Abstract
The article discuses Russia’s
aggressive energy policy towards the EU and the former
Soviet republics, with its main goal of reinforcing the
country’s monopoly over the transportation of oil and,
especially, gas to the West. The language of “alternative
pipelines” is used by Russia in the context of the “Pipeline
Cold War” paradigm which creates significant problems for
the energy safety of the EU by increasing the energy
dependency of European countries upon Russia. In reality,
the energy resource users are interested in a systematic
supply of these resources. This can be achieved through the
diversified resource producers and development of a mutually
supplementary network of pipelines which should minimise the
opportunity for using the energy resources for political
purposes. This is the idea upon which the “pipeline
harmonisation” paradigm is founded. The Western countries
have a key role to play in the realisation of this idea.
Keywords: Russian energy
politics, EU’s energy dependency, alternative pipelines,
pipeline cold war, energy supply harmonisation
Introduction
With the growing demand, the supply of
natural gas to the EU countries is becoming a subject of hot
debates. More than 80 percent of oil and approximately 60
percent of natural gas consumed in the EU are imported.
Furthermore, imports of energy resources have noticeably and
steadily increased over the last years. The EU’s energy
dependency in 2008 accounted for 53 percent.
Russia’s share in the structure of the EU’s growing energy
imports has been significant such as, for example, in 2008
when Russian oil imports to EU countries accounted for 33
percent of all EU oil imports and the share of Russian
natural gas reached as much as 40 percent of all imports.
The growth of the EU’s dependence on
Russian energy resources has been exploited by the Russian
leadership as an effective tool for putting political
pressure not only upon the EU members but also upon the
countries whose territories are crossed by the energy
transportation routes such as Belarus and Ukraine.
In this context, searching for and the
development of all potential (i.e., not only Russian)
sources of oil and natural gas and ways for their supply to
EU countries has become an issue of particular importance.
Paradigm of the
“pipeline cold war”
One of the most significant deposits of
hydrocarbons are those located in the Caspian region and, in
particular, the countries of Azerbaijan, Kazakhstan and
Turkmenistan. It is important to note that any energy
resources located beyond Russian territory, which in
principle could be supplied to the West, have been modified
by adjectives like “alternative.” This kind of language,
consciously or unconsciously, presents a reflection of
confrontation between Russia and the rest of the world on
energy related issues. This very controversy became a
starting point for the emergence of “pipeline
confrontation”—or even of “Pipeline Cold War”—between
different countries of the EU and Russia and even between
different countries of the EU itself. The same controversy
prompted some countries or groups of countries in the EU to
forget and even disregard the interests of the other EU
countries and to develop their own individual plans for the
transportation of natural gas from Russia.
By means of stereotypical mentality, this
very idea of alternativeness has also been extended to the
pipelines. In relation to the Russian pipelines of the
western direction, the label of “alternative pipelines” has
been attached to those which cross the territories of
Azerbaijan, Georgia and Turkey; namely, the pipelines
Baku-Tbilisi-Supsa (BTS), Baku-Tbilisi-Ceyhan (BTC) and the
South Caucasian Pipeline (SCP). The accuracy of such an
evaluation, however, becomes questionable if one takes into
account the fact that the quantity of oil transported
through those pipelines does not make up more than ten
percent of the oil exports from Russia. With respect to the
natural gas transported through the SCP, the situation is
even worse. Its capacity accounts for just two percent of
the Russian natural gas exports. Consequently, neither the
BTS and the BTC pipelines nor the SCP could be regarded as a
good alternative to the Russian pipelines.
Russia has done a lot for inciting the
“Pipeline Cold War” and its motivation is more than
apparent. One expert, for instance, does not exclude the
possibility of Russia restoring the empire, although not in
the classical way by means of seizing territory, but by
using so-called neo-imperialistic mechanisms based primarily
upon energy policy.
Here we should also note the interconnection in Russian
policy in the post-Soviet expanse between energy dependence
and political independence when an increase in the first
causes a decline in the second.
The purposeful movement towards creating an energy empire is
of particular importance to Russia
which is largely based upon Putin’s myth of Russia’s
establishment as an “energy superpower.”
As a result, Moscow’s energy policy is promoting the
formation of a new economic imperialism which applies not
only to the outside world but also to Russia itself and its
domestic economy.
It is also worth regarding Russia’s energy strategy in the
European vector in this context.
Russia has been trying to maintain and
strengthen its monopolistic position in a number of
directions and, most of all, in relationships with the EU
countries.
Let us recall the events of more than a decade ago when the
issue of the transportation of Azerbaijan’s early oil
exports through Georgian territory was to be decided. At
that time, Russia opposed the implementation of the BTS
pipeline project and strongly campaigned for dispatching
Azerbaijani oil exclusively through the Russian port of
Novorossiysk. In view of the limited capacity of this port,
owing to harsh climatic conditions as well as the fact that
the pipeline route should have crossed the territory or the
immediate vicinity of the conflict zone in Chechnya, common
sense prevailed and both routes—Russian and Georgian—were
chosen as ways for the transportation of early oil exports.
As a result, all parties of the project won because the
pipelines served as supplements rather than as alternatives
of each other. Unfortunately, Russia never admitted this
fact and continued its extensive (but abortive) attempts to
block the execution of the BTC and the SCP projects.
Not only did the Russian side not want to
develop a transportation corridor through Georgia or build
pipelines in its territory, it was willing to use every
possible means to prevent the implementation of these
projects.
This evaluation of the Russian position with respect to the
transportation of Caspian energy resources through Georgia
was confirmed during the Russian-Georgian war in August 2008
when Russian aviation also bombed the direct vicinities of
the pipelines which pass through Georgia
and located far from South Ossetia whose protection was
supposedly the reason this war was begun. This cast doubt
not only upon the security of the transportation corridor
through which pipelines pass across Georgian territory
but also increased the danger of Azerbaijan losing its
economic independence.
Fortunately, it did not take long to restore confidence in
transporting energy resources through Georgia.
In addition, the fact that Moscow was unable to realise its
goal of establishing control over these pipelines by
military means—that
is, to fully monopolise the transportation routes of energy
resources from the former Soviet Union in the westerly
direction—prompted
the Americans and Europeans to step up their efforts even
more in order to find ways to develop alternative routes for
transporting oil and gas by circumventing Russia.
Ankara, Brussels and Washington, therefore, are particularly
interested in raising the security of the existing pipeline
system in Azerbaijan and Georgia.
It is also important that Kazakhstan, despite its close
relations with Russia, is also very interested in the
security of the transportation corridor passing through
Azerbaijan and Georgia.
One way or another, the Caucasian energy corridor is one of
the main problems facing the US administration.
At the same time, many states interested in diversifying the
pipeline network have also increased their efforts in this
area.
Each new gas transportation link can be
considered as need of the growing EU market but, at the same
time, there is a fear that European energy security will be
affected for years to come if Russia builds a strategic new
pipeline to Europe; that is, the North European Gas
Pipeline (NEGP).
It will make Russia even more powerful and strengthen its
hold over the European gas market. It has the potential to
increase the dependence of the EU upon Russia if any other
pipelines are not promoted. The key problem for the EU,
therefore, is to design more pipelines to meet the
countries’ permanently growing requirements for energy. In
this respect, any debates in the context of the alternative
pipelines means a prioritisation of any of them and a
refusal from others.
A rival alternative route has been
accredited within the Nabucco project. With the promotion of
the Nabucco pipeline, Iranian gas became the fuel of choice
although it does not make for rival non-Russian options to
the EU gas market. Accordingly, the “Pipeline Cold War” is
identifiable only for the justification of Russia’s energy
policy and aggravated by the fact that Russia has hitherto
not ratified the Energy Charter. This treaty would require
Russia to allow other participant countries direct access to
its excess pipeline capacity. This would effectively break
up Russia’s monopoly upon gas pipelines to Europe. Russia is
still an independent player in the energy market. Russia has
been trying to maintain and strengthen its monopolistic
position in a number of directions and, most of all, in
relationships with EU countries. Any attempt to integrate
Russia’s policy into the EU energy formation has been
predestined to fail.
Russia, being guided by a so-called
energy egoism—as a component of the traditional Russian
nationalist view of the world—is
trying in every way possible to dominate the energy sphere
in the Caspian basin.
From “alternatives” to
a “harmonisation” of Energy supply
The time has come to shift from the
paradigm of “Pipeline Cold War” with the language of the
“alternative pipelines” to an essentially new one in the
form of “mutually supplementary pipelines” or a so-called
“pipelines harmonisation.”
In that case, all of the pipelines which have hitherto been
considered as alternatives to each other will present
themselves in quite a different context in which they will
be regarded as distinct components of the same organic whole
or as a system of pipelines serving one common goal; that
is, to provide an uninterrupted and consistent supply of
energy resources to their customers.
The purpose of the “pipelines
harmonisation” is to develop a partnership mechanism to
facilitate and harmonise support given to energy suppliers
in response to the identified needs of individual countries.
The harmonisation of routes is about resolving alternative
plans through respectful dialogue. It is about taking into
account each country’s concerns and elaborating plans and
solutions which deal fairly with all those concerns. It is
about reaching a consensus for multiple pipelines.
Within the framework of this new paradigm
of “pipelines harmonisation,” the issue of the
transportation of the Caspian energy resources to the West
could also be reconsidered in a new context. Specifically,
the BTC and SCP could play an important role in the
harmonisation of oil and natural gas supplies to the EU
countries in addition to the Russian pipelines.
In this connection, one should mention
two important agreements which were reached in 2007 and
which should be regarded in the context of the “pipelines
harmonisation” rather than “alternative pipelines.”
Specifically, on 24 January 2007, Kazmunaygaz and the
contractors in charge of development of the Kashagan and
Tengiz oil fields signed a Memorandum of Understanding on
building the Kazakhstan Caspian Transportation System aimed
to ensure transportation of the growing amounts of oil
exports through the Caspian Sea.
Under this agreement, oil would be transported through the
route of Eskene-Kurik-Baku-Tbilisi-Ceyhan and which further
implies the building of the Eskene-Kuryk oil pipeline. The
Trans-Caspian Transportation System would include oil
discharge terminals along the Caspian coast of Kazakhstan, a
tanker fleet, oil-loading terminals at the Caspian coast of
Azerbaijan and integration with the BTC pipeline
infrastructure.
On 15 March 2007, Russia, Bulgaria and
Greece signed an intergovernmental agreement to build the
Trans-Balkan Oil Pipeline, Burgas-Alexandropolis, which
would begin in the Bulgarian Black Sea port of Burgas and
end at Alexandroupolis on the Greek Aegean coast.
Both projects may be regarded as examples
of the harmonisation of oil transportation in the Western
direction. The EU should focus attention upon considering
the above projects not as alternatives but, rather, mutually
supplementary ones.
The problem looks to be even more
pressing as far as the transportation of natural gas to the
EU countries is concerned. The Russian giant Gazprom has by
all means tried to achieve the approval of the pre-Caspian
gas pipeline construction project for the transportation of
natural gas from Kazakhstan and Turkmenistan to the West.
The efforts of Russian political circles to this end have
been hitherto quite successful. Key agreements with the
political leaderships of Kazakhstan and Turkmenistan have
already been accomplished. The key obstacle in the way of
the realisation of this project might be the fact that it is
still unclear whether or not the Russian gas transport
system will have an adequate spare capacity to receive new
volumes of Central Asian gas. The existing Russian gas
transport system is inadequate even for exporting larger
volumes of domestically produced Russian gas.
As to the Trans-Caspian pipeline, which
later could be connected with the SCP, the potential for the
implementation of this project remains unclear not only
because of the well-known political problems
but also the fact that the relevant countries have not yet
achieved any agreements with respect to the legal status of
the Caspian Sea. Moreover, a decision as to the potential
investors of the Trans-Caspian pipeline project has hitherto
not been made.
The Trans-Caspian gas pipeline is
associated with the Nabucco gas project. This is the route
Turkey-Bulgaria-Romania-Hungary-Austria. Potential gas
volumes for Nabucco could come from Azerbaijan, Turkmenistan
and Kazakhstan as well as Russia, Iran, Iraq and,
potentially, other Persian Gulf producers. In this case,
Kazakhstan will be the key onshore harbour for Central Asian
gas supplies for the updated Trans-Caspian gas pipeline.
Nabucco’s main competitor and, at the
same time, that which is “mutually supplementary,” is the
South Stream gas pipeline.
Along with Nabucco there are two other
projects proposed to convey Caspian gas to European markets.
The first concerns the Turkey-Greece-Italy (TGI) pipeline,
which is a win-win project between Turkey and Greece
delivering Azeri gas to EU markets,
and the second is the White Stream gas pipeline.
Both of these projects can also be considered as “mutually
supplementary” to Nabucco.
The issue of the harmonisation of gas
supply to Europe requires the EU to take all possible
efforts for the realisation of the Trans-Caspian and the
Nabucco projects which, together with the other existing and
potential gas pipelines, will lead to the substantial
mitigation (if not removal) of the problem of the
monopolistic gas supplier and also ensure a stable and
balanced flow of natural gas to EU countries.
Obstacles for the
harmonisation of gas supply
As far as Nabucco will provide a gas
supply for Europe through the Trans-Caspian gas pipeline,
bypassing Russia, it is not surprising that the activation
of the Nabucco project encounters major difficulties from
Moscow through attempts to prevent the project by exerting
pressure on Azerbaijan and Central Asian countries.
Russia needs the EU as an importer as
much as the EU needs Russia as an exporter. This
interdependence might be used to enhance the EU’s ability
to secure greater Russian compliance with the rules and
norms of the global energy market. Putting an end to the
“Pipeline Cold War” and ensuring the harmonisation of the
energy supply is essential for market stability.
The EU is looking to transport natural
gas from the Caspian Basin and Central Asia but these
regions are still marked with high levels of political
instability and, therefore, are less reliable as suppliers.
Russia’s geopolitical interest and influence in these
regions prevails over those of the EU and this creates a
very advantageous position for Russia to capture the lion’s
share of the European gas market with projections of
increasing its share to roughly 60 percent by 2030.
Russia continues to
express its interest in keeping the Caucasus, as a main
energy root for the EU, a zone of frozen conflicts. Russia’s
war in Georgia in 2008 also created the fear of political
complications between Russia and the EU.
Any attempt to unfreeze the conflicts in Nagorno-karabakh is
a risk which would enable Russia to gain even more military
power in this region.
Taking into account that Western
countries have only partially supported Georgia’s desire to
integrate into Euro-Atlantic structures and allowed Russia
to break its sovereign territories and increase its military
influence, Azerbaijani officials have chosen to implement a
prudent national policy of not aggravating its relations
with Russia which has a strong influence upon the
Nagorno-Karabakh conflict. In addition, Russia, has
attempted to force Azerbaijan to sell all its extra gas to
Russia at European prices. A more dramatic aggravation of
the situation will lead Azerbaijan to export its gas in the
Russian direction which can be more politically secure and
economically attractive as well.
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At the
negotiations between the State Oil Company of Azerbaijan (SOCAR)
and Gazprom in January 2010, heads of these companies agreed
to double the amount of gas which Azerbaijan exports to
Russia instead of the previous agreement of October 2009 for
the delivery of only 500 million cubic metres. SOCAR has
already been contracted to deliver one billion cubic metres
of gas to Gazprom in 2010 according to global market prices
and under the newly signed deal whose amount will increase
to two billion in 2011.
Azerbaijan’s decision to increase gas exports to Russia
stems from SOCAR’s plans for a diversification of export
routes.
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At the
same time, Azerbaijan has negotiated a long-term contract
with Iran to increase Azerbaijani gas sales to the country
and upgrade the existing pipeline which is another way to
diversify Azerbaijani gas supply.
In both cases, the question arises as to exhausting the
future importance of the Caucasian transportation routes.
The key for safety and security in the
Caucasus as concerns energy transport lies along the
relationship between the West and Russia. There are many
things which should be done by the EU towards seeking an
increased self-confidence and cohesion of its policy with
Russia. At the moment, however, no concrete steps are being
taken to this end.
The future of pipelines which will supply
Caspian energy to the EU is still unclear.
The design of each new pipeline is considered as being a
rival to Russia and a challenge which makes for serious
pressure being exerted upon supplier and transit
states—especially countries like Georgia and Azerbaijan—and
aggravates “Pipeline Cold War” and hampers any attempts at
harmonising gas supply to the EU.
Conclusion
The “Pipeline
Cold War” is only a reflection of the contradiction between
Russia’s desire to have influence upon the former Soviet
territories and the EU’s wish to have more oil and gas from
these countries. The EU still designs new pipelines without
any real actions to prevent Russia’s aggressive energy
policy in the Caucasus and Central Asia.
Currently, the need to say no to the
“Pipeline Cold War” paradigm and yes to an introduction of
the “pipeline harmonisation” paradigm is more than apparent.
The language of “alternative pipelines” also needs to be
replaced with the language of “pipeline harmonisation.” Only
the “harmonisation” paradigm secures that the interests of
all producer, transit and user countries of oil and gas be
protected to the maximum extent possible. In view of this,
the efforts of the West to persuade Russia of the necessity
of replacing the language of “alternatives” with that of the
language of “harmonisation” acquires a special significance.
(pp. 103-111)