Abstract
The central aim
of this paper is to present an intergovernmentalist
evaluation of the prospects for the European Union (EU)
member states to pursue a common energy security policy at
the supranational level. Particularly, the analysis seeks to
address the demands for a common EU stance concerning the
issue of energy supply security. Thus, the paper leaves
aside other cornerstones of a common EU energy policy,
namely the issues of environmental protection and
liberalization of the electricity and gas markets.
Keywords:
European Union, intergovernmentalism, supranationalism,
energy supply security, gas, oil
Introduction
The ever-changing
geopolitics of energy supply to Europe has currently led to
the escalation of discussions at the EU supranational level
about the necessity to define a common EU external energy
policy. From the viewpoint of intergovernmentalism,
a collective EU stance towards the countries which export
energy to Europe depend primarily on the benefits that a
united attitude will provide to individual member states in
the event of a crisis of energy supply.
Intergovernmentalists assert that cooperation is possible
among sovereign states as long as their interests converge.
Beyond question, there are divergences in the concerns of
and options available to different EU member states as
regards the issue of energy supply security. Not only their
diverging energy situations, interests and demands, but also
various distinct webs of relations between the individual
member states and energy exporting countries hitherto
hampered the formulation of a common EU external energy
policy.
The paper first
elucidates the evolution and maturation of energy security
debate in the EU parallel to the progress of the EU
integration project. It analyzes the prime rationale for the
European Commission’s efforts to formulate a common external
energy policy and seeks to comprehend the issues that gave
rise to frictions among the member states.
The paper addresses the conditions that
have so far necessitated transfer of competencies regarding
external energy policy from member states to the EU
supranational level.
The aim to understand the limits of
policy convergence in the sphere of energy necessitates
identification of the member states that are involved in the
discussions over security of energy supply, and parallels as
well as divergences in their interests, mainly concerning
their relations with the non-EU energy suppliers. The paper
addresses these issues and proceeds with reasons for the
European Commission’s incessant promotion of an integrated
response to common challenges. It concludes with a
discussion of the Commission’s limited capacity to further
integration in the absence of collective member state
interests.
Historical Evolution of
Energy Dependency in the EU
The original design
of the European integration project was based on cooperation
in the area of energy. The establishment of the European
Coal and Steel Community (ECSC) in 1951 was followed by the
signing of the Euratom Treaty
establishing the European Atomic Energy
Community (EAEC)
in 1957. Specifically, the focus in these
founding treaties was on energy. Yet the centre of attention
has gradually shifted to economic integration after the
signing of the Merger Treaty in 1965 which created the
European Community (EC) incorporating ECSC and EAEC under
the control of the same set of institutional structures and
additionally creating the European Economic Community (EEC)
to initiate economic integration. Thus, after the creation
of the EEC the member states rather began to concentrate on
closer cooperation in the area of economy. Concerning energy
security, they soon began to follow different paths which
led energy to remain as a state competency. Yet, in the
following decades threats
to the energy security of the EU have escalated
tremendously, as the member states were becoming gradually
more dependent on oil and gas imports.
The risks of excessive reliance on the
non-EU energy exporters first became clear after the 1973
oil shock, when the members of the Organization of the
Petroleum Exporting Countries decided to radically increase
the oil prices. As a result, the economies of the
oil-dependent countries within the EU were deeply damaged.
This incident signified the necessity for new initiatives to
contain the EU’s systematic dependence on oil exporting
countries. Moreover, the gradual replacement of the
traditional private energy companies once known as the
“Seven Sisters” with the National Oil Companies has led
politically unstable countries to steadily become dominant
in global oil and gas production, and eventually constituted
an additional threat to energy dependent Europe.
The oil shock led the Commission to
advocate the precaution that “to reduce the risk of failure
of certain streams of supply, sources must be sufficiently
spread and none must occupy a too exclusive place.”
Yet, the member states responded separately to these
recommendations and the Commission’s role remained limited,
as the member states were extremely reluctant to cede
sovereignty to a supranational authority - despite the
realization that they were vulnerable to blackmail from the
energy providers. Some of the member states opted for going
nuclear (especially France), whereas others chose to start
diversifying their imports.
From the 1990s onwards, the Commission
has underlined the cost-effectiveness of harmonizing energy
supply security policies at the supranational level instead
of administering them nationally.
The Commission has addressed the issues of “strategic oil
reserve, strategic gas storage capacity, emergency sharing
arrangements, and trade and aid deals with foreign
producers.”
But ultimately, the Energy Chapter was dropped from the
Maastricht Treaty of 1992 leaving the Commission yet again
dramatically constrained in terms of its scope of action.
Since the collapse of the
Soviet Union, the Commission has sought to integrate energy
sectors of the former Soviet Union and Eastern European
countries into European markets, and tried to achieve these
objectives with the signing of the Energy Charter Treaty
which entered into force in 1998. The treaty obliged
signatories not to raise difficulties about energy transits
across their territory and to secure the safety of flows
from the established lines. Russia did not ratify the treaty
due to the rationale that third parties would have access to
Russian pipelines. Russia’s decision to refrain from signing
the charter was basically an outcome of its concern to
maintain a dominant position in energy transit to Europe,
through keeping open its option of arbitrary control over
the amount of energy supply. The European Parliament’s
Foreign Affairs Committee has countered the Russian position
about the charter with the suggestion that the EU should not
support Russia’s World Trade Organization membership unless
Russia ratifies the charter.
Yet the ability of the EU level institutions to put pressure
on Russia remained very limited. These limits were proved
when, in January 2006, Russia halted the distribution of gas
to a host of East European countries and also to Germany,
France and Italy.
This event was followed by waves of supply disruptions from
Russia to transit countries and thus automatically to
Europe, including the January 2007 crisis with Belarus and
also in January 2009 when Russia suspended gas deliveries to
Ukraine. Russia has underlined its independence from Europe
in this regard: in the summer of 2009 Russian Prime Minister
Putin proclaimed that Russia will not sign the Energy
Charter Treaty.
All of the above strategies of Russia
have demonstrated that Moscow is resolute to preserve its
power to arbitrarily administer the supply and transit of
energy to Europe. Thus, lately Russian energy policy
strategies have become the most pressing challenge to the
energy security of the EU. Excessive dependence on Russian
supply (more than 50% of overall EU energy imports) and the
energy policy strategies of Russia makes it clear that the
EU should reconsider its links with Russia in the
formulation of a future common external energy policy.
Definition of a Common
External Energy Policy: A Conceptual Clarification
The energy policy of the EU is an integral part of its
foreign policy and there are three main aspects to it:
environmental protection, competitiveness in the internal
energy market and diversification of the security of supply.
Both the issues of environmental protection and the
liberalization of the European energy market, although
indirectly, constitute parts and parcels of the energy
security of the EU member states. The most immediate risks,
however, originate from the problem of ensuring the security
of energy supply from the key energy providers.
Energy dependency is a fact of life for the EU and most of
its energy comes from within the neighborhood. In
particular, the supply of gas has become increasingly vital
to the energy security of the member states. As Umbach puts
it, “the future new capacity will be predominantly generated
still by fossil resources with a rising percentage of gas,
while the number of oil and solid-fuel power stations will
continue to decline” and already being the largest gas
importer of the world, the EU will continue to be the prime
gas importer till 2030.
With respect to the security of gas supplies there are a
number of critical issues that the EU needs to consider. The
necessary infrastructure for the transport of natural gas is
a profound burden that EU energy consumers have to
undertake. For the transport of fossil fuels the transit
countries play an important role. In order to cope with the
threat of energy cuts by key suppliers, it is in the vital
interest of the EU countries to look for pipelines which
would diversify the supply of oil and gas through multiple
sources, if not substitute for the existing ones. The
dialogue between the EU member states and the key suppliers
is another central aspect of the EU’s energy supply
security. A joint policy stance towards the main producers
is progressively becoming a necessity. However, this aspect
of energy security remains the source of some friction among
the member states, as they are unwilling to shift the
administration of energy security to EU-level institutions,
and often prefer to engage in independent energy deals. In
the face of these reservations, the Commission strongly
promotes a concerted position towards the non-EU countries
that export energy to Europe. According to the Commission’s
view such a collective stance would enhance the member
states’ ability to tackle the risks of energy cuts from the
key suppliers.
The issue of ‘external energy policy’, thus, includes the
diversification of energy sources, and the security of
transportation routes, and it calls for a better system to
respond to crises that emerge from the unstable nature of
the international market for fossil energy.
The Main Energy Suppliers:
Dependency on Russia, Algeria and Norway
It is estimated
that the energy dependency of the EU will increase from
current 50% to 70% in 2020, as the EU became the largest
energy market through its enlargement to Eastern and Central
European countries in 2004.
According to the European Commission, dependence on gas
imports will also increase tremendously: it is estimated to
reach 80% in 2030.
However, most experts emphasize the uncertainty of mid-term
challenges till 2030, due to the optimism with respect to
energy security beyond 2030, based on the expectation that
future utilization of renewable energy sources and
techniques would decrease reliance on fossil fuels.
Nevertheless, dramatic dependence on non-EU suppliers
persists, thus making the dialogue between the EU-27 and the
energy exporting countries an integral part of a common
external energy policy.
The nature of the
existing deals between the individual member states and the
energy exporting countries could either foster or discourage
the formulation of a common stance in the EU with respect to
security of supply. The EU could support initiatives in its
discussions with the key suppliers to the extent that the
interests of the individual member states converge. But
above all else, the level of dependence of the EU as a whole
to individual energy exporting countries would determine the
initiatives at the supranational level that call for
adoption of a common external energy policy. Thus, the
levels of energy contributions of key suppliers to the EU
energy market are decisive in shaping the efforts of the
supranational institutions, such as the European Commission,
and ensuing debates about the common EU external energy
policy.
Although the EU has
a complex network of energy flows from multiple suppliers,
Russia, Norway and Algeria account for almost half the EU’s
current gas consumption.
Russia is the leading energy supplier for the EU market.
Thus, energy dialogue between Russia and the EU represents
one of the fundamental aspects of a common external energy
policy. As Beyli argues, “the ongoing EU enlargement to
countries historically dependent on Russia for their energy
supply introduces significant modifications to the EU-Russia
relationships.”
Hence, the enlargement of the EU to Central and Eastern
Europe is expected to considerably alter the economy and
geopolitics of energy links with Russia in the near future.
A gradual increase in Russian dominance over the supply of
energy to European markets would force the EU member states
to reconsider their energy relations with Russia.
Issues of
contention between Russia and its neighbors – Belarus and
Ukraine - and a Russian strategy to periodically put hold on
its gas and oil deliveries to Europe hugely contribute to
the EU’s energy security vulnerability. Ukraine, for
instance, is tremendously dependent on Russia for its energy
supply, and is a key transit country and an important
strategic partner for the EU. According to 2004 figures,
more than 80% of Russian natural gas was transported through
Ukraine to Europe thanks to Ukraine’s pivotal geographical
position.
So any conflict between Russia and Ukraine in terms of the
delivery of natural gas would greatly endanger Europe’s
security of gas supply.
Similarly, Belarus
is another key transit country for Europe and from time to
time political stalemates between Russia and Belarus
culminate in conflicts about energy delivery. As
Bruce notes,
Russia’s suspension
of gas supplies to Belarus in January 2004 “…was the
first time in Gazprom’s
30-year history of gas exports that total cut-off had
occurred on a key transit country.”
Another crisis hit when Belarus rejected higher Russian
prices for 2007’s gas supplies and Gazprom responded by
threatening to halt gas deliveries to Belarus.
In
addition to the challenges that originate from
near-continuous strife between Russia and the transit
countries, Russia also
threatens the EU’s security of energy supply through a
strategy of dominating pipeline projects, which raises
concerns in the EU about the Union’s future bargaining power
vis-à-vis Russia. To reduce its overall energy dependency on
Russia, it is in the best interests of the EU to engage in
the construction of alternative pipeline projects to cut the
Russian monopoly on natural gas deliveries from Central Asia
to Europe. One such project is the Nabucco natural gas
pipeline, which was conceived in 2002 and expected to become
operational by 2015. The pipeline will carry mainly
Azerbaijani gas all the way to Austria, via Turkey. Yet,
there are reservations about the viability of supplies, as
the main supplier will be Azerbaijan and the sustainability
of gas delivery from this pipeline depends primarily on the
Azerbaijani reserves, on the nature of cooperation between
Turkey and Azerbaijan and finally on possible contributions
from other countries involved in this project, including
Turkmenistan, Iraq and Egypt.
Russia, in response, assertively seeks to
fortify its cartel of energy transport to Europe both from
Central Asia and from other energy suppliers in the Middle
East. To counter the Nabucco project and to fortify its
position as the main gas supplier to Western Europe, Russia
has begun the construction of two pipeline projects. In
2005, it started the construction of a gas pipeline across
the Baltic Sea, the Nord Stream pipeline. In 2007, it
announced the start of the construction of the South Stream
pipeline which will provide a new channel for Russian
natural gas transports to Western Europe under the Black Sea
and through the Balkans.
These acts of Russia demonstrate its
determination to remain the EU’s main energy supplier.
According to Zeyno Baran, the lack of cohesion among the EU
member states to develop a common energy policy towards
Russia “…allowed Moscow to preemptively block European
attempts to construct transport routes for Caspian and
Central Asian oil and gas that do not involve Russia.”
Once completed, the new Russian energy routes will supply
the EU with increased amounts of natural gas. However, the
reliance on these routes will increase the EU’s energy
dependence on Russia and the risks that emanate from lack of
diversity of supply. To eliminate these risks, a concerted
approach towards the threat of Russian monopoly and EU-wide
determination to diversify energy routes to Europe is
central to the Union’s future energy supply security.
Algeria represents
another important energy supplier and the EU is the prime
energy market for Algeria since, as the Energy Commissioner
Andris Piebalgs stated, “...90% of its crude oil exports
come to Western Europe.”
Algeria accounts for 10% of the EU’s gas imports and
constitutes the prime supplier for the south-Western Europe.
As Piebalgs underscored, investment by the EU in the
Algerian energy sector is critical to upgrade the Algerian
energy transport infrastructure (through investment in
planned gas pipeline projects of Medgaz, GALSI and a
trans-Saharan natural gas pipeline) and to facilitate energy
exports from Algeria.
Norway, which is
the fifth largest natural gas producer (and third largest
exporter) in the world,
also greatly contributes to the EU energy supply mix and
will continue to do so.
However, some analysts argue that in the long run Norway’s
contribution to the European energy mix will be
unpredictable, given its relatively scarce reserves compared
to Russia and other worldwide reserves.
The current high energy production rates in Norway leads to
the forecast that its exports will decrease within about 30
years.
According to Söderbergh et al., by 2030 Norwegian gas
deliveries to the EU may “even be 20 bcm/year lower than
today’s current level”. Thus, the EU will have to resort to
and become further dependent on other key energy exporters
to meet its rising demand for gas imports which “must
increase by almost 90% by 2030.”
Energy Reviews and
Energy Security Concerns of Actors within the EU
The EU currently satisfies most of its
energy need from the above-discussed non-EU suppliers,
Russia, Norway and Algeria. Increasing energy requirements
bring up the issue of enhancing the export capacities of
these multiple suppliers and routes.
However, member
states adopt different measures while dealing with energy
exporting countries and they have different stances
concerning the issue of whether to support investments in
certain pipeline projects.
The member states’
positions on a common external energy policy towards the
non-EU suppliers are shaped by deviations in their energy
needs and energy mixes, by the variations in their
alternative sources of energy (mostly given their
geographical closeness to different suppliers), and by the
preexisting independently concluded energy deals that they
have concluded with the energy providers.
This paper mainly limits itself to the discussion of the
energy interests of France, Germany and the UK, which
constitute the most influential actors within the EU. The
paper also narrowly refers to the common interests of the
Central and Eastern European (CEE) countries which became
members of the Union with the 2004 enlargement, which is
widely considered to have notably altered the energy
dependency rates of the EU. The paper discusses the
interests of the above-mentioned member states with respect
to their resources and energy requirements and their
relationships with the exporting and transit countries.
Coby van der Linde, Director of the
Clingendael International Energy Programme argues that
“energy supply could not just be left up to the markets as
Member States were unlikely to hand responsibility for
security of supply policies over to the EU given their
differing foreign and security policies.”
In order to understand the reasons why the EU member states
chose to follow diverse foreign and security strategies in
the field of energy, one should primarily analyze their
distinct energy situations. The level of import dependence
varies considerably among member states. Moreover, natural
gas is not easily available to all consumers in the European
market because of the geographical pattern of pipelines and
distribution systems. Northern Europe has greater access to
natural gas whereas countries such as Portugal, Spain and
Ireland will remain outside the European pipeline system
until it is extended to supply them
or until the alternative routes from Algeria become
operational.
France, although conservative on its
current energy supply mix, pushes for a European Energy
Policy (EPP).
Its energy profile is rather mixed, since it exports large
amounts of electricity to neighboring countries and also to
Spain and Italy, relies heavily on nuclear energy and
imports oil and gas from both European and external energy
providers. Its oil imports come from a number of suppliers,
namely the Middle East and North Africa (51%), North Sea
(32%) and Russia (only 23%).
France has also diversified its gas imports which come from
Russia (22%), Algeria (16%), Norway (35%) and the
Netherlands (21%). According to these figures, France is a
net importer of natural gas (95% of France’s gas consumption
is supplied through imports).
However, as already mentioned it supplies its energy need
from various energy providers and the sources of energy that
France utilizes vary to a great extent. Nuclear energy is a
key source for France’s consumption and accounts for 41% of
its total energy supply.
This heavy investment in nuclear energy differentiates
France from other EU members and since the first oil shock
in 1973 France continues to advance its nuclear capability
in order to be able to respond to possible future cuts from
energy exporters. In the face of challenges such as Russian
gas supply cut-offs to transit countries and consequently to
the European markets, different French governments refuse to
shut down the existing nuclear stations in France and
resolutely seek to preserve advances in nuclear power.
Germany relies mostly on Russia for energy resources (one
third of its oil and 35% of its gas). In order to reduce its
imported energy consumption, it continues to invest in
coal-based electricity generation (24% of its total
consumption).
Additionally, around 12% of Germany’s total energy
consumption is supplied by nuclear energy generation within
the country.
However, due to environmental concerns
there is currently a very controversial discussion going on
within the country about withdrawing from the nuclear
industry in the long run. Different governments, however,
proclaim different policies with respect to phasing out the
use of nuclear energy. In 2000, the governing coalition (the
Social Democratic Party of Germany together with the Greens)
decided to gradually withdraw from nuclear energy and some
nuclear reactors in Germany were shut down. However it seems
likely that the current coalition government (consisting of
the Christian Democratic Union and Free Democratic Party)
would delay phasing-out nuclear power production.
If Germany totally withdraws from
nuclear energy, the country will become more dependent on
energy imports, which will be reflected in its stance
towards a common EU external energy policy. In particular,
the special partnership between Germany and Russia in terms
of energy trade, and Germany’s attempts to enhance this
partnership,
reveal the tendency to further develop its independent
long-term contracts with Russia, despite the resulting
reliance on Russian energy exports previously
In the past, The UK has been a
self-sufficient country in terms of energy and is a net
exporter of oil. The UK also exports gas to other EU member
states and some UK governments have supported the nuclear
option. However the problem for the UK is the sustainability
of its production, since its oil resources are increasingly
becoming exhausted. Similarly, its indigenous gas resources
are running out which forced the UK to start importing
natural gas. Thus, through a set of pipeline projects, the
UK has sought to increase its access to gas fields in Norway
and continental Europe. “By 2020 it would be importing as
much as 90% of its gas”
and it will become dependent on multiple suppliers. These
considerations have led to the understanding that the
continuation of the current energy policy would threaten the
UK’s energy security and force it to revise its stance
toward a concerted EU-wide external energy policy.
CEE countries continue to depend on Russia for their energy
imports, since Russia provides natural gas to these
countries (especially the Baltic States) at much lower
levels than the international gas markets. However, Russia’s
decision to apply different price increases to these
countries has annoyed those that have had to defray the cost
of this Russian policy. It is widely argued that the harsh
price increase for Ukraine has economic reasons, but was
also made intentionally to pressure Ukraine politically.
The successive clashes between the two countries have led to
a decrease in gas supplies to Europe, since Ukraine is the
most prominent transit country between Russia and the EU
countries. Energy disputes between Russia and transit
countries noticeably brought to the surface the exposure of
the EU and CEE countries to supply security threats. The
disputes between supplier and transit countries and the fact
that the gas demands of the EU will rise drastically in the
upcoming years can be taken as indications that some member
states will reconsider the Union’s current levels of
dependence on Russia.
Recent Debates and
Calls for a Single Voice on the Supply of Energy
According to the estimates of
International Energy Agency, the energy import volumes of
the EU will increase by 87% between 2006 and 2030.
Apart from the increasing demand in the EU for energy
imports, with the rise of new economic giants like China and
India there is also a growing demand in the global energy
market which would become 40% higher than it was in 2007.
Thus, “Europe is being exposed to
increasingly intense competition for global energy resources
from other countries, and is becoming ever more dependent on
oil and gas imports from geopolitically uncertain regions.”
As a result, besides the existing problem of
unpredictability of energy suppliers, the EU member states
have to deal with rising global competition for access to
energy resources.
These considerations have led the member
states to take a number of steps towards cooperation in the
area of energy. The idea of a common energy policy was
approved at the Hampton Court summit in London in October
2005.
It was stated at the summit that “the EU needs to diversify
its sources of energy and approach its current energy
suppliers in a more coherent manner.”
Following the Hampton Court summit, the European Commission
published a Green Paper on March 8, 2006, which aimed at
identifying the potentials for energy cooperation within the
EU.
The main purposes that were enumerated in
the paper were: completing the internal energy market;
security of supply in the internal energy market;
sustainable, efficient and diverse energy mix; common
external energy policy; an integrated approach to tackling
climate change; and the deployment of a Strategic Energy
Technology Plan. At the European Council summit of March
2006, it was decided that to avoid the negative implications
of energy stoppages from main suppliers, the EU should
strengthen its solidarity and assistance mechanisms.
However, member states chose to preserve their sovereignty
over some key aspects of their energy policies, particularly
the kind of energy they will resort to and the suppliers
they will choose to contract with.
It was agreed in the European Council’s Presidency
conclusions of March 2007 that “…as regards to security of
supply the European Council stresses the importance of
making full use of instruments available to improve
bilateral cooperation of the EU with all suppliers and
ensure reliable energy flows into the Union. It develops
clear orientations for an effective European international
energy policy speaking with a common voice.”
The Presidency conclusions also underscore the importance of
“…member states’ choice of energy mix to have effects on the
energy situation in other member states and on the Union’s
ability to achieve the objectives of the European Policy of
Energy.”
Finally, in the Presidency conclusions of December 2007 it
was stated that “with respect to energy and climate change,
the European Council reiterates the importance of
implementing, in line with its March 2007 conclusions, all
aspects of the comprehensive 2007-2009 Action Plan endorsed
last spring with a view to taking forward the three
objectives of the Energy Policy for Europe: security of
supply, competitiveness and climate change.”
The 2007-2009 Action Plan, as it was referred to in the
Presidency conclusions, outlines a framework of policies and
measures for the member states. It underscores a 20% energy
saving potential for the EU by 2020, which is intended to
facilitate a reduction in the import of fossil fuels. In the
Action Plan it was also maintained that the Commission
should take the initiative to reach framework agreements
with key external trading partners which would cover the
transport of energy.
In 2008, the EU Commission has taken further steps to
harmonize the energy policies of the member states through
recommendation of initiatives in the 2nd
Strategic Energy Review and EU Energy Security and
Solidarity Action Plan. The implementation of the
recommendations in these documents is intended to diminish
and freeze the EU’s external energy dependency at the
current levels.
Yet the ability and willingness of the member states to
follow the recommendations in these documents depends
primarily on their existing energy situations and future
energy supply preferences. As Umbach argues, “the EU-27
member states have largely failed to forge a coherent
European energy security and energy foreign policy strategy
after their Spring summit of 2007 because its declared
political solidarity has been still lacking.”
In December 2007 the EU member states signed the Lisbon
Treaty, which entered into force in December 2009, amending
the Maastricht Treaty of 1992. In its new energy chapter
(Article 194), it was stated that the EU energy policy shall
ensure a functioning energy market and ensure security of
supply to the Union and will also advance energy efficiency
and energy saving within the Union.
It was also stated that the energy policy shall promote the
development of new and renewable forms of energy; as well as
the interconnection of energy networks.
To achieve these objectives, Article 194 also introduced a
new legislative procedure whereby the Parliament and the
Council will act together after consulting the Economic and
Social Committee and the Committee of the Regions. Yet “…the
Member State's right to determine the conditions for
exploiting its energy resources, its choice between
different energy sources and the general structure of its
energy supply, without prejudice to Article 192(2)(c)”
remained intact once again, leaving major aspects of the
energy supply policy as a member state competence.
An Intergovernmentalist
Reading of the Steps towards Common External Energy Policy
Most of the EU member states resolutely
guard their sovereignty over their energy policies,
declaring it a sensitive decision to be taken at the
national level. Today supply security is still an unsettled
issue, as demonstrated by the low level of convergence in
the field of energy given the asymmetrical risk perceptions
and energy mix preferences of the member states. As Stanley
Hoffmann argues, self-interested states are quite obstinate
in the face of European integration.
Classical intergovernmentalists like Hoffmann would argue
that it is the divergences in the interests of the member
states which hitherto prevented the formulation of a
concerted approach towards the energy suppliers. However, in
recent years the heads of governments began to accept the
above-discussed Commission proposals, which some analysts
deem as steps towards the eventual realization of a
European-wide energy policy.
A simple explanation that the
intergovernmetalists would give for the recent level of
integration in the area of energy is that there is a
potential for cooperation among sovereign states, but only
up to a point where they would disagree about the best
course of action. As Hoffmann suggests, when there is a
surge of nationalism in one important issue and when there
are also differences in assessments of the world role of the
new supranational whole, the integration process is destined
to fail.
Some analysts argue that the EU heads of state adopted the
series of Commission proposals with the expectation of
outlining the groundwork for an “Energy Policy for Europe.”
However the path to endorsement of a common foreign policy
on securing energy supplies is complicated, since such a
policy will require political partnership between the EU as
a whole and the energy suppliers.
The EU member
states rather chose to pursue diverse paths to safeguard
their energy situations from risks.
Some member states have established
long-term energy contracts with non-EU energy exporters. For
instance, Germany and Italy have independent bilateral
agreements with Russia in order to guarantee the safety of
supply in the near future. These member states will not be
willing to give up their individual rights to practice
autonomous external energy relations. On the other hand, CEE
countries have long experienced Russian dominance in the
energy sphere. Nonetheless they benefited from the Russian
policy of keeping the energy prices at lower levels for
these former Soviet satellites. Recently, as they face the
challenge of soaring prices, these countries will call on
the EU to curb Russia’s established power over the issue of
energy.
Hence, some CEE countries criticize the states which rely on
supplies coming from Russia, arguing that this increases the
leverage of Russia over EU decision-making policies.
France
responds to the risks of Russian gas
supply cut-offs with a determination to continue investing
in its own nuclear capacity. The UK also went for the
nuclear option, but its governments will be forced to
further reconsider the issue of supply diversity because of
the fact that the UK’s resources, other than nuclear energy
generation, will wear out in the near future. Countries such
as Spain and Portugal, which fall outside the European
pipeline system, do not have easy access to natural gas.
Hence, it is expected that their position with respect to a
coordinated policy on the external energy supply security
will greatly diverge from the other member states.
Thus, the varying energy demands and mixes of the member
states, their different levels of self-sufficiency,
political problems between the transit and supplier
countries, divergences in terms of demand for and
availability of alternative routes for different members
states, existing energy deals, and finally the political
risks associated with alternative suppliers obscures the
realization of a common external energy policy at the EU
level.
Given the divergent
energy interests of the member states, the bargaining among
them in the Council heads-of-states meetings will result in
the approval of the lowest common denominator: that is, the
least objectionable alternative for all the players, as in
these meetings every major policy has to be decided
unanimously. The recognition of a common external energy
policy does not seem agreeable under the current state of
affairs, basically since most of the member states perceive
it as a threat to their national interests and sovereignty.
This tendency of the member states to keep their sovereignty
over decisions concerning energy supply is reflected in the
energy chapters of EU treaties, including the final
amendments introduced with the Lisbon Treaty. These
reservations show that member states are not yet prepared to
adopt a common position in their deals with energy
providers. Hence, as an intergovernmentalist analysis would
argue, the integration in the area of energy is doomed to
freeze unless the national preferences of the member states
converge.
The first question
that liberal intergovernmentalists raise is, what best
explains these national preferences and why do national
preferences vary greatly among the member states? According
to liberal intergovernmentalists, pressures from interest
groups within the member states put constraints on the
policy choices of their governments. This process of
national preference formation at the domestic level is the
demand side of international co-operation.
Parallel to the demands coming from the domestic energy
consumers and producers, states articulate their energy
policy objectives. Hence, the cooperation among politicians
does not reflect the pursuit of geopolitical goals such as
containment of Russia from controlling the EU energy markets
but their policies represent the aim to guarantee
maintenance of least costly supply for their domestic
consumers or the aim to protect their domestic producers
from the risks of competitive energy markets.
Compared to previous theories of the EU,
adherents of intergovernmentalism offer a distinct model for
European integration, consisting of the view that
international relations is a bargaining game between the
states, all of which seek to fulfill the purpose of
preserving their national self interests. Hence, according
to intergovernmentalist accounts, the EU integration process
does not require a sui generis theory and can be
explained with reference to general theories of
international relations.
Intergovernmentalists criticize neo-functionalist theory for
its emphasis on the sui generis nature of the EU,
according to which national sovereignty is “chewed up leaf
by leaf like an artichoke”;
that is to say, every collective EU level decision would
lead to unintended consequences and inadvertently help the
supranational institutions to integrate further. Instead,
intergovernmentalists draw attention to treaty revisions as
critical junctures without which the integration process is
meaningless.
Thus, liberal intergovernmentalists also
underscore the importance of these junctures when member
states debate and decide about how integration will proceed.
States bargain amongst themselves in an attempt to realize
the interest of their constituencies and this bargaining
process is the supply side of international cooperation.
These intergovernmental bargains set the agenda for the
prevailing periods of consolidation
and therefore, the bargaining outcomes help one develop
predictions in the evolution of the EU. In this context a
critical question arises: what best explains the outcomes of
the interstate bargaining? This is the second key issue that
liberal intergovernmentalism addresses.
Moravcsik argues that the bargaining in
the EU is pareto-efficient: that is the gains from the
outcome of bargaining favors one country over the other.
Hence, governments that gain most from a common policy will
be more inclined to offer concessions in order to have their
interests realized. Based on this assumption, it is expected
therefore that the CEE countries will push more for a common
external energy policy. Other countries will also be
compelled in the near future to reconsider the gains of a
common EU stance. Besides, bargaining outcomes are argued to
reflect the relative powers of states. Therefore, the
success of interstate negotiations in producing a common
external energy policy depends largely on the convergence of
interests among the most powerful states. In this respect,
the concerns of Germany, UK and France will be detrimental.
Although the Presidency conclusions in
2007 stressed the importance of improved bilateral
cooperation between the EU and all suppliers to guarantee
energy flows into the Union, some states will be reluctant
to take any action in the near future which would threaten
their previously established deals (especially in the case
of Germany) or any action that would add to their costs in
their cost-benefit analysis. As Moravcsik argues, “the
integration process did not supersede or circumvent the
political will of national leaders; it reflected their
will.”
Thus, states are still “the controlling agents with an
interest in the promotion of degrees of integration.”
What, then, is the scope of action for
the Commission and what is the role that it plays in the
structuring of the energy choices of the member states?
“What best explains the state choices to construct European
institutions and transfer sovereignty to them?”
The role of supranational institutions is the third subject
that the liberal intergovernmentalism considers.
Perspectives on energy security differ among member states
and the Commission has its own vision which contradicts the
interests of some member states. Given the developments
after the adaptation of various Commission proposals, one
could prematurely conclude that integration in the area of
energy is in full swing. However the elimination of the
Energy Chapter from the draft Union Treaty which emerged
from the Maastricht summit meeting in December, 1991
demonstrated that it is still the member states’ preferences
which are going to shape the future of integration in the
area of energy.
This decision also set the parameters for
the Commission’s future ability to maneuver on supply
security matters. The Commission has made several efforts to
achieve progress in energy talks with Russia and other
energy-producing and transit regions, and delineates several
foreign policy objectives in its Action Plans and Energy
Reviews. The new office of the High Representative for
Common Foreign and Security Policy and the individual member
states have begun to engage in dialogue with the
energy-providing countries in a more explicit manner.
Yet, when it comes to taking coordinated action, member
states are truly reluctant. Their disinclination to
harmonize policies on the issue of energy is also
discernible from the amendments made to existing EU
treaties. As previously discussed in this paper, the energy
chapter of the Lisbon Treaty has additional clauses that
provide member states with the ability to keep supply of
energy as a state competence. In the Presidency conclusions
of the Council meetings, issues related to energy are
phrased in such a way as not to intimidate different
national interests. It is fair, therefore, to conclude that
energy policy is still by and large a realm of the
individual states, which is shaped mostly by the interests
of the domestic interest groups (domestic energy consumers
and producers), and to a certain extent modified in the
course of bargaining between the asymmetrically
interdependent states.
Conclusion
It is natural that each member state will
work on its own national supplies but it is also vitally
important to maximize coordination for transparency to be
achieved in the internal and external energy markets.
Speaking with one voice towards the countries that export
energy to Europe not only enables the EU to secure supply on
behalf of the EU market but it also represents a real
opportunity for the EU to present a sustainable vision to
the world. However, as this paper shows there are internal
discords within the EU concerning a united attitude towards
the energy exporters.
The disagreement among member states on
the issue of external energy policy coordination is mainly
the result of different national preferences of the most
powerful states and the ensuing nature of interstate
negotiations, which produce the least objectionable outcome
for all the players. Coordination of the external energy
policies of the member states seems unattainable for the
time being, as a common external energy policy does not
represent the lowest common denominator for all the EU
member states.
If key member states relentlessly oppose
the formation of a common external energy policy,
controversial aspects of the Commission proposals are
destined to be turned down. Germany appears reluctant to
take any concerted action which would antagonize Russia. The
UK and France will be averse to renounce their nuclear
activities. These different choices of the powerful states
will prevent any radical departure from their current
policies, given their bargaining powers under the EU
decision making structure.
The need to diversify energy networks
is a big challenge for the individual member states in the
shadow of risks emanating from the policies of the supplier
countries. Russian gas will remain the leading supply source
for the European energy markets. Hence, the EU member states
will require better mechanisms to respond if another crisis
between Russia and transit countries hits Europe. Yet the
formulation of a common EU wide external energy policy is a
pressing challenge as it threatens state sovereignty and is
regarded by the EU member states as a loss of competency to
the supranational level. Therefore, integration in the area
of energy seems to remain highly intergovernmental in the
absence of a collective EU position about a common external
energy policy which transcends national interests. As the
current levels of integration in the field of energy and
continuing divergences in the external energy policies of
the member states reveal, there remains the unwillingness to
cede sovereignty to EU level institutions regarding the
relations with the energy providers. This paper projects
that a concerted approach towards the energy exporters is
unlikely so long as the energy security interests of the
member states diverge.