member States to

inform the Commission about energy investment projects of community interest in oil and

gas areas.8 So, these texts adopted in emergency had only preventive character and did not

result in better coordination of energy policies and each country still was acting on its own.

So, France began developing the nuclear power programme, while Great Britain started to

exploit the fields in the North Sea. In this way, the end of 1970’s and the beginning of 1980’s

were marked by the common problems faced by European countries and the lack of will of

these countries to find a common European energy approach [Derdevet, 2012: 158]. Further-

more, the so long awaited Single European Act9 failed to introduce legal texts for energy co-

ordination.

In 1988, after 3 oil crises, the European Commission reminded again the necessity to coordi-

nate energy policies. According to its communication, the achievement of a big European

energy market would allow a GDP growth of 0.5% per year, as well as the strengthening of

solidarity and security of supply of the EU Member States.10 This resulted in introduction of

two texts with modest consequences, but with symbolic meaning, relative to the international

electricity transit and abolition of import and export monopoles [Derdevet, 2012: 158]. The

Treaty of Maastricht recognized the explicit competence of the EC to take “measures in the

areas of energy, civil protection and tourism”11. Moreover, the EC received the competence

to contribute to the “encouragement for the establishment and development of trans-European

networks”12. However, the most important change was introduced with the article 129B

which stipulated that "action by the Community shall aim at promoting the interconnection

and interoperability of national networks as well as access to such networks".

In 1996 and 1998 there was limited opening of electricity and gas market, but not all EU

Member States were enthusiastic about it [Derdevet, 2012: 160]. In this way, the changes in

Treaty conducted changes in market functioning, but not in EC Member States competences.

From this moment, there were several attempts to introduce common energy policy, but they 8 These texts have merged in one sole regulation in 1997. 9 The Treaty of EU signed in 1986 10European Commission (2013). Internal Energy Market, last accessed 19 July 2013, [http://www.europarl.europa.eu/ftu/pdf/en/FTU_4.13.2.pdf].

11 Art.3 t) of TEC 12 Art.3 n) of TEC

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were not successful and neither the Amsterdam Treaty nor the Nice Treaty did comprise en-

ergy chapters [Derdevet, 2012: 163-166].13

So, there was still no judicial basis allowing the EU to legislate on energy. However, the EU

was shaping its energy sector through its competencies regarding the internal market, compe-

tition policy and the environment, through Gas and Electricity Directives and interpretations

in the light of the objective stipulated on the Article 3 u) of TEC.

1.1.2 Changes in energy cooperation between the EU Member States since Lisbon Treaty

The Lisbon Treaty entered into force on December 1st, 2009 after its ratification by 27 Mem-

ber States and replaced the previous Maastricht Treaty. It has considerably changed the work-

ings of the EU in different areas, including energy. Indeed, the Treaty on the Functioning of

the European Union (TFUE) introduced a separate chapter on energy, which became from

this moment a new area of the EU shared competences14. This means that the EU Member

States can adopt legislation only in case if the Union has not exercised its competence and if

it is not contradicting European law and principles.15 In this way, the EU is obtaining an op-

portunity to develop its energy policy and till the moment it is fulfilling its competences, EC

Member States cannot intervene.

Besides, the Article 194 of TFEU assigns to the energy policy four objectives leading its de-

velopment:

“(a) ensure the functioning of the energy market;

(b) ensure security of energy supply in the Union;

(c) promote energy efficiency and energy savings and the development of

new and renewable forms of energy;

(d) promote the interconnection of energy networks.”

14Art. 4.1.TEC: The Union shall share competence with the Member States where the Treaties confer on it a competence which does not relate to the are as referred to in Articles 3 and 6. Art. 4.2. Shared competence be-tween the Union and the Member States applies in the following principal areas: (a) internal market; (b) social policy, for the aspects defined in this Treaty; (c) economic, social and territorial cohesion; (d) agriculture and fisheries, excluding the conservation of marine biological resources; (e) environment; (f) consumer protection; (g) transport; (h) trans-European networks; (i) energy; (j) area of freedom, security and justice; (k) common safety concerns in public health matters, for the aspects defined in this Treaty. 15Art. 2.2 of the Treaty on the Functioning of European Union.

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In this way, Article 194 of TFUE is introducing judicial basis that will guide the Commission

in its proposals of sectorial measures in the area of energy. Art.194§2 is stipulating that the

adoption of binding provisions in energy field requires ordinary legislative procedure, which

means that after the proposal of European Commission, the European Parliament and the

Council, approving by qualified majority, are adopting provisions after consultation of the

Economic and Social Committee and the Committee of the Regions. So, it was introduced the

qualified-majority voting in Council to encourage adoption of secondary EU legislation.

However, the §3 introduces the exception to the §2: “By way of derogation from paragraph 2,

the Council, acting in accordance with a special legislative procedure, shall unanimously and

after consulting the European Parliament, establish the measures referred to therein when

they are primarily of a fiscal nature”. In this way, this paragraph makes possible avoiding of

ordinary legislative procedure in exceptional cases, limiting in this way a room for manoeu-

vre to the EU in the field of fiscal nature of energy issues.

Moreover, other articles were introduced to the TFUE comprising measures in the field of

energy. For example, the Article 122 of the TFEU under the Title on Economic and Monetary

Policy allowing the Council to decree appropriate measures in solidarity with EU Member

States coping with severe difficulties in the supply of certain products, especially in the area

of energy infrastructure. There are also Articles 170§1, 170§2 and 173 dealing with trans-

European networks. The Treaty establishing the European Community already addressed this

issue in its Art. 154 and 156. Both treaties are stressing that the EU has to contribute to the

establishment and development of trans-European networks in the fields of energy infrastruc-

tures and to favor interconnection and interoperability of national networks, as well as access

to these networks. However, the Art.171 of TFUE is additionally stipulating that the EU must

fix orientations identifying common projects in this field that it could support in partnership

with the EU Member States and can take measures aiming at the harmonization of technical

standards.

So, thanks to the changes in the EU legislation, namely in the TFUE, mentioned above, the

energy policy has had a great impulse to its development. Moreover, the recognition of the

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EU competence in internal level of energy policy implicitly led its competence in the external

field, in application of AETR jurisprudence of 1971 [Derdevet, 2012: 169]. 16

However, Art. 194§2 introduces the limits to the EC’s competences in the area of energy,

prohibiting the EC to take measures that would affect the ‘Member States’ right to determine

the conditions for exploiting its energy resources, Member States’ choice between different

energy sources and the general structure of a member state’s energy supply”. If two latter

conditions were already set in Maastricht Treaty, the first one, relative to the right of EU

Member States to fix conditions for exploiting their energy resources, was introduced with

the Lisbon Treaty. Nevertheless, there is a restriction on this condition stipulated in the Art.

192§2 of the environmental chapter of the TFEU stating that by way of derogation the Coun-

cil shall act unanimously in accordance with a special legislative procedure and after consult-

ing the European Parliament, the Economic and Social Committee and the Committee of the

Regions if environmental policy measures are “significantly affecting a Member State's

choice between different energy sources and the general structure of its energy supply” and

‘provisions primarily of a fiscal nature”. Hence, the measures of the EU relative to the choice

between energy sources could be adopted by the ordinary legislative procedure under Art.

192§1 of TFUE under mentioned conditions, but could not be taken under Art. 194 §2. So,

the environmental provision refers to the energy chapter and vice versa, which shows the

close interdependence of these two policies.

So, from one side, with the Treaty of Lisbon one can see that the energy policy of the EU

were given more weight trough introduction of a chapter for energy and other new provi-

sions. From another side, one can see that some conditions fixed in these articles strongly

restrict the room of action of the EU Member States. However, they are still possibilities to

by-pass some of these articles by resorting to another one, such as the Art. 192§1 if the meas-

ure is affecting the environment.

16This judgment puts the fundament to the existence of implicit competence of the Community to act in the in-ternational arena since it exercised its internal competences: “Each time the community, with a view to imple-menting a common policy envisaged by the treaty, adopts provisions laying down common rules, whatever form they may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules or alter their scope”.

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1.1.3 EU’s initiatives in the field of energy

The introduction of new chapter in the TFUE devoted to the energy has once again proven

the growing significance of energy policy for the EU in last years. However, the state of art in

international politics does not cease to evolve and there is a constant need to adjust the energy

policy of the EU to the current situation. Given that it is extremely difficult to change the

Treaty in response to different events in international politics, the EU needs secondary

sources of legislation in the field of energy, such as directives or action plans which permit to

ensure security of supply, energy market integration and development of renewable energy.

Therefore apart of changes in the Lisbon Treaty introduced in 2009, EU is regularly launch-

ing numerous initiatives in this field concerning different aspects of energy policy to stay a

strong actor on the international stage. Indeed, they do not require too long time to be adopted

and make the EU more reactive.

Indeed, these initiatives are numerous and dealing with different energy issues. Since the end

of 1990’s and beginning of 2000’s the issue of security of energy supplies has begun to gain

in importance within the current European debates. Numerous initiatives taken by European

authorities to achieve security of energy supplies have revealed growing importance of this

issue. Here below I will focus on some essential measures that the EU has taken in order to

deal with supply crises and to ensure its energy security.

In fact, there were discussions between NATO, IAE and the EU on diversification of supplier

countries to avoid situations of monopoly already in 1980’s [Furfari, 2007: 13]. Later, Euro-

pean Commission adopted Green Paper 2000 “Towards a European strategy for the security

of energy supply"” which relaunched energy debates and outlined such issues as structural

weaknesses of the EU in energy supply and its geopolitical, social and environmental vulner-

ability, notably regarding European commitment in the framework of Kyoto Protocol, or is-

sue on safety of facilities. It is also dealing with eventual solutions to the energy shortage,

recommending diversifying of energy mixes using different kinds of energy with a predomi-

nant share of renewable one. Moreover, it is proposing to multiply the EU energy routes, by

building new ones to avoid problems with transit countries and monopolies. Finally, it is rec-

ommending finding new suppliers others than Russia, Norway or Algeria [Furfari, 2007: 15].

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In view of increase in prices for crude oil during a too long period, the necessity to relaunch

debates on nuclear power and growing awareness of the need to diversify the supplies, a sec-

ond Green Paper was published by European Commission in 2006 called "A European Strat-

egy for Sustainable, Competitive and Secure Energy". It fixed three objectives of the Europe-

an energy policy, which are following [Furfari, 2007: 19-21]:

- Supply security coping with increased dependency of the EU towards its imports;

- Competitiveness ensuring that the advantages linked to the energy market-opening

benefits all consumers;

- Sustainable development encouraging renewable, competitive and low-carbon ener-

gies, as well as better energy efficiency.

To achieve these objectives, this paper is fixing 6 priorities, including coherent external ener-

gy policy for the EU. The Commission affirmed that energy security can be achieved through

“EU extending its own energy markets to include its neighbors within a common regulatory

area with shared trade, transit and environmental rules.”17 This Paper has also resulted in

elaboration of a new European strategy adopted by the European Commission in 2007, which

was explaining the importance of elaboration of “European energy policy” and was fixing

strategic objective of energy policy with an extensive action plan comprising many various

points.18 Furthermore, after the coming into force of Lisbon Treaty, the EU Commission

Communication “On the security of energy supply and international cooperation- EU energy

policy: engaging with partners beyond our borders” was adopted.19 Its primary objective was

the establishment of the framework for reinforcing external relations and collaboration in the

areas of competition, safety, network access and security of supply.20

17European Commission (2006). An External Policy to Serve Europe’s Energy Interests, Paper from Commis-sion/SG/HR for the European Council, last accessed 18 July 2013, [http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressdata/EN/reports/90082.pdf].

18Objective of reduction of greenhouse gas emissions by at least 20% by 2020 and by 50% by 2050 as compared to 1990 levels; the objective for international post-Kyoto negotiations is reduction of 30% of greenhouse emis-sions by 2020.

19European Commission (2011). On security of energy supply and international cooperation - "The EU Energy Policy: Engaging with Partners beyond Our Borders", Commission Staff Working Document SEC (2011) 1022 final, last accessed 6 July 2013, [http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2011:1022:FIN:EN:PDF].

20European Parliament (2013). Energy Policy: General Principles, last accessed 8 July 2013, [http://www.europarl.europa.eu/ftu/pdf/en/FTU_4.13.1.pdf].

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All these European Commission’s initiatives fix objectives, priorities of the EU common en-

ergy strategy and recommending eventual common strategies to the EU Member States to

ensure security of their energy supplies. Apart from these documents, the debates on security

of energy supplies have been translated into concrete regulations and directives. Several of

these measures are mentioned below.

In 2004 the Council of EU has adopted the Gas Security of Supply directive 2004/67/EC aim-

ing at guaranteeing the security of natural gas supply. However, after the second natural gas

crisis in 2009, Brussels judged it as inappropriate to deal with supply disruptions and a Regu-

lation on Security of Gas Supply was voted in 2010. According to this regulation, the EU

Member States must choose a competent authority in charge of security of gas supply at na-

tional level and thus, to guarantee “that by 2014 in case of a disruption of the largest gas sup-

ply infrastructure the capacity of the remaining infrastructure, is able, to satisfy total gas de-

mand of the calculated area during a day of exceptionally high gas demand occurring with a

statistical probability of once in 20 years.” [Bill Cash’s European Journal, 2010]. Among

their numerous tasks, these authorities have to establish preventive action plans and emergen-

cy plans comprising the measures to reduce identified risks and to diminish the consequences

of natural gas supply disruptions after approval of European Commission. They also repre-

sent the sources of information for European Commission reporting on situation in the coun-

try where they are situated.

These competent authorities are regulated by the Gas Coordination Group. This group was

also established in 2006 through the Gas Security of Supply directive (2004/67/EC) in order

to control natural gas supply at the EU level. After the natural gas supplies’ disruptions in

Europe in 2009 it also became obvious that the body responsible for guaranteeing gas sup-

plies, which is the Gas Coordination Group, needed to be reformed. Therefore the Regulation

994/2010 comprised a more coordinated approach of Gas Coordination Group in security of

energy supply at European level encouraging closer cooperation between EU Member States.

This group is composed of the EU Member States' competent authorities for security of sup-

ply, industry representatives (Eurogas, OGP, etc.), representatives of consumer associations

and other European organizations of the gas sector under the chairmanship of European

Commission. In this way, each side involved in natural gas supply chain can express its opin-

ion within this group. The objective prescribed to this group is to “to facilitate the coordina-

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tion of security of supply measures at Community level, improving preparedness of the EU

and EnCT countries with regards to supply disruptions and to examine and assist its Member

States in coordinating the measures taken at national level during a crisis”.21 To achieve this

objective, the members of this group are regularly organizing meetings, where they are dis-

cussing possible measures to guarantee security of gas supply to the EU, drafting Preventive

Action Plans and Emergency Plans. In this way, this Group is regularly informing and con-

sulting European Commission in the field of natural gas supply, which permits to find the

most optimal solutions on the EU level.

Moreover, the European Commission has been given through this directive extensive coordi-

nation powers during crises. The Commission is empowered to regulate actions between the

EU Member States and towards third countries and to guarantee exchange of information. It

can also demand competent authorities or natural gas organizations to modify their action if it

is considered inadequate to deal with EU or regional emergency or if it can deteriorate situa-

tion in another EU Member State. Besides, the regulation forbids the EU Member States to

take any measures limiting the flow of gas within the EU, during a crisis. It falls to the Com-

mission to supervise the gas flows within and outside the EU through EU task force, with

assistance of the supplying and transiting countries [Bill Cash’s European Journal, 2010].

Finally, the regulation has introduced changes regarding information that the EU Member

States must transmit to the European Commission: this regulation requires that the EU Mem-

ber States inform European Commission about all intergovernmental gas supply agreements

with third countries related to the security of gas supply and that gas companies report to the

Commission on their contracts with suppliers from third countries. In this way, one can de-

duce that European Commission has been given considerable powers in the area of security

of supply of gas, which could be certainly explained by the previous gas supplies’ crises.

Another very important document for the EU energy policy was signed on the 3d March 2011

- the Third Energy Package for gas and electricity markets - which represents a legislative

package aiming at establishment of European competitive internal energy market. 22 The reg-

ulations and directives that make part of this package decree separation of operation of elec-

tricity and gas transmission activities from supply and production activities of vertically inte-

21European Commission (2011). Commission Decision 2011/C 236/09, last accessed 16 July 2013, [http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32011D0812%2801%29:EN:NOT].

22European Commission (2013). Internal Energy Market, last accessed 19 July 2013, [http://www.europarl.europa.eu/ftu/pdf/en/FTU_4.13.2.pdf].

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grated energy companies.23 This would open the electricity and gas market for all suppliers

regardless the size of their companies and thus, would permit European consumers to choose

between different companies supplying gas and electricity. In this way, this package is guar-

anteeing equal access for oil and gas companies to infrastructure in the EU. Moreover, apart

from numerous advantages of the market liberalization guaranteed by this document, Europe-

an Commission as well as the Council highlighted that it would permit the EU Member States

to ensure energy supplie [McGowan, 2008: 33]. Given that European Commission and most

of the EU Member States consider that open energy markets represent a precondition for the

pursuit of other energy policy objectives, this document has a capital importance for the EU

energy policy [McGowan, 2008:33].

In the frame of this package it was established an Agency for the Cooperation of Energy

Regulators (ACER) which seats in Ljubljana, the capital of Republic of Slovenia. In fact, the

importance of achievement of internal markets in electricity and natural gas was put forward

already in the communication of European Commission entitled "An Energy Policy for Eu-

rope " of 10 January 2007.24 To reach this goal, the regulatory framework at EU level has to

be ameliorated and the creation of this agency addressed this need. Its mission is to support

National Regulatory Authorities in performing the regulatory tasks at EU level that they ex-

ercise in the EU Member States and to coordinate their action. In this way, through harmoni-

sation of regulatory frameworks, it seeks to accomplish the internal energy market for elec-

tricity and natural gas. Among the progresses reached by ACER count the possibly that was

given to consumers to change suppliers for gas and electricity, and an obligation for suppliers

to present explanations of terms and conditions. However, there are still the tasks which

should be accomplished through this agency. They comprise further harmonisation of nation-

al market and network operation regulations for gas and electricity as well as facilitation of

cross-border investment in energy infrastructure.

Here above I have concentrated on EU initiatives taken in the field of gas security supply.

However, the EU is also regularly taking measures regarding two other policy pillars of the

current EU energy policy which are internal energy market and sustainable energy produc-

23See: European Commission (2012). Third package for Electricity & Gas markets, last accessed 19 July 2013, [http://goo.gl/OSDX5]. 24EurLex Official Journal (2008). Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators, last accessed 20 July 2013, [ http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:211:0001:01:EN:HTML].

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tion. These are numerous European strategic plans, communications, etc. in the field of ener-

gy.

1.2 EU’s achievements in the field of the EU-Russia energy dialogue

The external dimension of the common EU energy policy has a crucial importance, in partic-

ular today with advent of numerous problems going beyond the EU level. For example, envi-

ronmental problems, globalisation of energy markets, exhaustion of natural resources, etc.

The common EU external energy strategy would permit the EU to form one sole entity in its

negotiations with third countries.

One of the countries neighboring the EU and traditionally supplying the EU with energy re-

sources is Russia. In fact, the history of trading relations in the oil sector between the EU and

Russia dated back over 150 years, while Russia has been importing its gas by pipeline to

Austria since 1968 [Cleutinx, Piper, 2008: 26 ]. Given that the exchanges between the EU

and Russia in the field of are long-established, numerous and occurring on regular basis, a

special framework needed to be established. Indeed, several organizations were constituted in

order to bring together politicians of the EU and Russia and provide them opportunity to dis-

cuss energy-related issues and to formulate solutions agreeable to both sides. Below, I will

give an example of some the most important initiatives, which were put in place in recent

years and specify their concrete achievements.

1.2.1 The EU-Russia Energy Dialogue EU-Russia energy dialogue was launched at the 6th EU-Russia Summit in Paris in October

200025. It is both the first real EU strategic energy policy dialogue launched with an external

energy partner and the first sectorial dialogue with Russia, which stresses once more the high

importance of this issue for the EU in its external relations with Russia [Cluetinx, Piper,

2008: 25].26 The goal of the EU-Russia Energy Dialogue was to have structured cooperation

in the field of energy between the EU and Russia bringing about reliability and security of

25European Commission (2011). EU-Russia energy Dialogue, last accessed 15 July 2013, [http://ec.europa.eu/energy/publications/doc/2011_eu-russia_energy_relations.pdf].

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energy relations in the long term and ensuring confidence and transparency on both sides.27

This would permit to create an energy community between these two powers.

This dialogue is led by Günther Oettinger, Commissioner for Energy, and Sergey Shmatko,

Russian Energy Minister. Political steering takes place in the Permanent Partnership Council

(PPC) on energy, which comprises the European Commissioner for Energy, current and in-

coming EU Presidency and Russian Minister for Energy. It includes four thematic groups

dealing with everyday activity of the dialogue and composed of representative of EU Mem-

ber States, Russian government, industries from the EU and Russia and representative of Eu-

ropean Commission. 28

Since its establishment, this dialogue was developing and shaping cooperation between Rus-

sia and the EU in the field of energy. During the 10th Anniversary of the EU-Russian Energy

Dialogue on 22 November 2010 in Brussels Paul Magnette, Belgian Minister for Climate and

Energy, outlined the importance of this dialogue and declared that energy represents the most

important element of EU-Russian relationships and that “this Dialogue is a necessity based

on pragmatic and equitable principle of security of supply and security of demand”29. Chris-

tian Cleutunx and Jeffery Piper [Cleutunx, Piper, 2013: 24-26] are explaining in their arti-

cle”The EU-Russia Energy Dialogue”, that this dialogue is pragmatic, it does not implies big

political declarations and is using a bottom-up approach, consisting in tracking of issues of

high importance and search for their solving. Indeed, this dialogue has resulted in some major

achievements.

First, in the frame of the EU-Russia Energy Dialogue it was established the EU-Russia Early

Warning Mechanism in November 2009. The creation of this mechanism could be partly ex-

plained by the supply crises that occurred in 2006 and the will of both sides to avoid these

kinds of situations. In fact, the Russian-Ukrainian crisis of 2006 turned out to 4-days gas dis-

ruptions in Europe, which raised concerns of the EU about the security of supplies. The EU-

Russia Early Warning Mechanism was aiming at avoiding in the future eventual disruptions

of energy supplies. It was prescribing a procedure to follow by both partners in case of an 27European Commission (2011). EU-Russia energy Dialogue, last accessed 15 July 2013, [http://ec.europa.eu/energy/publications/doc/2011_eu-russia_energy_relations.pdf].



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important disruption or physical interruption of supply energy from the Russian Federation to

the European Union. In fact, both sides have to evaluate the situation and prepare recommen-

dations. If the situation is more complicated and these assessments are not enough, the Expert

Working Group on the Early Warning Mechanism, consisting of the EU and Russian repre-

sentatives, is organizing a consultancy. Besides, this Mechanism also foresees setting up of a

Monitoring Group, which appraises the circumstances and stored them. 30 In this way, thanks

to this mechanism, the supply problems may be identified in advance and the impact of dis-

ruptions may be diminished.

This dialogue also resulted in the creation of several institutions tackling different aspects of

EU-Russian energy cooperation. For example, the EU-Russia Energy Technology Centre in

Moscow was established in 2002. The Centre was created to strengthen cooperation in ad-

vanced energy technologies, to foster industrial partnerships and to ease investments in pri-

ority projects. Indeed, the Centre has proven very effective in promoting cross-border in-

vestments [Cleutinx, Piper, 2008: 68].

Furthermore, a Gas Advisory Council composed of representatives of leading EU and Rus-

sian gas companies and of experts from Russian and European academic research organisa-

tions has been created. It assesses the development of the gas markets and provides recom-

mendations for the long-term EU-Russia gas cooperation.

Another major advantage of this dialogue is the opportunity that was given to the EU and

Russian authorities and experts to exchange legislative experiences and know-how in the en-

ergy field. In this way, the EU could communicate its best practices of establishment of ad-

ministrative system which resulted in adoption of Russian energy efficiency law in 2009.31

In addition, a number of joint projects in the field of energy have been established. The ex-

amples illustrating this mutual activity could be the “Energy Bridges” project, those aim is to

30See: European Commission, Early Warning Mechanism, last accessed 20 July 2013, [http://ec.europa.eu/energy/international/russia/dialogue/warning_en.htm].


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fill the gap between different management practices in Kaliningrad, Lithuania and Italy or the

“EastWind” project, whose goal is to promote wind energy use in Russian Federation.32

The achievements mentioned above realized jointly by Russia and the EU in the field of en-

ergy can be completed by numerous others. So, one can see that this dialogue is strongly con-

tributing to the intensification of relations between the two powers in the field of energy. This

dialogue is constantly evolving, comprising a growing number of joint action, plans, etc. For

instance, there was recently signed a new upgraded version of the EU-Russian Early Warning

Mechanisms on 24 February 2011 by Commissioner Günther Oettinger and Russian Energy

Minister Sergey Shmatko, which is amending the previous mechanism in light of new events

in the world of international politics, in particular the new gas crisis between Russia and the

EU that occurred in 2009.

1.2.2 The assessment of developments of EU-Russian energy cooperation A recent huge achievement of the EU-Russian Energy Dialogue was the signature in March

2013 by both sides of the Roadmap of the EU-Russia Energy Cooperation until 2050. Its

preparation lasted numerous years in the frame of the Energy Dialogue between the EU and

Russia. The negotiations on the Roadmap on EU-Russia Energy cooperation until 2050 were

launched in 2011 between Günter Oettinger and Sergei Shmatko. It was finally signed by the

EU and Russia on March 2013 and was recognized to represent the generalized Terms of

Reference for the future EU-Russia Energy Dialogue

This roadmap is stating that by 2020 Russia and the EU will take part in large gas infrastruc-

ture projects recognized by two sides as projects of mutual interest [Simonet, 2012: 230].33

By 2030 they should harmonize market regulation and by 2050 remove all barriers in the oil

industry. Finally the year 2050 is designated to be the year by which “the EU and Russia

should be part of a common, subcontinent wide, energy market contributing to the moderni-

zation of both economies”.34 The main objectives of energy cooperation between the EU and

Russia stipulated in this roadmap are guaranteeing of the energy security of both markets and

32 European Commission (2011). EU-Russia energy Dialogue, last accessed 15 July 2013, [http://ec.europa.eu/energy/publications/doc/2011_eu-russia_energy_relations.pdf].

33A a certain number of infrastructures of transport, such as gas pipeline Yamal-Europe crossing Belarus and Poland, the Russian transmission system Druzhba passing through Belarus and Ukraine and Nord-European gas pipeline Nord-Stream are already recognized of “common interest” thanks to the Energy Dialogue between Russia and the EU.

34European Commission (2013). Roadmap EU-Russia Energy Cooperation until 2050, p.5, last accessed 20 July 2013, [http://ec.europa.eu/energy/international/russia/doc/2013_03_eu_russia_roadmap_2050_signed.pdf].

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strengthening of positions of both sides on the global energy market. Besides, it is stating a

strategic target to be achieved by 2050 which is a Pan-European Energy Space with a func-

tioning integrated network infrastructure, with open, transparent, efficient and competitive

markets, making the necessary contribution to ensuring energy security and reaching the sus-

tainable development goals of Russia and the EU.35 To reach this goal the both sides will

progressively approximate their rules, standards and markets in the field of energy. Moreo-

ver, this Roadmap obliges the EU to inform Russia about any changes in demand for natural

gas or measures to reduce the use of hydrocarbons.

In fact, the Roadmap of the EU-Russia Energy Cooperation until 2050 permits to consider in

concrete terms the future of the EU-Russian relationships in the field of energy. Through an

analysis of different scenarios and their consequences for various energy carriers including

gas, oil, electricity, nuclear and renewable resources, this roadmap makes approximate short,

middle- and long-term prospects on the future of the EU-Russian relations. 36 This allows to

conceive the strategy of the EU-Russian relations already today and to avoid problems with

supply or demand in the future. This document is again providing another framework for the

EU-Russian relationships.

So, one could see that the cooperation between the EU and Russia in the field of energy is

very intensive and concerns different aspects, such as prevention of emergency situations

resulting in disruptions of energy supply or negotiation of prices for energy supplies. There

are various platforms for dialogue and several legal documents which were established be-

tween the two partners, which highlight the importance of cooperation in the energy field for

both sides. They are all aiming at improving relationships between the EU and Russia in the

field of energy. In this way, through this dialogue energy could become a means of integra-

tion.

However, the dialogue between the EU and Russia was not always fruitful and did not always

lead to consensus between the two powers. This is illustrated by the case of the Energy Char-

ter Treaty of 1994 which aimed at guaranteeing free circulation of energy supply in new Eu-

35 European Commission (2013). Roadmap EU-Russia Energy Cooperation until 2050, p.5, last accessed 20 July 2013, [http://ec.europa.eu/energy/international/russia/doc/2013_03_eu_russia_roadmap_2050_signed.pdf].

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rope after the fall of Soviet Union. This Treaty represents a judicial tool facilitating the access

to energy resources (gas, oil and electricity) of ex-USSR and their transit through the ex-

URSS countries and establishment of free-market energy sector. In this way, the countries of

Central Asia would freely deliver their gas and oil through Russia for negotiated tariffs pro-

portional to the price of transported products. Hence, this would make Russia lose important

revenues on the resale activity in Europe of hydrocarbon bought in these countries [Furfa-

ri,2007: 131]. Furthermore, it would imply the removal of control of countries’ authorities of

energy sector. Consequently, the companies other than Gazprom could send oil from Central

Asia and this would put into question the monopoly of Gazprom. Yet, it would be hard to

imagine that the central government of Russia, those influence over the energy sector is very

strong, would accept to let the Russian energy sector be regulated by the rules imposed by the

free-market.

As a result, this Treaty was ratified by 53 countries of Europe and Asia except Russia which

signed it, but refused to ratify it [Cleutinx, Piper, 2008: 26]. Many times the EU put pressure

on Russia in order to make it ratify the Treaty. For example, on 12 February 2005 during the

G8 France highlighted importance of Russian ratification of this Treaty [Furfari, 2007:131].

Indeed, the ratification of this Treaty by Russia would entirely change energy policy of Rus-

sia, the EU and countries of Central Asia and would simultaneously make Russia lose too

much. Therefore the ratification of this Treaty is inacceptable for Russia, at least until today.

Apart from this Treaty there is another European document which could be qualified as prob-

lematic for the Russian side. This is the Third Energy Package adopted in 2011 by the EU.

The objectives that it pursues, namely liberalization of the EU energy market, do not match

the Russian aspirations, those largest gas company Gazprom has a monopoly over Russian

gas market, because, according to this package, Gazprom cannot manage production,

transport and retail segments of a single energy chain [Furfari, 2007: 131]. Moreover, this

package prohibited the companies outside the EU to purchase strategic distribution networks

without consent of national governments, those in their turn must consult the EU Commis-

sion. In Moscow this clause was renamed in the “Gazprom clause” and was apprehended as a

measure of protectionism against the Russians [Talseth, 2012: 13]. As a result, this package

represents Russia's biggest strain on energy relations with the EU and is still on the agenda of

discussions between Russian and the EU authorities.

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In this way, through these two documents one could see the attempts of the EU to limit the

Russian monopoly of Gazprom on the European energy market. However, Russia does not

seem to give up and stands firm on its positions.

Finon and Locatelli (2007: 7) eloquently commented that “the limits to the effectiveness of

this [EU] international approach are all too apparent with a country such as Russia which is

still a traditional power, deploys diplomacy backed by force to reassert its influence in its

‘near abroad’ and is determined to use its energy resources to exert geopolitical influence”.

Furthermore, James Sherr, associate fellow in charge of Russia and Eurasia Programme at the

Chatham House, stated that “there is no such thing as an “energy partnership” between Rus-

sia and the EU, but rather an unbalanced, symbiotic relationship. The stability of this rela-

tionship depends on the EU’s continued acceptance of harmful business practices in the Rus-

sian energy sector that clash with EU values” [Carnegie Endowment for International Peace,

2011], the position of monopoly of largest Russian gas company Gazprom as well as the

large role of government in energy sector contradicts the EU regulations, but Russia made

clear that it is not willing to change this situation and the interruption of EU-Russia discus-

sions could cost too much to the EU.

In fact, Russia is using its energy resources as political tool, which makes it difficult for the

EU to exercise pressure from its side on Russia. Therefore, given that the EU is very depend-

ent on Russian supplies of oil and gas and that it has not yet succeeded to diversify its suppli-

er countries, it seeks to find the most optimal solutions in energy field with Russia through

many different platforms of negotiations. However, these negotiations are also very important

from the Russian side, because Russia is, in its turn, very dependent on European demand on

energy. Indeed, the price on petrol in an important vector of economic situation in Russia:

with high prices for oil on the market the Russian economy is going well and vice-versa.

As a result, there is a deep interdependency between two of the great world powers. It then

requires a constructive approach between the both sides, resulting in numerous agreements,

more or less beneficial for the EU and Russia. It would work provided that all the EU Mem-

ber States have a common approach to their cooperation with Russia. However, in the follow-

ing parts of this thesis it will be shown up that deep divergences are still existing between the

EU Member States’s regarding their attitudes and relations with Russia.

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2. Divergent energy policies of the EU Member States: Case of Poland and Germany

In their recent study Stefano Braghiroli and Caterina Carta made a division of all the EU

countries into several categories regarding their relations with Russia [EurActiv, 2009]:

- "Eastern divorced" countries of the former USSR, which are the least friendly to Rus-

sia (Estonia, Lithuania, Poland, Latvia, the Czech Republic and Slovakia);

- "Loyal Wives", which have good relations with Russia (Italy, Austria and Greece);

- In between are the "Vigilant Critics" which are mostly independent on Russian energy

resources (Romania, Slovenia, Sweden, Bulgaria, Hungary and the United Kingdom)

- and the larger group, the "Acquiescent Partners" with variable degree of cooperation

with Russia (Belgium, Denmark, Finland, France, Germany, Ireland, Luxembourg,

the Netherlands, Portugal and Spain).

This division is revealing a certain trend: most of the new EU Member States and ex-

communist countries, such as Poland, Bulgaria or Romania, have rather unfriendly attitudes

towards Russia, while old members of the EU have good relations with it. There are numer-

ous factors explaining this tendency. For instance, the majority of the new EU Member States

had very close relations with Russia in the past mostly due to their geographical proximity

and their common communist past. In consequence, they have very specific relations with

Russia today, which are often translated in current quarrels. For example, the lack of consen-

sus between Estonian and Russian authorities over the Soviet war memorial in the center of

Tallinn led to aggressive reaction of Russia that even suspended the rail traffic between Esto-

nia and Russia, and so these events harmed the relations between these two countries. Anoth-

er example is Lithuania which was against the Russian decision to ship oil to its only refiner,

in Mazeikiai, since July 2006 [Barysch, 2008: 3].

Such disagreements have impact on the relations in other sectors of cooperation, including

the energy field. Therefore most of new EU member countries feel the most threatened by

Russia’s influence on European market mostly due to their geographical proximity. And all

these historical and territorial specificities can explain why these countries are sometimes the

first to seek suppliers of energy in countries others than Russia.

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Following this division, I will take an example of Poland, identified in the previous classifica-

tion as "Eastern divorced", as a case of a new EU Member State with a hostile attitude to-

wards Russia and an example of one of the EU founder members Germany from the category

“" Acquiescent Partners" with a strong cooperation with Russia. I will show on the examples

of these two countries to what extend their external energy policies regarding Russia differs

within the EU. I will also briefly describe the major goal of their energy policies in order to

show up that the EU Member States are mostly pursuing different objectives in their energy

policies.

2.1 Case of Poland

Poland, as well as many other new EU Member States with communist past, experienced a

high level of energy consumption during the communist period. The most important source of

energy was coal at that time. However, after the fall of communist regime and the economic

transformations in 1990’s the situation in Poland has started to change. The Table 1 shows

that between 1990 and 2005 the energy consumption in the country fell [Deshaies, 2007: 7].

The production of coal and lignite was also reduced: it dropped from 140 million tonnes tons

in 1991 to 98 million in 2005 [Deshaies, 2007: 7]. According to the numbers indicated, the

energy policy has been changed as well. Since Poland joined the EU in 2004, it was obliged

to meet the EU requirements, including the energy sector, which has had consequently a huge

impact on the energy policy of Poland.

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Table 1. Development of final consumption and gas emissions in the new EU Member States.

The Table 2 shows the energy mix of Poland in 2010. Firstly, it indicates that the part of solid

fuel in Poland in 2010 was enormous. The solid fuel of Poland is mainly made up of the coal

coming from Silesia and secondly of the lignite. They are used for the production of electrici-

ty. In fact, this source of energy was a national resource permitting Poland to limit its energy

dependence, which is indeed lower than in some other EU countries. It is the case of most

new EU Member States, where extraction of coal and lignite was very important until the end

of 1980’s on the contrary to Western Europe where the production of coal was strongly re-

duced for economic reasons [Deshaies, 2007: 7]. Secondly, crude oil and petroleum products

do not come to the main position, as it is the case in the rest of the EU. It is mainly due to the

lower standard of living in Poland compared to the old EU Member States and a low rate of

car ownership. These reasons also explain why the consumption of energy per inhabitant in

Poland is below the European average [Deshaies, 2007: 5]. Thirdly, the part of renewable

energies is quite comparable to the average in the EU.

Thanks to its huge resources of coal and lignite, Poland is a very important producer of elec-

tricity in the EU. Indeed, Poland along with Romania both produce the half of the total stock

of European electricity. At the same time, there are no nuclear power stations in Poland.

Thus, the features of energy system of the country, notably the way of electricity production,

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led to serious environmental problems. Poland is one of the EU countries with the highest

volume of pollutants per inhabitant [Deshaies, 2007: 6]. However, the degree of pollution has

begun to decrease after the fall of the communist regime due to the strong decrease in activity

of the most energy-consuming and polluting industries and fall in energy consumption. To-

day Poland has to comply with the EU requirements in the area of environment, which also

explains that huge efforts in Poland led towards the reduction of pollution. Nevertheless,

Polish authorities plan to build nuclear power stations in the near future. In 2009, the Gov-

ernment appointed a Special Envoy for Polish Nuclear Energy, in charge of initiating nuclear

energy into the Polish energy mix [Nyga – Łukaszewska, 2011].

The share of gas in gross inland consumption is not very high. However, the importance of

gas imports is crucial: annual imports of natural gas in Poland correspond to 70% of gross

inland consumption, while 90% of its import comes from Russia under a long-term agree-

ment. Domestic production covers approximately 30% of demand.37 As for the oil, Russia

provides 97% of Poland's imports of crude oil [Dempsey, 2006]. As a result, the dependency

of Poland on Russian gas and oil is very high. Nevertheless, this dependence is higher for gas

than for oil since there is no alternative route of supply for gas apart from those coming from

Russia. As for the oil, Poland can import oil by sea through the oil terminal “Naftoport”38 in

Gdansk. In this way, Poland is not so vulnerable to Russian supplies of oil than it is for gas.

37 European Commission (2012). Energy Markets in the European Union in 2011, 2012, last accessed 20 August 2013, [http://ec.europa.eu/energy/gas_electricity/doc/20121217_energy_market_2011_lr_en.pdf]. 38 Naftoport is the biggest operator in loading/discharging of imported or sea-exported crude oil in Poland. See [http://www.naftoport.pl/].

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Table 2. Gross inland consumption of Poland.39

Poland represents an important transit country for Central and Western Europe since two of

major oil and gas pipelines, namely the Druzhba (Friendship) Pipeline and the Yamal

Pipeline, cross Poland. Its importance as a transit country would be even increased if the

Yamal II, a parallel pipeline to the existing one, would be constructed. However, the new

project – Nord Stream40 – replaced this project. As for the Druzhba Pipeline, Russian authori-

ties seem to assign less and less importance to it in the recent years. The planned enlargement

of the Russian sea terminal in Primorsk would make it possible to export Russian oil bypass-

ing current transit countries [Naimski, 2007: 7]. As a result, Russia’s negotiation power

would rise since it could threaten consumers in Poland with possible cessation of oil supplies

from Russia without consequences on the energy deliveries to Europe. So, one could see the

clear will of Russia to avoid transit countries while constructing new route of gas and oil sup-

plies to Europe.

In fact, Poland has had several difficulties in its cooperation with Russia in the field of ener-

gy. The case illustrating it is the construction of Nord Stream, a gas pipeline taking maritime

route to Germany and bypassing Poland and Baltic States. In fact, Poland and Baltic states

39 European Commission (2012). Energy Markets in the European Union in 2011, 2012, p.125, last accessed 20 August 2013, [http://ec.europa.eu/energy/gas_electricity/doc/20121217_energy_market_2011_lr_en.pdf].

40 Also called North-European Gas Pipeline (NEGP).

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suggested to Russia, which was the major investor of this project and other project’s inves-

tors, a construction of terrestrial route through Poland and Baltic states those constructing

would involve much less financial resources. However, they were excluded from negotiations

on the project and the Nord Stream pipeline is bypassing their territories. This exclusion was

very negatively perceived by numerous countries, including Poland. It claimed that Russia

wants to separate new and old members of the EU [Ardillier-Carras, Boulanger, Ortolland,

2012:162]. Nevertheless, the project was inaugurated in 2011 by the German chancellor An-

gela Merkel and Russian President-in-office Dimitry Medvedev.

As a country with quite high level of dependency on Russia and at the same time hostile to

Russia, according to the survey of Stefano Braghiroli and Caterina Carta, Poland is also one

of the EU Member States most willing to find ways to decrease Russian influence. In 2006

Piotr Naimski, Secretary of State at the Ministry of Economic Development and the govern-

ment's top expert on energy security, said in an interview in his Warsaw office that Poland

seeks to diversify its sources of energy supply [International Herald Tribune, 2006].

As I explicated in the first part, there are several means to decrease Russian influence: to find

new supplier countries, to diversify supply facilities or to find new sources of energy. Poland

has chosen several of them. In the field of oil there is a project of building Odesa-Brody-

Plock pipeline aiming at construction of a new transportation route for oil from the Caspian

Sea Region (Kazakhstan and Azerbaijan) to Europe. This would allow to supply Poland with

oil coming from this region via Naftoport in Gdansk through existing connection from Odesa

to Brody and a new pipeline connecting Brody to the existing Polish network in Adamowo

[Naimski, 2007: pp.8-9]. It would permit to avoid maritime transportation of oil in the Bos-

phorus and the Black Sea, thus facilitating export of oil from the Caspian Region to world

markets and avoiding possible accidents. Besides, in this way Poland as well as other Central

and Eastern countries would diversify their supply sources and decrease their dependence on

Russian oil. This project is actively discussed by the authorities of Azerbaijan, Georgia, Lith-

uania, Ukraine, Kazakhstan and Poland all interested in this project.

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In the field of natural gas supplies there are two main projects (see Appendix 1). The first one

is the construction of an LNG41 terminal situated in its Baltic coast, more precisely in

Swinoujscie. It would permit Poland to import LNG from different suppliers. Its initial capac-

ity will be 2.5. BCM42 annually and could be extended to 5 BCM and eventually to 7 BCM if

needed. The Świnoujście terminal will be operational in 2014. This would also permit the

Baltic states to diversify their gas supplies through this Polish terminal.

Another project of Poland aiming at diversification of its supply sources is construction of a

pipeline that will connect it to Denmark and thus give it access to Norwegian natural gas.

This Baltic Pipe is intended to carry 3 BCM of natural gas annually [Naimski, 2007:6].

Appendix 1. Poland: existing and planned natural gas routes of supplies43

After successful completion of both of these projects, the structure of natural gas supplies to

Poland will change in the following way: one-third will come from domestic production, one-

third from the two infrastructure projects entering Poland’s supply network from the North,

41 Liquefied Natural Gas is a condensation of the gas into liquid form through the process of cooling of natural gas to about -260°F at normal pressure.

42 Billion cubic metres 43 Piotr Naimski (2007). Energy diversification strategy for Poland, Columbia University, p.6, last accessed 14 August 2013, [http://www.columbia.edu/cu/ece/academics/regional/conf/Piotr_Naimski_at_Columbia%20University070917_.pdf].

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and another one-third will be imported from the East according to the existing long-term con-

tract (see Appendix 2) [Naimski, 2007: 6].

Appendix 2. Natural gas diversification projects.44

For the most part, both projects are carried on by a state-controlled (86% of shares) company

– Polish Oil & Gas Company (www.pgnig.pl) [Naimski, 2007: 6]. They are additionally

funded by the European Union since they are considered to be of common European interest.

Poland also projects to put in place two interconnections, which are PL-DE and PL-CZ.

These projects received support of the European Energy Programme for Recovery (EEPR).

Besides, Polish government suggested a programme of investment in gas storage with differ-

ent European funds. Feasibility studies around interconnections with Slovakia (part of N-S

interconnections) and Lithuania (part of BEMIP) were also realized.45

44 Piotr Naimski (2007). Energy diversification strategy for Poland, Columbia University, p.6, last accessed 14 August 2013, [http://www.columbia.edu/cu/ece/academics/regional/conf/Piotr_Naimski_at_Columbia%20University070917_.pdf].

45 European Commission (2012). Energy Markets in the European Union in 2011, 2012, last accessed 20 August 2013, [http://ec.europa.eu/energy/gas_electricity/doc/20121217_energy_market_2011_lr_en.pdf].

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Another opportunity for Poland to notably reduce its dependence towards energy supplies

from Russia is the extraction of shale gas. Poland has important resources of shale gas and

the government has been delivering extraction licenses. In fact, its extraction would permit

Poland to become self-sufficient in energy.

In this way, one could see that in its energy policy Poland is mainly guided by priority of

energy security. This preoccupation of Poland is obvious if one observes its projects and ac-

tions in the field of energy. In the attempt to secure its energy suppliers, Poland is looking for

strongly reducing its dependence on Russian energy.

2.2 Case of Germany

The table here below indicates that the crude oil and petroleum occupy the largest share in

gross inland consumption of energy in Germany in 2010. The part of renewable energies was

larger than those of Poland, but yet not very important. Nuclear energy represented a small

share of total energy mix.

Table 3. Gross inland consumption of Germany.46

46 European Commission (2012). Energy Markets in the European Union in 2011, 2012, p.71, last accessed 20 August 2013, [http://ec.europa.eu/energy/gas_electricity/doc/20121217_energy_market_2011_lr_en.pdf].

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German commitment for renewable energy is not new, but it is going right from 1990 when

the government set the support wind power system as its priority [Duquenne, 2013]. The next

step in this direction was realized in 2000 when German governing coalition composed of

socialists and greens announced phase-out of nuclear power. It was foreseen the gradual clos-

ing down and shutting down of the last nuclear power plant by the beginning of 2020 [BBC

News, 2000]. Thus, Germany became the first leading economic power that has officially

declared its intention to finish with nuclear power.

However, in 2010 the governing Christian Democrat party which succeeded the previous

coalition brought changes in the previously conceived strategy in the field of nuclear power

[Gay, Glita, 2012: 119]. It adopted a new strategy called the Energy Concept which set up the

principles of a long ‐ term, integrated energy approach for Germany and fixed following ob-

jectives: a drop of energy consumption by 50%, a decrease in CO2 emissions by 80-95% and

increase in production of renewable energies by 80% [Duquenne, 2013]. It was planned to

achieve these objectives by 2050. In this way, German authorities committed themselves to

make Germany the world’s most energy‐efficient and environment friendly economy, while

at the same time keeping moderate energy prices and a high level of economic prosperity.

An essential proposal of the Energy Concept was extension of the operating lifetime of Ger-

man nuclear power plants by an average of 12 years: the 7 oldest plants were prolonged by 8

years and the 10 most recent plants – by 14 years. The environment ministry declared that

nuclear power was given ‘a bridging role’ in the Energy Concept ‘until renewable energies

can play their part reliably and the necessary energy infrastructure has been established’

[Buchan, 2012: 3]. Hence, the nuclear power phase ‐ out approved by the former government

was postponed.

Nevertheless, following the catastrophe of Fukushima in March 2011, the German govern-

ment adopted a second package of measures in order to finish with nuclear energy by 2022

and, thus, make energy transition. This package was called the Energiewende and was stem-

ming from the previously adopted Energy Concept. It also focused at the large-scale deploy-

ment of renewable energy. According to this new plan, the share of renewable energy in the

final energy consumption mix should have been growing to 18% by 2020 and then to 60% by

2050, and in electricity generation even to 80% [Buchan, 2012: 2]. However, the fundamental

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difference between Energy Concept and Energiewende was their divergent policies regarding

nuclear power. If Energy Concept postponed the phase-out of nuclear-power, the Ener-

giewende was again accelerating this process. Indeed, through this document, German author-

ities announced acceleration of the phase-out of nuclear power and the closure of last nuclear

power plant by 2022. Later, according to official data on percentage of renewable energy in

the total energy mix of German, the document Energiewende has revealed itself successful in

introducing renewable energies comprising electricity from biomass, wind energy and solar

photovoltaic [OECD/IAE, 2013]. The Appendix 3 clearly shows the increase in volumes of

renewable energy in the whole energy consumption of Germany. The latter also registers a

high rate of innovation in environmental technologies. In fact, Germany was third behind

Japan and the US in the number of environmental patents awarded in 2007 [Buchan, 2012:

33]. As a result, today renewable energy is a main source of investment in Germany and pro-

vider of jobs [Buchan, 2012: 14].

Appendix 3 : Share of renewable energies in energy provision of Germany. 47

Source: BMU on the basis of AGEE-Stat

Finally, the third objective of Energiewende is that of reduction of energy consumption.

Germany plans to realize it through a Building Rehabilitation Programme. Besides, Germany

considers imposing specific standards on electrical appliances by prohibiting any less effi-

cient new produces from the market [Hope, 2013].

47 Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit (2013). Erneubaren Energien in Zahlen, last accessed 18 August , [ http://www.erneuerbare-energien.de/fileadmin/ee-import/files/pdfs/allgemein/application/pdf/broschuere_ee_zahlen_bf.pdf].

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However, German energy transition is also problematic regarding the sources of replacement

of energy that stemmed from nuclear power stations. Since 2011, in the framework of the

strategic goal of phase-out of nuclear energy, the 8 oldest nuclear power stations in Germany

were closed. This nuclear energy was partly replaced by the energy produced by thermal

plants. However, these thermal plants are themselves causing harmful effects on environ-

ment. The emission of CO2 coming from these plants are enormous. According to statistics, a

German citizen emits today 12 tonnes of CO2 per year, while a French one - only 8 tonnes

[Gay, Glita, 2012, 121]. This shows that Germany is still facing important challenges and has

to make progress if it wants to achieve the objectives that it has fixed in the field of environ-

ment.

Moreover, apart from the thermal plants, Germany has been using fossil fuels during its tran-

sition. Indeed, Germany is currently investing in construction of 84 electric stations using gas

and 17 ones using coal [Natural Gas Europe, 2013]. Consequently, the percentage of coal

and gas in German energy mix is growing. This is, in its turn, increasing harmful effects on

the environment and raising the German dependency on Russian energy resources, since

Germany is also importing coal from Russia (25% of German coal is coming from Russia)

[Natural Gas Europe, 2013].

In 2010 total energy imports of Germany were of around 202 million tons oil equivalent,

which means that Germany is importing 70% more than the second and third-largest energy

importers, Italy and France [Ardillier-Carras, Boulanger, Ortolland, 2012: 162]. The first

importer of gas in Germany is Russia and it is also an important supplier of oil. However,

German dependence on Russian oil is less important than its dependence on Russian gas. The

single oil pipeline Druzhba going through Belarus brings approximately 22% of Germany's

total oil imports. Imported oil covers more than 93% of national consumption [Natural Gas

Europe, 2013]. Its imports are constant over last 20 years (35% in 2005, 37% in 2000, 37% in

1995 and 33% in 1991), which is mainly due to the increase of Norwegian gas imports to

Germany [Natural Gas Europe, 2013]. On the contrary, the share of Russian oil in German

energy consumption has significantly grown from 15.8% in 1991 to 36.3% in 2010 and since

the energy consumption in Germany rose in 2005, Russian oil imports to Germany will con-

tinue to increase due to the German decision to finish with nuclear energy and to engage itself

in the project of a Nord Stream.

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Given that Germany is the first EU country of destination of Russian energy, it maintains

very close relations with Russia. The experience of long years of cooperation between Ger-

many and Russia has demonstrated that Russia, and previously the Soviet Union, has been a

reliable energy partner for Germany, since no disruption of energy supply occurred since the

beginning of this cooperation. During the seminar organized by the Russo – German Raw

Materials Conference on March 2010, Minister of State in the Foreign Ministry Cornelia Pie-

per, reminded the huge volumes of German oil and gas imports and pronounced following

words: ‘our allegedly too-high dependency on energy from Russia is therefore often under-

lined. Still, the fact remains that Russia is at least as dependent on exports to Europe as we

are on energy imports from Russia. Both partners, Germany and Russia, therefore comple-

ment each other mutually’ [Jensen, 2013: 35].

One of the examples illustrating the tight cooperation between Germany and Russia is the

project of construction of Nord Stream. In fact, Germany has been actively taking part in the

project of Nord Stream linking Germany directly to Siberia's gas reserves under the Baltic

Sea. The consortium led by Gazprom (51%), Russian major gas company, was composed of

largest German energy company E.ON Ruhrgasand Wintershall48 (15,5% each of company),

Dutch natural gas infrastructure and transportation company Gasunie and French electric util-

ity company GDF Suez (9% each of them) [Boussena, Locatelli, 2010: 6].

This project was discussed since 2000 and was preceded by a declaration on the Strengthen-

ing of economic ties, in particular in energy field in 2004.49 In the light of these events and

also following German opposition to unbinding all production and distributing activities in

the gas sector, Kirsten Westphal stated that ‘the politics of the Schröder government from

1998 to 2005, which are without doubt characterized by a certain shift away from a multilat-

eral approach towards a more unilateral pursuit of interests, reflected the prevailing discourse

that managing external energy dependency firstly demands powerful and competitive compa-

nies at the international level and secondly cannot only be left over to private companies’

[Jensen, 2013: 40].

These politics described by Kirsten Westphal seemed to be further pursued by German state,

since another Russian project of construction of pipeline - South Stream - benefited from the

48 Wintershall is a subsidiary of BASF, the huge German chemical company.

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strong support of German side. This pipeline initiated in 2007 by the Gazprom side should

deliver gas to Austrian Coast under the Black Sea circumnavigating Poland, Estonia, Latvia

and Lithuania.

Moreover, numerous German companies have several long-term contracts with Gazprom.

These contracts are fixing very high supplied volume of energy from Russia to Germany. 50

Apart from mentioning volume of supplied gas, they are also including other aspects of coop-

eration between Germany and Russia in the field of gas. For instance, in July 2004 German

companies established an agreement with Gazprom which permits German companies to par-

ticipate in the complete processing chain of Russian gas production - from exploration and

transport, through the new pipeline, to marketing in Western Europe. Besides, German com-

panies have obtained access to Siberian gas resources. Through this extensive access to Rus-

sian gas, German companies are able to strengthen their positions within internal German

market as well as internationally as the distributor of Russian-supplied gas. In exchange, the

German energy enterprises, BASF and E.ON, agreed to support Gazprom in its planned ex-

pansion onto the European gas market and also gave up the shares in these companies

[Geden, Marcelis, Maurer, 2006: 18].

One of such contracts was the agreement between Gazprom and BASF comprising the whole

chain of activities in the field of gas [Smith, 2008: 14]. It was covering the entire gas chain,

with exploration and production activities (in Russia), and transmission and distribution ac-

tivities (in Germany and several other European countries). Under the terms of the contract,

Wintershall, a subsidiary of BASF which is the largest crude oil and natural gas producer in

Germany, obtained a 25% stake minus one share in the Russian company Severneftegazprom

which is developing the Yuzhno-Russkoye gas field. In return, Gazprom raised its share in

WINGAS, the joint venture of Wintershall Holding GmbH in Kassel and Russian Gazprom,

from 35 to 50% minus one share. Since its creation in 1993, WINGAS grew to one of the

biggest natural gas suppliers on the German market with a market share of approximately

20%. This Russo-German company supplies natural gas mostly coming from Russia to public

utilities, regional gas suppliers, industrial companies and power plants in Germany.51

51 See WINGAS, last accessed 1st September 2013,[http://www.wingas.de/19.html?L=1].

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In this way, Gazprom is getting more influence within the European market and Germany is

becoming more vulnerable to Russian supplies and, thus, to Russian will. So, one could clear-

ly see the will of Russian authorities to penetrate European market. German authorities, on

their turn, are primarily taken into account interests of German biggest energy companies,

which have numerous advantages from their cooperation with Russia.

Finally, the strengthened cooperation between Russia and Germany is also visible through

different organizations and existing platforms of dialogue such as a specific thematic working

group German-Russian Energy Cooperation established in March of 2003 by representatives

of the economies of both states or German-Russian energy summit dealing with energy sup-

plies and development of Russian-German partnership in Jekaterinburg in October 2003

[Geden, Marcelis, Maurer, 2006: 18].

Francis McGowan in his paper called “Can the European Union’s Market Liberalism Ensure

Energy Security in a Time of ‘Economic Nationalism?” explained that the Russo-German

relationships are dictated by ‘economic nationalism’ which means that German domestic

economic interests are shaping its overall policy approach. As it was shown previously, Ger-

man national energy champions have strategic interest in getting more access to Russian gas.

These interests are considered in German energy policy which can be seen in German deci-

sions and declarations. For instance, Germany was the key EU’s rival to numerous EU poli-

cies on Energy such as the Third Energy Package and has been for a long time opposing lib-

eralization of its market which would permit other European firms to integrate German mar-

ket. The leading energy companies of Germany which are EON and RWE have also blocked

efforts to build more electricity and gas interconnectors with neighbouring states, which is a

crucial issue for energy policy of the EU since there is a lack of cross-border connection in

the EU. Moreover, Germany along with France and Italy prevented an energy market reform

guaranteeing greater competition and transparency from being implemented within the Euro-

pean Union. It has also blocking within NATO initiatives to elaborate a common policy limit-

ing Russian influence on the energy situation within the EU [Smith, 2008: 14]. Thus, these

are not the interests of the EU which are taken into account by Germany, but its own inter-

ests. Therefore, Germany is commonly considered to be the key opponent and obstacle for an

effective coordinated EU energy policy [Smith, 2008:14].

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On the example of Germany and Poland, one can see how different are energy mixes in vari-

ous countries of the EU and how divergent are energy policies and projects in the field of

energy in these countries. Germany and Poland seems to have completely different priorities

in their energy policies: Germany which is mostly guided by environment and engaged in

shut-downs of its nuclear power stations and Poland which, on the contrary, looks for con-

struction of nuclear power stations and is mainly preoccupied by the security of its energy

supplies.

In the face of common situation of high dependency of their oil and gas supplies on Russian

energy, both countries have taken completely different strategies in their external energy pol-

icy. Poland is looking to decrease its dependency on Russian energy supplies looking for pro-

jects different of those suggested by Russia. As for Germany, it is rather willing to strengthen

its cooperation with Russia and in this way be supplied by almost the sole country which is

Russia. It was shown up through Russo-German joint ventures, common projects, etc. In this

way, Germany links “energy security” with Russian deliveries and is rather considering

strengthening of cooperation with Russia in energy sector as strategic choice. This is showing

up that the interests of German oil and gas companies are put forward. Indeed, Russian bilat-

eral energy ties with Germany are stronger than with any other Western European country

already over two past decades and this cooperation seems to become stronger through the

time. As for Poland, it understands under the concept of “energy security” independence on

Russian energy deliveries and its cooperation with Russia is much less visible as those be-

tween Russia and Germany.

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3. Key differences of the EU Member States’ energy policies

3.1 Bilateral negotiations between the EU Member States’ oil and gas companies and Gazprom

The examples of Germany and Poland have demonstrated how different can be energy mixes

of different EU countries. However, despite different energy mixes among the EU Member

States, the Table 4 is illustrating that the largest share of energy mix of all the EU Member

States is oil and gas (37%). According to the Appendix 5, the largest oil and gas supplier of

the EU is Russia. Therefore, it is extremely difficult to avoid the biggest partner of the EU in

the field of energy, which is Russia.

Table 4. EU 27, Gross Inland Consumption (2006).52

Appendix 5. EU’s external energy supplies53

Gas imports (2005, EU-25) Oil imports (2005, EU-25)

Russia 40% 36%

Norway 25% 20%

Algeria 19% -

Saudi Arabia - 11%

52 European Commission (2012). Energy Markets in the European Union in 2011, 2012, last accessed 20 August 2013, p.10 [http://ec.europa.eu/energy/gas_electricity/doc/20121217_energy_market_2011_lr_en.pdf].

53 European Commission (2006). Energy and Transport: Figures and Main Facts: Statistical Pocketbook 2006.

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Moreover, the situation considerably changed since the last two eastern enlargement of the

EU, when in sum 12 countries had joined the EU. This event has even more increased the

EU’s dependence on Russian energy, because they are all almost completely dependent on

Russian energy as it is shown in the tables below.

Table 5. Origin of Natural Gas Imports per EU Member State.54

54 F.Baumann, G. Simmerl (2011). Between Conflict and Convergence:The EU Member States and the Questfor a Common External Energy Policy, Discussion Paper, Research Group on European Affairs, p.10, last ac-cessed 01 September 2013, [http://www.cap.lmu.de/download/2011/CAP_Paper-Baumann-Simmerl.pdf].

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Table 6. Origin of Crude Oil Imports per EU Member State.55

Another factor that has contributed to strenthening of European dependency vis-à-vis Russia

is growth in share of oil and gas in global energy consumption of European citizens. For in-

stance, the Appendix 5 shows that the share of gas, an important energy resource, is growing

in global energy consumption of the EU.

55 F. Baumann, G. Simmerl (2011). Between Conflict and Convergence:The EU Member States and the Questfor a Common External Energy Policy, Discussion Paper, Research Group on European Affairs , p.11, last ac-cessed 01 September 2013, [http://www.cap.lmu.de/download/2011/CAP_Paper-Baumann-Simmerl.pdf].

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Appendix 5. The share of natural gas in the EU primary energy consumption. 56

Consequently, Russia is using this situation of the EU energy dependency as a tool of foreign

policy following a principle ‘divide and conquer‘[Ogryzko 2013]. This means that Russia

uses different approaches in its energy relations with each EU country and negotiates indi-

vidually one by one with them. As a result, because of a number of different strategies exist-

ing within the EU countries towards Russia, the coherence of external EU approach in the

field of energy has failed.

In this way, Russia is using its energy power as the main political weapon in its external rela-

tions. The examples of using energy as a political weapon of Russia are quite numerous.

Apart from disruptions of gas supply from Russia to Europe in 2006 and 2009 due to the

Russian-Ukrainian crisis, one could also recall the cut of supplies in oil from Russia to the

Czech Republic for one day as a reaction to the agreement signed between Poland and the

United States regarding the stationing of an antimissile radar site in Czech Republic [Smith,

2008: 3].57

Moreover, this strategy is not hidden by Russia. The following words openly said by Russian

authorities are proving it: ʺWe will extend the intimidation, harassment and expropriation of

British, American, Polish and Czech companies active in our domestic market and as energy

customers, while at the same time offering further preferential treatment to those from coun-

56 H. Mäkinnen (2010), The future of natural gas as the European Union’s energy source – risks and possibili-ties, Electronic Publications of Pan-European Institute 9/2010, p. 10, last accessed 01 September 2013, [http://www.utu.fi/fi/yksikot/tse/yksikot/PEI/raportit-ja-tietopaketit/Documents/M%C3%A4kinen_final.pdf].

.

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tries that are politically friendly, especially France, Italy and Germany. Are big European

companies willing to sacrifice billions of euros in lost exports or higher energy costs by in-

dulging their politicians’ desire to grandstand and moralize? We think not” [Braghiroli,Carta,

2009:1].

The use of energy as a strategic political tool is possible because of the structure of Russian

oil and gas market. In fact, Russian authorities control the largest oil and gas companies,

which are respectively Transneft and Gazprom. As a result, the strategies of these companies

are decided in tight cooperation with Russian state authorities. Transneft controls 50 000 km

of Russian oil pipelines but its role is relatively less important, because the commercialisation

of oil is much more flexible (transport by tankers) [Ardillier-Carras, Boulanger, Ortolland,

2012: 155]. As for the Gazprom, it owns 85% of Russian production, 100% of gas pipeline

transit and it is a sole gas exporter, thus exercising a monopoly over commercialisation and

distribution of gas [Coburn, 2010:19]. In fact, this is the sole Russian company, which is al-

lowed to transport gas outside of Russia. As a result, it is inevitably for the EU countries and

ex-URSS transit countries to deal with Gazprom.

In order to secure its supplies to the EU, Russia is concluding numerous agreements with the

EU Member States. In fact, there is a huge number of bilateral agreements existing between

the EU countries and Russia. The table below is summarising the long-term contracts which

have been concluded between the Gazprom and several EU Member States. It shows up that

Gazprom has signed the largest number of agreements with France and Germany. In conse-

quence, Gazprom has had a greater access to European market and is profiting from greater

control over internal markets of both of these countries. These contracts are also permitting to

Gazprom to have a security of its gas deliveries [Smith, 2007: 2].

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Table 6. Long-term contracts concluded by Gazprom with European partners between 2005

and 2009 (new and renewed).58

Apart from the long-term bilateral contracts between the EU countries and Russia, Gazprom

has taken recourse to a method of acquisitions of stakes in various national companies. In this

way, it is gradually penetrating European energy market. The table here below lists some of

these recent acquisitions:

58 S. Boussena, C. Locatelli (2010). Gas market developments and their effect on relations between Russia and the EU, Cahier de recherche No 38 ENG, Laboratoire d’économie de la production et de l’intégration interna-tionale, p.3, last accessed 15 August 2013,[http://hal.archives-ouvertes.fr/docs/00/57/81/36/PDF/CR38ENG_SB-CL_gas-market-dev_oct2010.pdf].

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Table 7. Gazprom’s main Joint ventures, acquisitions among its European Union partners and

its main subsidiaries in the EU (end of 2009).59

The fact that the EU Member States continue to conclude contracts with Russia and let Gaz-

prom acquire stakes in their national companies is showing up that the strategy of Gazprom is

successful. Gazprom is succeeding to attract the EU’s gas and oil companies to have a close

cooperation and is progressively gaining influence over the national markets within the EU.

This also means that the state authorities of the EU Member States are allowing to their com-

59 S. Boussena, C. Locatelli (2010). Gas market developments and their effect on relations between Russia and the EU, Cahier de recherche No 38 ENG, Laboratoire d’économie de la production et de l’intégration interna-tionale, p.4, last accessed 15 August 2013, [http://hal.archives-ouvertes.fr/docs/00/57/81/36/PDF/CR38ENG_SB-CL_gas-market-dev_oct2010.pdf].

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panies to act in this way, privileging commercial interests of their national companies. In

consequence, this is translating the lack of a common EU-wide strategy towards Russia.

3.2 Pipeline Strategy

Russian Federation inherited a large network of hydrocarburant built during the Soviet time.

Around 80% of Russian exports of oil are directed to Europe [Ardillier-Carras, Boulanger,

Ortolland, 2012: 156]. There are three main ways of export. Firstly, it is the one of the long-

est oil pipelines of the world - Droujba - which is going to the center of Europe crossing Bel-

orussia and a part of Ukraine. It entered into service in 1963 and in 2007 there was 27% of all

Russian oil transported to Europe which was transferred through this oil pipeline to Poland,

Hungary, Slovakia, Czech Republic and Germany. Secondly, it is the oil pipeline Baltic Pipe-

line System-BPS-1, directed to the Baltic and arriving at Primorsk near Saint-Petersbourg. In

2007, it has supplied Europe with 31% of all oil. Finally, there are other networks arriving at

Novorossiisk and supplying Europe with 31% of all oil in 2007 [Ardillier-Carras, Boulanger,

Ortolland, 2012: 156].

As for the gas exports, they are also delivered to Europe through several transit pipelines. The

traditional Russia’s largest and oldest gas export route is called Brotherhood pipeline. It

crosses Ukraine, Slovakia and the Czech Republic to finally achieve Germany and has off-

shoots in Hungary and Turkey through Moldova, Romania and Bulgaria. The Central Asia-

Center pipeline (CAC) represents the principal Central Asia’s natural gas pipeline system and

the main route of transportation of Central Asian gas to European markets through Russia

[Mesterhazy, 2009: 7 ].

It is in fact more difficult to diversify supplies in gas than in oil, because the ways of trans-

portation of gas are limited, even if there are several ways of gas transportation [Ardillier-

Carras, Boulanger, Ortolland, 2012: 155]. The traditional infrastructures of gas delivering are

transit and direct pipelines. However, the current projects of construction of new pipelines are

mostly concern direct pipelines, rather than transit ones. This shows the clear ambition of

Russia to avoid transit countries and the ambition to deal directly with the EU countries.

Another way of gas transportation developing over the last few years is gas transportation in

the form of LNG. The European Union, as well as Norway, Switzerland, the Balkans and

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Turkey receive approximately three-quarters of its natural gas imports by pipelines, while the

rest is in the form of liquefied natural gas (LNG) [Götz,2008: 43].

Indeed, for some time now, there are discussions on LNG as an eventual pillar of a more real-

istic approach to energy security on European gas markets [Mesterhazy, 2009: 7]. In fact, it

would permit to transfer energy across water rather than across sovereign territory, which

would allow avoiding problems of transit. Thus, it offers opportunity to have recourse to

more suppliers and then to ensure the security of supply. Moreover, in the long term, it could

permit to globalise effectively both of the gas supplier base and the gas market itself and thus

even more ensure the security of supply.

However, development of LNG requires technological innovation and expensive infrastruc-

ture to produce and transport LNG [Mesterhazy, 2009: 7]. This is in fact explaining too long

development of this sector. Therefore, the share of gas transportation through pipelines will

be most probably the most important way of transportation in future, which is illustrating the

importance of strategy of pipelines’ construction.

Certainly, the pipelines represent strategic infrastructures for both importers and exporters of

energy. Their location is crucial, since it is ensuring the deliveries of gas and oil. Indeed, the

strategies of pipelines’ construction explain energy policy of a country and show up its ener-

gy strategy and intentions.

There is a constant evolution of pipelines, in particular in recent years, from Russian and EU

side. Diversification of oil routes has begun first, in the mid-1990s and continues to the pre-

sent. This could be linked to the beginning of Russian “pipeline politics”, when Russia has

stopped its energy supplies to the Baltic states in order to prevent their independence move-

ments [Smith, 2007: 6]. As for the gas routes, their diversification arrived much later. The

key moment when the both sides have started to seek for construction of new pipelines is gas

crises of 2006 and 2009. At that point, the EU and Russia realised how much they are de-

pending on the transit countries and the EU could also measure the degree of its dependency

on the Russian supplies. Then, Russia has begun to initiate new projects of pipelines’ con-

struction avoiding transit countries, while the EU has actively engaged in diversification of its

energy supply chains and has increased in number of third countries supplying the EU with

energy.

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However, not all the countries of the EU look for diversification of the routes of supplies. The

projects of Nabucco and South and Nord Stream are revealing division existing between the

EU countries regarding different approaches of the EU Member States towards Russia and,

thus, showing how divergent are the interests of different EU countries.

The table here below indicates the already existent pipelines supplying Europe with gas and

oil and those, which are on the way of construction.

Appendix 6. Gas and dependency. 60

60 BP Statistical Review of World Energy 2010.

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3.2.1 Nabucco The EU has engaged itself in numerous projects aiming at establishing gas and oil pipelines

between the suppliers from Caspian region and consumers of the EU market. Since estab-

lishment of the first independent from Russia pipeline between Baku (Azerbaijan) and Geor-

gian harbor Soupsa in 1999, the EU has begun construction of pipelines from Caspian region

avoiding the territory of Russia. However, this pipeline was not very effective because of its

partial transit by sea making its construction too slow. In this frame, Turkey revealed itself to

be the sole country which would permit reliable transit through the zones of Caspian produc-

tion and European markets avoiding Russian territory. In consequence its territory makes part

of the route of gas pipeline Nabucco, oil pipeline Baku-Tbilisi-Ceyen (BTC) and gas pipeline

Baku-Tbilisi-Erzurum binding Azerbaijan and Turkey since May 2005.

Nabucco makes part of the strategy for a Southern Corridor for natural gas to Europe. It is not

the sole project of this strategy. The EU’s Southern Corridor gas strategy includes Nabucco

going through 15 to 20 countries; White Stream bypassing the territory of Turkey and thus

preventing Turkey from monopolisation of gas transit from Caspian to Europe; and the Tur-

key-Greece-Italy Interconnector with potential capacity ranging from 60 bcm to 120 bcm—

larger than Nabucco’s 31 bcm capacity [Coburn, 2010: 21].

With its initial length of 3 300 km Nabucco has had to bind Central Europe with Eastern bor-

ders of Turkey, but it has been cut to 1300 km because of uncertainty of suppliers. According

to estimations, the Nabucco could meet 8 % of demand on gas. However, the construction

works, which had been foreseen for 2012, have been postponed and have not yet begun, but

should start in 2015 in case if Shah Deniz gives his approval. In this case, first supply of gas

coming through Nabucco could take place for Georgia and Turkey in 2018 and for the rest of

Europe in 2019 [LeMonde, 2013]. Moreover, apart the decrease in dependence of the EU vis-

à-vis of Russia that the Nabucco could offer to Europe, it could also permit to drop Russian

prices on gas [Barysch, 2007,6].

According to the report of NATO Parliamentary Assembly [Mesterhazy, 2009], recent devel-

opments reveal that plans for Nabucco are progressing and possibly gathering steam. These

include: the Nabucco Summit held in Budapest last January; the 20 March decision of the

European Council to provide a 200 million euro credit guarantee for the project; the signing

52 / 67

of an intergovernmental transit agreement by Turkey, Bulgaria, Romania, Hungary and Aus-

tria on 13 July; and the strengthening interest of several producers, including Iraq and Turk-

menistan, to sell their gas through Nabucco. These developments give hope that the project

Nabucco will be carried out.

However, apart from the problem of source of gas supply for Nabucco mentioned earlier, the

construction of Nabucco is facing other problems. Even if it was classified by the European

Commission as a priority project, not all EU members are enthusiastic about this project.

These are rather the countries of Central and Eastern Europe looking for decreasing coopera-

tion with Russia which are stressing the importance of this project. Moreover RWE, a large

German electric utilities company, withdrew from this project [Ardillier-Carras, Boulanger,

Ortolland, 2012: 173].

Finally, it is important to notice that even if Nabucco were built, it would only meet 6% of

European demand – just one-fifth of what Russia currently supplies. This means that this pro-

ject cannot resolve the problem of the EU dependency on Russian gas. Therefore, the EU will

also need to elaborate other solutions in the meantime. If Nabucco is an important step as a

long-term solution, the short term focus should be put on improvement of the interconnection

between Central and South-Eastern European countries and on elaboration of other less ex-

pensive and more feasible projects.

For instance, another project making part of the EU’s Southern Corridor is the White Stream

which is a private venture with total capacity of 32 bcm. It is planned in order to deliver Aze-

ri gas directly to Europe through Georgia and Romania, passing under the Black Sea and by-

passing Turkey.

Moreover, the EU is planning to extend the existent connexion between Turkey and Greece

to Italy under Adriatic. This project is called ITGI (interconnection Turkey-Greece-Italy).

There is also a project of Trans Adriatic Pipeline (TAP) which would also cross Adriatic.

These projects would be much cheaper as Nabucco is, but they would imply construction of

pipeline throughout Turkey, which is already included in the Nabucco project [Ardillier-

Carras, Boulanger, Ortolland,2012: 171]. Finally, there is a project of construction of Trans-

Caspian Gas Pipeline (TCGP) which would be particularly beneficial for the EU. This is an

underwater pipeline, which would transfer 30 bcm of Turkmen and Kazakh gas per year to

53 / 67

Azerbaijan and then to Europe. It would connect to the South Caucasus pipeline that delivers

gas to Turkey and could then be conducted through the Nabucco pipeline, without crossing

Russia and Iran. However, the maritime boundaries of the Caspian Sea are still unresolved

until nowadays and Nabucco is not finished yet. Moreover, much of the Caspian gas is situat-

ed in removed and isolated zones of the eastern Caspian shores and bringing large rigs to the

region would be very expensive and logistically difficult [Mesterhazy, 2009: 8].

Thus, it is obvious that the EU does not have a lack of the projects to ensure its energy supply

security, but the issue is mainly in financial resources and the will of political authorities. The

European Commission has expressed its preference by making the Nabucco priority project.

However, the problem exists on national levels, since not all the EU members are backing

this project. Finally eventually this project would be more popular if Russia would not ad-

vance its own projects and involve in them major EU’s oil and gas companies.

3.2.2 Nord Stream and South Stream The goal that Russia has been pursuing while conceiving the project of South and Nord

Stream pipelines is to increase its bargaining power with the transit countries and to avoid

granting preferential tariff to the latters. The accomplishment of these projects would permit

to Gazprom to extend its monopoly in Europe and, thus, to increase Russian influence in Eu-

rope. Thus, Russia foresaw numerous offshore projects, which would permit to avoid transit

countries, as it is already the case for the Blue Stream which directly supplies Turkey with

gas through the offshore pipeline across the Black Sea.

The largest Russian projects are following: the Nord Stream pipeline to Germany crossing the

Baltic Sea, a small onshore pipeline to Finland and the South Stream pipeline to Bulgaria

through the Black Sea circumnavigating Poland, Estonia, Latvia and Lithuania [Mesterhazy,

2009: 5]. The Nord Stream was inaugurated in 2011. It crosses Baltic see from north to south

from Vyborg situated near Saint Petersburg to German harbor Greifswald. It supplies with

gas Germany, Danemark, France and Great-Britain. In this way, the Nord Stream is a pipe-

line, which represents the main source of supply for countries of north-west Europe [Ar-

dillier-Carras, Boulanger, Ortolland,2012: 161-162]. However, it is isolating such countries

as Poland and several Baltic states since it is not including them in the project. Therefore,

54 / 67

Poland as well as some other EU Member States was against this route. Thus, one Polish

minister likened this route to the 1939 Nazi-Soviet pact that divided Poland [Watson, 2007:

123].

Indeed, this project was very controversial. German authorities headed by Gerhard Schröder

stated that the Nord Stream would help to secure Europe’s supplies [Watson,2007: 123]..

However, even within Germany there was no consensus on this contract. In fact, one week

before the signature of the agreement, German President at that time, H. Köhler, declared that

Baltic countries and Poland should have been taken part in negotiations. Later on, A. Merkel

expressed the same regrets and judged this decision too hurried.

Indeed this new route is rather diversifying transport of gas, but not supplies [Watson, 2007:

123]. So, it is strongly contributing to the increasing German dependence on Russian gas.

However, this gas pipeline is extremely important for Germany due to its high dependence on

Russian gas supplies and it would be impossible today to turn back.

The Nord Stream project has been endorsed by several EU countries, notably Holland, Bel-

gium, Great Britain and France that expressed their interest to take part in this project, as well

as by the EU Commission. As for the EU Commission, when the project of the Nord Stream

had been presented to its examination in 2005, it has strongly backed it. The EU commission-

er for energy Andris Piebalgs and the EU Commission president Jose Manuel Barroso have

publicly supported this project [Smith, 2008: 6]. In consequence, the EU authorities have

allowed to Russia to gain more importance on the European energy market. One could ques-

tion itself about the European strategy, since from one side, the EU authorities are encourag-

ing single energy policy of the EU and, from another side, are endorsing such projects as

NEGP, that aim to bypass several EU Member States and thus, deprive them of their negotia-

tion power with Russia.

Another project presented by Gazprom in 2007 is the South Stream. In fact, South Stream

seems to complement Nord Stream pipeline. It has been conceived by Russia in reply to the

project of Nabucco which ends at the same point that the South Stream. South Stream should

be a second branch of Blue Stream and, thus, would permit Europe to transit 30 billion of

cubes meters of Russian and Caspian gas per year. In this way, this project represents direct

competitor to Nabucco project. Mr Claude Mandil, member of the Board of Directors of To-

55 / 67

tal S.A. and the former Executive Director of the International Energy Agency, stressed in

one interview that “South Stream was designed solely to bypass Ukraine and to deal a death

blow to Nabucco which cumulate disadvantages” [Schneider, Tourtelier, 2009: 39]. The dis-

advantages of Nabucco that Claude Mandil is mentioning in his statement are mostly those

for Russian side. Therefore, Russian side reacted to the Nabucco project which is contradict-

ing its interests with its own project, in its turn opposing the EU’s objective of diversification

of the energy supplies.

Gazprom announced the beginning of works on the South Stream in 2013 and the end in

2015. In fact, this project seems to be less problematic as Nabucco pipeline is. Contrary to

Nabucco project, South Stream does not have volume problem, since it can uses huge Russian

gas resources and eventually Caspian gas [Ardillier-Carras, Boulanger, Ortolland,2012: 173].

The consortium of South Stream is composed of Gazprom, Italian ENI, French EDF and

German Wintershall. These are all large and important gas companies of the EU Member

States. Marcel Kramer, CEO of the South Stream consortium and former head of Gasunie,

the Dutch company which is also associated to the Nord Stream project, has explained that

South Stream is ‘an obvious priority in many EU capitals’ – thereby implicitly admitting that

some EU Member States do not necessarily share the priorities of the EU Commission [Jen-

sen, 2013: 39].

The EU countries that had joined this project argued that this pipeline would increase energy

security, notably those of the South Eastern European countries, which were hurt the most by

the transit crisis that occurred in January 2009. In an article titled ‘Forget about Nabucco’,

Alexander Rahr, the pro-Russian head of the Bertold-Beitz Centre at the German Society for

Foreign Policy (DGAP) and leader of one of the working groups of the Petersburg Dialogues,

claimed that South Stream would provide Europe with ‘an additional guarantee’ [Jensen,

2013: 39].

However, despite these declarations it is clear that the projects of Nord Stream and South

Stream are opposing the EU objective of security of supplies. One only has to look at the

moment when was suggested the South Stream project – immediately after the announcement

of the Nabucco project- or the same point of arrival of both pipelines to understand the com-

peting characters of these projects.

56 / 67

The topic of construction of new pipelines is causing intern divisions within the EU, especial-

ly as some EU Members States such as Italy, France or Germany have already joined the both

projects [Kerebel, Debrouwer, Laborderie, Van de Graaf, 2008: 66]. At the same time, some

countries are taking an ambiguous position. For instance, Germany is backing all of these

three projects. Angela Merkel has asked the EU to support Nord Stream and South Stream in

return to Nabucco. Later, while replying to the criticism of the Nord Stream pipeline, she has

said that for the sake of ‘more independent and crisis-resistant energy supply [...] it is of great

importance that these projects [Nabucco, Nord Stream and South Stream] are politically

wished for and backed by all EU member states’ [Jensen, 2013: 40]. However, realisation of

all three pipelines would result in important excess capacity, which would cost a lot for com-

panies involved in the projects.

Apart from these two project, Russia is also planning further construction of direct pipelines

to new markets, for example the Altai pipeline to China through the short Russian-Chinese

border sector between Kazakhstan and Mongolia or one running from Eastern Siberia to Chi-

na. The Russian projects of direct pipelines are as numerous as those advanced by the EU

authorities.

According to numerous statistics, it is expected that the capacity of Russian transit pipelines

will drop, while the capacity of direct pipelines will grow. In this way, the total capacity of

pipelines from Russia to Europe will increase from the current 200 bcm to more than 400

bcm by 2020, and to about 500 bcm by 2030. As a result, this evolution in construction of

pipelines would result in overcapacity in pipelines towards the EU, while, according to Ro-

land Götz, “ gas exports to Europe are unlikely to grow much beyond 200 bcm” [Götz, 2008:

94]. This means that Russia would increase its power within the European market and would

secure its supplies through numerous transportation routes. On the contrary, the EU would

lose its bargaining power with Russia.

As for the new pipelines constructed on initiative of the EU, their projects are not going

ahead as good as those supported by Russia. Therefore, it will be certainly difficult for the

EU to have a security of energy supply comparable to that of Russia in a near future.

57 / 67

Roland Götz in his article “A pipeline race between the EU and Russia” called current rela-

tions between these two powers a “pipeline race” [Barysch,2007 : 9]. As soon as the EU is

conceiving a project of construction of pipelines aiming at diversification of sources of sup-

ply, Russia is counterbalancing it with another project. The major problem is that Russia is

finding support of some of the EU Member States, as it was the case for Nord and South

Streams. Probably if all countries would oppose these Russian projects, the EU projects of

pipeline’s construction would have a greater support of the EU Member States and, thus,

would be more successful.

Different pipeline’s strategies of the EU Member States also reveal the lack of European soli-

darity in the field of energy security. Solidarity among the EU states would create better co-

operation between the EU Member States. Thus, the interests of some countries such as Po-

land would not be marginalised as it was done in the project of North Stream, but would also

be taken into account, while elaborating the common EU external energy policy. And this

does not only concerns Polish interest, but the interests of all the EU member states. This

would permit to create a symbiosis of all EU Member States’ interests in the field of energy.

The unique pipeline’s construction strategy is fundamental for the common energy policy,

since pipelines are currently the main means of gas transportation. Therefore it is crucial to

make the EU Member States agree on the common priority and pursuit it together and not

separately.

58 / 67

CONCLUSION

This thesis was constructed to analyze the EU achievements in the formation of a common

energy policy towards Russia, which is its main source of energy imports. The study also

sought to explore at what degree the EU Member States' external energy policies differ, in

particular towards Russia.

Since its creation, the EU has been struggling to impose itself as a strong international actor.

Given that energy is a very important issue in international politics and that the EU lacks re-

serves of natural resources and thus, is heavily dependent on energy supplies, it is essential

for the EU to have one common energy strategy with a coherent approach towards its largest

energy supplier, that being Russia. This would give the EU greater bargaining power and

allow it to acquire more weight in energy negotiations.

Nowadays the progress that the EU has achieved in the implementation of its common energy

strategy is visible. It is seen through innovations in the field of energy with the ratification of

the Lisbon Treaty and through different directives, regulations and documents adopted on the

EU level regarding liberalization, greater use of renewable energies and lower emissions,

low-carbon economy with increased energy efficiency, etc. These are in fact permitting the

EU Member States to cope with numerous energy problems together.

The EU established an energy dialogue with Russia, fostering the discussion of their common

challenges and solutions in the field of energy, in which they adopted new documents regard-

ing its “energy security.” However, this EU coordination does not seem to have an impact on

the establishment of coherent coordinated approach of the EU Member States regarding their

cooperation with Russia, which is so important for the EU given that it is the EU’s main en-

ergy supplier. The EU Member States are still developing different, often contradictory ap-

proaches in their bilateral relations with Russia, preventing the EU from speaking with one

voice in its dialogue with Russia.

The EU Commissioner for Trade, Peter Mandelson, stated: “No other country reveals our

differences as does Russia” [Mandelson, 2007: 1]. He was not speaking specifically about the

energy sector, however this statement could certainly be applied to the energy sector. Indeed,

the strategy of Gazprom and consequently of Russian authorities, which could be summa-

59 / 67

rized as “divide and conquer”, is strongly encouraging divisions within the EU by concluding

numerous contracts with European national oil and gas companies and acquiring stakes in

these companies.

The big number of contracts concluded between Gazprom and numerous EU Member States’

oil and gas companies in addition to the divergent pipelines’ strategy of the EU Member

States demonstrate the preference of the EU Member States for a bilateral dialogue with Rus-

sia. These privileged bilateral negotiations of the EU states with Russia and the pipelines’

strategies are guided by the interest of the individual country, private interests and the power

of companies in this sector. In doing so, the EU Member States are not taking into account

the interests and priorities of other EU Member States. It was previously shown that it is

more often the interests of new small EU Member States that are not considered by larger and

older EU Member States. This is in fact translating to a lack of solidarity within the EU re-

garding energy issues and the lack of a common EU energy strategy in the field of external

energy policy.

In this sense, one observes that despite some positive results in establishment of an EU com-

mon energy strategy, there is significant progress yet to be made by the EU in the field of

obtaining more solidarity and cooperation between the Member States. It encompasses exter-

nal dimension of the EU energy policy as well as its internal aspects, because there are sever-

al energy issues such as nuclear power which also have to be addressed together by the EU

Member States. Therefore, the EU needs to deal with both internal and external aspects of its

energy strategy in order to succeed in establishment of a coherent common energy policy.

60 / 67

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