August 6, 2008

English summary

This issue of Diplomaatia is devoted to the problems of energy security, the main focuses being the planned new underwater gas pipeline from Russia to Germany, the recent “gas war” between Russia and Ukraine, and more generally the reliability of Russia as an energy exporter.

This issue of Diplomaatia is devoted to the problems of energy security, the main focuses being the planned new underwater gas pipeline from Russia to Germany, the recent “gas war” between Russia and Ukraine, and more generally the reliability of Russia as an energy exporter.

English summary

This issue of Diplomaatia is devoted to the problems of energy security, the main focuses being the planned new underwater gas pipeline from Russia to Germany, the recent “gas war” between Russia and Ukraine, and more generally the reliability of Russia as an energy exporter.
Diplomat Raul Mälk and energy expert Einary Kisel give an overview of the issues related to energy security and discuss the state of affairs in Estonia and the EU. “In energy terms, Estonia is one of the most independent states in the EU – only 31 % of its energy needs are covered by imports, which ranks Estonia 5th lowest in the Union,” notes Kisel. At the same time, Estonia imports 100% of the gasoline and natural gas that it consumes.
Both experts acknowledge that in today’s world, as far as energy issues are concerned, politics and business have stepped out of their traditional roles. On the one hand, states may find it hard to deal with huge energy corporations that are profit-oriented and do not think of maintaining a reliable and affordably priced energy supply to a state. At the same time, many energy firms are owned or controlled by states and can be used as foreign policy tools against other states. Therefore, “it would be wise to include more foreign and security policy experts among the people in charge of Estonia’s energy policies,” suggests Mälk, finding the work on energy security that Estonia has done to be clearly too little, especially given the seriousness of the situation.
How dangerous it is to rely on Russia as an energy supplier, is the questions asked by many authors in this issue of Diplomaatia. The answers they give, however, are different.
Zeyno Baran, an energy analyst with the Nixon Center in Washington, warns that “if Gazprom succeeds in taking over the Georgian gas network and the Ukrainian Gas Transit System (GTS), then Russia will be able, at will, to raise and lower energy prices in Europe. The fact that Russia has in the past been a reliable gas supplier to Western Europe is meaningless; Russia has never had the kind of power it has recently acquired and we simply have no precedent to help us determine how it will use this power.”
Baran suggests that “given that Gazprom will for the foreseeable future be the leading natural gas provider to the EU, European gas consumers, as well as transit states from the East such as Georgia, need to form a market-based, commercial relationship with Gazprom. Forging such a relationship requires that all these states strive for increased competition in gas supply and transit arrangements, and circumscribe Gazprom’s monopoly power.”
Fiona Hill, a Russia expert with the Brookings Institution, agrees that more market-based relations to guide the trade in energy are the desired outcome that national and EU policy-makers should aim for. But according to her, there are two sides to Europe’s energy dependence on Russia: “When it comes to Russia itself, the fact that Russia’s primary interaction with European and other markets is through oil and gas is a considerable source of weakness. /—/ The future of the Russian economy is now entwined with the future of the world energy market, and Russia is thus vulnerable to exogenous shocks. /—/ As a result, Russia is, itself, highly dependent on Europe as the primary consumer of its energy product, not just the other way round. /—/ Many Russians fear that Europe will collectively turn away from Russia toward other regional piped gas suppliers and sources of LNG in the Middle East and North Africa, before Russia has been able to develop other markets for its energy.”
The fact that being the dominant energy supplier to Europe leaves Russia with more policy dilemmas and less freedom of action than one might think is also a message from Fyodor Lukyanov, the editor of the journal Russia in Global Affairs. “Moscow can radically rethink its place and role in the world, by making a stake on demonstrating itself as a trustworthy energy partner to the entire developed world. Or it could use energy as a weapon and try to mount an offensive to restore its former position in relation with its neighbours. Russia of course would like to do both simultaneously. But that is just not possible,” argues Lukyanov, bringing the latest gas crises with Ukraine as an example. An attempt to pressure Kiev raised doubts about Russia’s behaviour as a supplier and at the same time Russia discovered that using energy as a weapon was also technically difficult – for that it would have needed a more developed transport infrastructure, but its clumsy attempt to use force raised doubts in Europe about the wisdom of creating additional supply lines to such an unreliable partner.
Bernd Posselt, a member of the European Parliament from Germany condemns the decision by former German Chancellor Gerhard Schroeder to accept a job with the German-Russian natural gas pipeline consortium. Posselt also suggests that in order to safeguard Europe from all kinds of unpleasant surprises by Russia – like the one Ukraine recently was presented with – Europe needs not just a common energy policy, but also a common foreign policy, including a Russia policy. The latter, in turn, must not involve keeping silent about Russia’s shortcomings in the hope to secure reliable energy supplies: “by not calling repression repression and human rights abuses human rights abuses we will do Russia a great disfavour.” Tolerating Russia’s dictatorial tendencies would be wrong, regardless of whether we are talking about the Kremlin’s domestic or foreign policies, because “a monopoly in the end kills the monopolist, exactly the way a dictatorship kills not just its victims, but in the end also the dictator.“
Kaarel Tarand, the editor-in-chief of Sirp, has his own view on the Russia-Germany pipeline – in his opinion, Germany’s real goal is to buy some peace and stability in Russia by allowing Russia to sell the only good it has to offer. But Tarand doubts whether, considering its size, it would be wise for Estonia to join Germany’s noble enterprise by increasing Estonia’s purchases of Russian gas.

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