How to react to Russia’s “pipedreaming”

By on June 18, 2016

After a period of hiatus, Russia is again courting several European countries with a series of “pipedreams” whose rationale and sustainability appear dubious, to say the least.

The enthusiasm spread by those projects in many European capitals should be counterweighted by the assumption that Russian energy strategy towards Europe is definitely more politics than policy, aiming first and foremost to build alliances within the continental bloc and prevent the emergence of a coherent and unified position in which legitimate national energy needs meet wider security concerns.

The European Commission is moving into the right direction with a recently proposed legislative package on energy security, but the main responsibility lie with Member States and their willingness to test Russia’s plans and promote enhanced energy security cooperation among them.

The trend

Russia’s intervention in Syria helped the Kremlin to impose itself as a needed strategic actor in dealing with global crises. By restoring its standing in the eyes of the international community after the annexation of Crimea and the war in Southeast Ukraine, Moscow can now recur to one of its most valuable policy tools vis-à-vis Europe: gas and pipelines. In the last few months, Russian and European media reported how Gazprom and Moscow’s officials launched – and, in some cases, re-launched – several “pipedreams” projects, in strong partnership with European governments and energy companies.

That was the case for Nord Stream 2, the redoubling of the pipeline bringing Russian gas to Germany through the Baltic Sea, agreed by Gazprom, E.ON, BASF/Wintershall, Engie and OMV on September 2015 and strongly supported by Berlin – which anyway stressed, rather awkwardly, the need for Russia to ensure supplies and transit fees to Ukraine. The project shed deep divisions among EU members, with many questioning how credible Germany could be in keeping the sanctions against Russia alive while, at the same time, promoting strategic business links with her.

Even more strikingly, talks about the “resurrection” of South Stream have been reported in Bulgaria. Last January, PM Borissov openly stated that his country was ready to negotiate with Russia on the building of the underwater section of the defunct project, enabling “Balkan” – a gas distribution centre to be build in the city of Varna – to receive gas from it, turning the former South Stream into a “Bulgarian Stream” and the south-east European country into a gas hub for the entire region.

Such “South Stream lite” was deemed even more likely given the storm in the relationship between Russia and Turkey over the downing of the Russian jet by Turkish artillery in Syria and the following halt to Turkish Stream, itself an abridged version of South Stream. But even if Moscow-Ankara relations seem at their lowest level in decades, Russian officials recently did not exclude a resumption of the project if their Turkish and European counterparts showed enough willingness.

Last, but not least, South Stream’s shadow is also lingering over the MoU recently signed by Gazprom, Italy’s Edison and Greece’s DEPA to revive the once shelved Interconnector Greece-Italy (IGI Poseidon) with Russian gas carried through either Turkey or Bulgaria. IGI – part of the larger envisioned system of ITGI – was once dumped by the Shah Deniz consortium, which preferred the TANAP/TAP route to bring Azeri gas from the Caspian Sea to Italy.

The state of play

As concerned Member States – Germany, Italy, Greece, Bulgaria – keep following their own national energy agendas, apparently paying just lip service to any proper diversification strategy from Russian gas, the EU is striving to add flesh to an Energy Union which has not gone too far from the rules of the Third Energy Package.

Lacking enough political leverage to impose a clear strategy to all Southern Gas Corridor plans involving Azerbaijan and Turkmenistan, the European Commission is recurring again to normative power, proposing on February 16th a package of recommendations and decisions aimed at imposing – among other things – pre-emptive reviews, approvals and amendments to intergovernmental gas supply agreements between member states and non member states to ensure their compliance with EU laws and their respect of other member states’ energy security.

Although brave and progressive, the legislative proposal seems ill-fated, as Member States sitting in the EU Council will hardly give the Commission such a pervasive power on their own energy security agendas.

Where do we go from here? Russia’s energy strategy towards Europe is definitely more politics than policy. And it is through such lenses that the sudden flurry of “pipedreams” proposals from Moscow should be seen – and coped with. Nord Stream 2 and all the attempts to revitalize South Stream against the EU-sponsored Southern Gas Corridor already showed how effective Russia is in seeding divisions among Member States even without posing a single pipe on the ground.

A proper EU communication strategy is therefore essential in fostering a “reality check” on Russia’s proposed plans of expansion to Europe, especially concerning Gazprom’s real ability to fill those pipelines given its extraction capacity and the plummeting cost of gas.

At the same time, those EU countries more concerned with Russian energy manoeuvres should promote enhanced cooperation – in line with related Treaty provisions and regulations – on energy security issues, like coordination, infrastructure building and collective contracts.

Download: How to react to Russia’s “pipedreaming”


Author: Dario D'Urso
Dario is an international affairs analyst and consultant with years of experience in both government and private sector. Following a year-long collaboration with the Democratization Department of the OSCE Mission in Bosnia-Herzegovina, Dario worked as a researcher for the Rome-based think tank CeSPI, on conflict-related issues in the Western Balkans and on the EU capabilities in crisis-management. He then contributed to several Government, private institutions and media with his analyses on Europe, Russia, Central Asia, the Middle East, Northern Africa, Turkey and Iran, before spending two years in Strasbourg as a Political Advisor at the Council of Europe. His research areas also include energy security, jihadism and geoeconomics.
 

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