National companies remain in the dominant position and regulatory authorities are under-empowered and lack independence from government and therefore market rules and competition are slowly emerging Dietz et al, ; Padgett, A paradoxical situation emerges due to the unfinished nature of the EU regulatory regime and it expanding these policies Belyi, The partnership model of Euro-Mediterranean EUROMED energy cooperation is a hybrid of multilateralism and bilateralism with flexible political commitments organised on an intergovernmental basis.
In the absence of accession incentives, AA under the ENP provides a far more fragmented and weak platform for energy. While Algeria has only recently, in , officially indicated it was willing to start exploratory negotiations regarding an Action Plan under the renewed ENP, Egypt is committed to its AA and Morocco has expressed significant interest in upgrading its status in the ENP Belyi, ; Padgett, Mediterranean energy producers are less inclined to include market principles. Algeria relies on exports to Europe, but has historically preferred long-term bilateral supply. It has tended to solve issues with the EU through dialogue and consultation around mutual interests Khelil, Furthermore it has resisted institutionalised multilateral relations Darbouche, until recently.
Algeria is sceptical of increased cooperation on gas in particular, is however more open to the creation of a Euro-Maghreb electricity market. In contrast, Egypt which can be seen as an emerging producer of gas, has stronger interests in accessing EU markets and has long-term commitments to liberalise, however the domestic market remains underdeveloped therefore potential for integration is limited. Padgett argues that it looks for individual forms of bilateral cooperation rather than regional agreements, as the latter operate at the lowest common denominator. With aspirations of becoming a regional gas hub, it has issued strong commitment to cooperation in the Euro-Masreq gas market project.
For current energy imports in particular gas, the EU is heavily dependent on Algeria and on Egypt to a lesser extent. Likewise, Paris signing a new bilateral energy treaty with Algeria in shows the prevalence of the bilateral dimension in the relationship Youngs, Not only does this raise questions of reliability, availability and affordability; but it also shows that the EU policy towards Algeria is fragmented and still based on bilateral or a geopolitical approach.
The above has shown that member states are still following a geopolitical approach to energy security, that programmes are insufficiently funded and that the response to increased EU involvement has been inconsistent. Russia has been even more reluctant to conform to EU norms. These treaties establish common rules for energy trade, investment and transit rights based on the EU model. Russia has continued to be resistant of these efforts. Russia has shown little sign of wanting to conform to EU norms Vahl, With the majority of energy companies having signed bilateral deals with Gazprom and governments mainly working with Russia on a bilateral level, it becomes clear that companies and governments have little hope in EU norm transfer, although the EU now has more high-level political dialogue with Russia than any other third country except the US.
While increasingly member states have voiced their opinion of working towards a geopolitical approach. The EU has seen limited success in the form of the European Energy Community, however was less successful in the cases of North Africa in particular Algeria and Russia. This conflict between a market and geopolitical approach can also be identified in the relationship with Russia, where increasingly member states have voiced their concerns.
So clearly fault lines between member states and between the Council and the Commission have emerged. While contrary to this, Lithuanian President Valdas Adamkus, as well as other member states, have argued that while Russia has insisted on approaching energy in such an overtly geopolitical manner, the EU needed to respond in kind Youngs, The politics of creating a single EU external energy policy can therefore be described as a conflict between markets and geopolitics.
It has been shown that on the EU level there is a conflict between markets and geopolitics, that the EU is fragmented internally and in its dealings with third countries. Consequently it is important to understand the member state level to understand why the EU is so fragmented. The previous chapter illustrated the multi-faceted factors involved in Coq and Paltesvas model.
They have developed indicators to highlight the core issue of short term risk of security of supply and dependency in gas, coal and oil markets in Europe. The first group of relatively high index countries is characterised by no indigenous gas resources, mainly importing from non-EU suppliers mainly Russia with gas making up a relatively large proportion of the energy mix.
When looking at the CERE index, Germany, Italy and Spain make up a large proportion of the EU-level risk exposure due to the size of their energy imports relative to other member states. Smaller countries such as Hungary and the Slovak Republic also make up considerable EU-level risk, due to almost entirely importing gas from Russia. Looking at the groups and drawing on Figures 7 and 4 a few general trends can be highlighted.
The first group is made up of Central and Eastern European nations that have traditionally been dependent on Russian gas, in particular pipeline gas supply. The second is made up of countries that are dependent on pipeline gas supply from non-Russian sources as well as on LNG supply Belgium, Portugal and Spain. LNG is generally believed to represents less risk than pipelines, these member states are nevertheless represented with medium-level gas supply risk, therefore within this category we split the group into those largely dependent on Russia and those who are supplied by non-Russian and LNG.
For the purpose of this paper we will be grouping the first two groups into a sub-chapter and the latter two groups into a second sub-chapter due to similarities. Within this group, some countries in particular the Baltics and CEEC have historically been dependent on Russia, and due to limited alternative infrastructure found it hard to diversify their energy sources, although the TEP has worked towards increased integration.
Germany has identified Russia as a long-term partner and has used long-term contracts, joint long-term investments and good political relations to achieve energy security through a geopolitical approach. Having already discussed the two perspectives of Russian energy imports to the EU in chapter 3. Furthermore, on at least three occasions serious threats were issued but no action was taken Larsson, Larsson argues that on at least seven occasions of cut-offs directed at CIS and Baltics, political demands were put forward, while he also argues that all cut-offs are in one way or another a political statement.
Larsson notes, that Russia is less willing to use politically motivated cut-offs against CEEC, although disputed by other analysts such as Smith Smith argues that CEEC and Baltics had been pressured into privatising thus leading to many companies being bought up or controlled by Russian state companies who have favoured Russian gas and secondly giving up unclean or unsafe energy sources too quickly before accession, which has led countries to switch from said energy sources to gas or oil from Russia.
Indeed, he criticises the EU for not funding and supporting new member states to invest in new energy sources and infrastructure. These informal relationships as well as funnelling financial help into friendly political groups has been noted to be especially apparent in the Baltics, however also present in several former Warsaw Pact countries Smith, With the Baltics being most under pressure from Russia, entirely dependent on Russian Gas and Gazprom being the only Gas supplier, the Baltic countries in particular face availability and affordability concerns. Lithuania has forced Gazprom to unbundle its ownership, of both supply and production, through the TEP, and has sold the supply facilities to a polish energy firm.
Lithuania has also planned to build an LNG terminal in Klaipeda to diversify its imports away from Russia towards in particular Qatar Reuters, b. This has created outcry in Lithuania and the government has threatened to sue in the UN International Arbitration Tribunal over the issue. So not only does Russia use supply cut-offs to further its economic or political aims, but it also uses favourable treatment of countries to exert influence and threats.
Still, although Russia has benefited historically from the liberalization and environmental policies of the EU in regard to the Baltics and CEEC, the TEP in particular has allowed member states to reduce the dominance of Gazprom in their energy sectors. Other analysts such as Larsson stress the distinction between the Baltics and former Warsaw Pact members, which have witnessed less Russian intervention.
In the case of Poland, its EU membership is an important factor as Poland has successfully uploaded bilateral disputes to the EU level. However as seen in the Baltics and in other examples, this solidarity has rarely been seen towards Russia. As long as a common and effective EU energy policy for diversification of gas in particular for the Eastern members, is not in place, these states have little choice but to accept Russian prices.
One can therefore not discuss EU Energy policy without discussing German energy security. This section will concentrate on the relationship between Germany and Russia to show that Russian policy is very different towards Germany than towards Baltic and CEEC and even other Western European countries. Putin was also able to gain support among the German people as a result of the unpopularity of the Bush administration and its involvement in Iraq. Furthermore, the guilt factor was relevant as some Germans feel that their country owes Russia more political leeway due to guilt of WWII Smith, Cooperation has been facilitated by specific thematic working groups within the German-Russian Energy Cooperation which was started in , and the German-Russian energy summit.
These close ties are unrivalled by other EU member states, which have increasingly argued for diversification of energy supply from Russia Geden et al, This can be seen in Russian relationship with foreign energy firms operating in Russia. Companies from the UK, US, Netherlands and Japan have had large shares of their energy investments confiscated in Russia, while German firms have been left relatively untouched Smith, This was especially highlighted in her position towards Human Rights, her meeting with Mikhail Kasyanov an opponent of Putin and the more cautious approach taken towards Russia since the Georgian crisis in Timmins, Germany has been the leading opponent of many EU policies on Energy such as the TEP and has resisted liberalizing its market thus allowing other European firms to integrate.
Additionally, Smith shows, that EON and RWE have blocked efforts to build more electricity and gas interconnectors with neighbouring states, which would go some way to alleviate issues of lack of cross-border connection in the EU. Generally, Germany, with France and Italy, has tried to stop energy market reform within the Union, thus preventing greater competition and transparency. Timmermann has argued that the German relationship with Russia will continue to be pursued through the EU and bilaterally.
As we have seen, Germany does not only receive preferential treatment from Russia, but Germany has also blocked increased EU integration and liberalization, and has allowed firms to block efforts to increasingly build cross-border infrastructure. While Central and Eastern states and in particular the Baltics have experienced a completely different relationship with Russia; a relationship characterised by markets dominated by Gazprom, informal links between business and government and Russian Gazprom and government.
So clearly, Russia understands the dynamics within the EU and has set about to gain support from the largest and most important actor in the EU, while working against EU norms and competition law in, especially Eastern states. While Large, wealthier Western states such as Germany, Italy, France and Austria have well developed energy firms with sufficient technical and financial resources and indeed political backing.
To the East however, firms are less established and Russia has more leverage over these. Germany, has therefore shown that it can stand up to Russia and has portrays a willingness to criticise Russian policies. Having shown that certain member states are highly dependent on Russia and the differentiated approach of Russia towards these members, this subchapter investigates the countries under the heading medium and low dependency.
The importance of this group is firstly, that production is decreasing which will lead to increased imports and secondly that they are supplied by LNG. Gas is the second most important fuel in Spain, after oil. However various issues persist which have resulted in its medium supply security risk REES index of 3. Firstly, as portrayed in Chapters 3. Secondly, there is lack of cross-border infrastructure. Spain is connected with Portugal, France and Morocco. The cross-border interconnectors with Portugal have sufficient spare capacity, while the two interconnections with France face congestion IEA, As already noted Spain relies to nearly two thirds on LNG.
Furthermore, Spain has LNG terminals, which are open to third party access, which have increased competition by allowing new firms to enter the market. Three main issues can be identified for LNG imports. Firstly, as shown above the cost of LNG is higher than for pipeline. Thirdly, global LNG markets are becoming more volatile as highlighted in 3.
Spain has the ability to become a European LNG hub, if it were to invest heavily into its LNG facilities as well as interconnectivity with France, thus being connected to other member states. Spain has also seen the positive effects of increased liberalization and competition in its markets. Both Industry and Consumers now have more freedom to choose between companies. Through LNG Spain has been able to diversify its imports.
This chapter has shown the patterns of energy security. To the East states are dependent on Russia. Central and Eastern Europe, and in particular the Baltic States, are most affected by this dependency and have felt the brunt of Russian realpolitik. Germany on the other hand has a strategic partnership with Russia, with German-Russian relations remaining high. German firms are allowed more freedom in Russia and the German public having a positive opinion of Russia, having benefited greatly from the partnership.
To characterise the benefits of LNG imports, we have drawn on Spain to show that LNG has put Spain at the forefront of diversification and therefore does present a viable solution for EU. The aim of this paper was to answer the following questions: Firstly, to what extent the EU presents a coherent external energy policy? Secondly, what kind of gas security pattern can be identified? The overarching EU external energy policy differs greatly between regions, that overall therefore the EU does not present a coherent policy towards energy security.
Its policy, in fact, remains overall weak, insufficiently funded, fragmented and individual member states geopolitical actions have undermined its success. By examining the European Energy Community we have seen that the EU has been able to transfer its own aquis to third countries; yet progress is slow and restricted to those countries which the EU can entice through accession conditionality. In the case of North Africa, especially Algeria, and Russia, the EU has achieved the least success in exporting its norms.
Most importantly however, the prerequisite of having a coherent and well established single market for energy has not yet been met and consequently the project of exporting its norms is severely undermined. Before being able to achieve a coherent Energy Policy, internally as well as externally, member states need to agree on a mixed approach to energy security; an approach that is based on not only the markets, as it is today, but also on geopolitics.
Although this paper has agreed with the EU and Russia being mutually dependent, the incoherence of EU policy towards Russia, the fragmentation of policies — in particular the conflict between German policies and Eastern European policies towards Russia — have undermined mutual dependency and have let Russia become the dominant partner, with the EU being nervous to confront it.
Before the EU can become a coherent energy actor, it needs to achieve consensus between all member states. In particular it needs to act with a single voice towards Russia. For this to be possible the EU needs to be given more responsibility and thus the treaty base needs to be strengthened. As shown the EU currently only has legitimacy to act through a market-governance approach, but to successfully convert its mutual dependency with Russia, it needs to add a geopolitical component. This is indeed necessary so that the EU can prove the benefits of increasing integration. The situation of Eastern countries in particular would be strengthened by this, however in my opinion all countries would benefit, especially in the future when EU supplies are depleted.
The EU has a strong negotiating position towards Russia as a result of their mutual dependency and should take advantage of it. Second, the EU needs to fully implement the single market for the external element to work coherently. Ahrend, Rudiger and Tompson, William, Anduara, Sami, et al, Paris: Notre Europe, March Baev, Pavel et al, Please log in from an authenticated institution or log into your member profile to access the email feature.
The EU's high dependence on external supplies of hydrocarbons is a well-known fact. The EU is the world's biggest importer of primary energy and its portfolio of suppliers is relatively undiversified — Russia is the origin of more than one third of its oil and gas imports. This high-energy dependence and low diversification has long been seen as a thorn in the flesh of the EU's foreign policy. Indeed, the very first steps of European Political Cooperation EPC in the s were marked by internal division and unilateral responses of the nine member states of the European Communities EEC to the —4 oil CQ Press Your definitive resource for politics, policy and people.
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