Is Europe‘s energy independence from Russia possible?

Is Europe‘s energy independence from Russia possible?

By Vadim Volovoj, Doctor in Political Sciences

Russia‘s aggression against Ukraine made Europe consider seriously its energy independence. Most of all Europe is afraid of Moscow‘s unpredictability. Recently Russian President Vladimir Putin has been freely treating international agreements and commitments (e.g. the Budapest Memorandum signed in 1994). Therefore nobody can guarantee that in the context of sanctions to Russia Gazprom will not stop supplying gas to Europe.

 

The North Stream is functioning, the South Stream is under construction, the loss of income is apparent, but, according to Russian political commentator N.Svanidze „Russia treats the world as black and white, via a prism of a zero-sum game, the prism of two players – Russia and America. (...). Yes, now we‘ve done that in Crimea, and now we‘ll “show” to America! This is our revenge for the defeat in the cold war.(...). And everybody is convinced that America is sitting and thinking on how to „settle“ us“. (...) Of course, this increases isolation tendencies. Today it is not us who are isolated, we isolate from others“.

 

In view of the above it is no wonder that Polish Prime Minister D.Tusk urged the EU to increase energy security and reduce dependence of the block on Russian oil and gas and look for new energy suppliers, first of all in the United States. „Once the U.S. decides to export its shale gas, situation on the global energy market, especially in Europe, will change dramatically. This will not only increase security but also promote lower prices“, said D.Tusk.  

 

By the way, during the visit in Europe, the U.S. President B.Obama declared his readiness „to provide all of the natural gas Europe needs on a daily basis“. During the meeting between the EU and the U.S. on energy issues in Brussels the U.S. State Secretary J.Kerry went beyond Obama’s claims, saying the U.S. would be able to supply Europe with more gas than it needs.

 

Everything seems to be in order, but during an interview to the Czech television, American Energy Minister E.J.Moniz said that American gas will not be cheaper than Russian, and first deliveries can be made no earlier than two years. He also highlighted that „supplier would be different and this would put pressure on other gas suppliers‘. He added that here the most important thing is diversification of energy supplies.

 

Besides, according to the survey of the American company „Sanford C. Bernstein & Co“, Europe needs natural gas demand to go down by 15 billion cubic metres annually and invest 215 billion dollars during 5 years to be able to stop purchasing Russian gas.

 

"We considered various scenarios of Europe refusing Russian gas supplies but none of them seem attractive," the company said. "Our conclusion is that 'the cure is worse than the illness' and that Europe's discontent with its dependency on Russian gas will not last long," Bernstein experts think.

 

It seems that major European energy companies („E.ON Ruhrgas“, „Total“ or „Eni“) are of the same opinion. Huge amounts of money were spent on the North Stream and the South Stream, including total investment in Russia and Europe. Is it worth refusing everything in the name of independence which is treated by the business more sceptically than by politicians (some Lithuanian entrepreneurs are afraid of a strict national foreign policy toward Russia)?  

 

So many options and no alternatives? First of all, though American gas will not be cheaper, it is better to deal with a more reliable supplier. Secondly, is a sum of 215  billion dollars per year big enough having in mind long-term investment benefits? For instance, today Russia says that economic sanctions of the West might be useful because the country could undertake actions which have been postponed for many years, for instance, invest to production of goods which are being imported today. Why Europe shouldn‘t do the same in the sphere of energy? Thirdly, Russia says that it is not afraid to lose European consumers for then everything will go to the East. But actually a) Moscow will lose tremendous sums of money and this will significantly endanger its economic security (let alone geopolitical ambitions of Putin), b) Russia will not profit from China as could be the case with Europe, since Beijing, realising its superiority, will negotiate tight prices.  

 

What Europeans could do? First of all, psychosis related to the danger of nuclear energy should come to an end. Secondly, coal options. It is not ecological but there is a possibility to invest to technology improvements and reduce environmental impact.  Finally, it is possible to further develop solar, wind and biofuel energy and use it more effectively.

 

It is always difficult to escape from a convenient reality, change thinking and combat the resistance of dishonest interests. Breakthrough moments are a perfect opportunity to do this. Today Russia mobilises its efforts and hopes that the EU will not dare to pay 215 billion dollars for energy independence; Europe has its pipelines and contracts which shouldn’t be sacrificed in the name of a country like Ukraine. But expensive pharmaceuticals are better than drugs which can cause death. Therefore Europe should „do this now or never!”

 

 

Geopolitika

 

 

11.06.2014

 

 

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