Comments on: Russian and the EU: a choice between the devil and the deep blue sea? http://www.energypolicyblog.com/2009/01/23/russian-and-the-eu-a-choice-between-the-devil-and-the-deep-blue-sea/ Sustainable energy policy, more competition, better regulation, improved policies. Wed, 15 Feb 2012 11:05:26 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Yves YOBOUET, Master Energy Strategy at Mines Paristech http://www.energypolicyblog.com/2009/01/23/russian-and-the-eu-a-choice-between-the-devil-and-the-deep-blue-sea/comment-page-1/#comment-38059 Yves YOBOUET, Master Energy Strategy at Mines Paristech Wed, 20 May 2009 10:06:47 +0000 http://www.energypolicyblog.com/?p=471#comment-38059 Three solutions are possible to improve the E.U gas security of supply: • A redefinition of European relation with Ukraine • The systematic search for new routes of supply and, • The renegotiation with Russia about the safety and security of supplies In my opinion, the predominant part should be the negotiation with Russia in order to reach the accord that such kind of incident will never take place in the future based on the recognized conditions. Since is known to all, Russia boasts an exaggerating quantity of reserve of gas. It leads to the fact that Europe should support projects Northstream and Southstream, covering the sensitive areas of Eastern Europe. As for the other possible candidates of suppliers, Europe would never give up easily some sensitive areas of the world, the Middle East for example. Even though compared with Russia, a country like Iran is not so reliable, since its thirst for nuclear project is never quenched out. On the other hand, the re-modification in terms of relation between EU and Ukraine means something special to Brussels: the ability to save the EU from this gas crisis is a reason strong enough for Ukraine to join EU!! Thus, the entry of Ukraine in the EU will cause repercussion to its neighbors. But first of all, Ukraine should modernize its gas pipeline, since some of which dated backed to the Soviet times. Last but not least, if EU can find some new sources of energy, serving to replace the gas, it will allow the leaders to redefine the policy of energy for the future. Three solutions are possible to improve the E.U gas security of supply:
• A redefinition of European relation with Ukraine
• The systematic search for new routes of supply and,
• The renegotiation with Russia about the safety and security of supplies

In my opinion, the predominant part should be the negotiation with Russia in order to reach the accord that such kind of incident will never take place in the future based on the recognized conditions. Since is known to all, Russia boasts an exaggerating quantity of reserve of gas. It leads to the fact that Europe should support projects Northstream and Southstream, covering the sensitive areas of Eastern Europe.

As for the other possible candidates of suppliers, Europe would never give up easily some sensitive areas of the world, the Middle East for example. Even though compared with Russia, a country like Iran is not so reliable, since its thirst for nuclear project is never quenched out.

On the other hand, the re-modification in terms of relation between EU and Ukraine means something special to Brussels: the ability to save the EU from this gas crisis is a reason strong enough for Ukraine to join EU!! Thus, the entry of Ukraine in the EU will cause repercussion to its neighbors. But first of all, Ukraine should modernize its gas pipeline, since some of which dated backed to the Soviet times.

Last but not least, if EU can find some new sources of energy, serving to replace the gas, it will allow the leaders to redefine the policy of energy for the future.

]]> By: Diana Khuzhina http://www.energypolicyblog.com/2009/01/23/russian-and-the-eu-a-choice-between-the-devil-and-the-deep-blue-sea/comment-page-1/#comment-36344 Diana Khuzhina Fri, 17 Apr 2009 12:59:29 +0000 http://www.energypolicyblog.com/?p=471#comment-36344 The article is reflecting a geopolitical evaluation of the recent gas conflict between Russia and Ukraine from the point of view of a European consumer. It’s interesting to know though and consider quite contrary opinions on this event of the both sides of the main actors of this conflict- the Ukrainian gas transit system “Naftogas” and the Russian giant gas monopolist “Gazprom”. From the beginning the author is wondering about the “habit” of doing “Christmas gifts” of Russia and Ukraine to Europe. I would say that for both of these countries the end of December is still not holidays but working time and the conflict is evidently coming because of the previous contract termination. Moreover the European press is not always being aware of the conflict taking place during the whole year, it’s just in winter the problem is coming sharper. Undeniably the question of gas export is crucial for both Russia and the EU as “the EU is currently importing Russian gas through pipelines of about 120 bcm a year, covering about 25% of its total gas consumption of 480 bcm and it represents about 80 % of total Russian gas exports”. The origin is coming up from the past of the USSR gas pipeline system when most of the “European channels” were constructed through the Ukrainian republic territory although being not always rational decision. Thus in some mass media sources of Russian and Ukrainian emigrants it was already mentioned the fact, that in case of the collapse of the USSR Ukraine will possess enormous advantages and control of the gas delivery in Eastern Europe. The prediction came out to be true in these days and surely the local conflict of gas transition causes relationship problems between Russia and its final customer –the countries of the European Union. According to Medvedev, speaking at a conference on the North Stream project “From its viewpoint Gazprom has called Ukraine “transit blackmailer”. “Gazprom” is called an unreliable supplier, but given the example of the gas conflict with Ukraine in 2006 and 2009. The latter led to a transit stop for two weeks. We have not heard any evaluation of the leaders of EU and the EU Energy Charter. In 2006, the leadership EU, probably afraid of spoiling relations with the “orange” government, tried to avoid those assessments. Similarly, it happened and in 2009”. The Russian president suggested that if the EU leadership will undertake a thorough investigation into the causes of the gas conflict 2009, the membership of Ukraine in the EU would be in question. “Such an investigation would be complete at the same time showing the reliability of Gazprom as a supplier of gas”,-said Medvedev. According to him, Gazprom in the last three years has invested more than $ 30 billion in support of the transmission system of Ukraine. “Unfortunately, our Ukraine partner chose to use its monopoly for Russian gas transit to Europe for a frank blackmail. At the beginning of January, Ukraine opted for a domestic market, forgetting its commitments”, - said Medvedev. However, he insisted that neither political nor economic reasons could be essential for reducing the procurement of the EU countries of the Russian gas. “Even if we do not enter into new contracts, the share of Russian gas to European market grow from 26 to 33% in 2020”, - said Medvedev. He called on the EU countries not to discriminate against the supply of russian gas, as it has no merit. To my mind, the real solution of this for both of the sides is forcing the alternative ways of gas deliverance- by sub sea pipelines of Black sea from the south and Baltic Sea from the north. I agree with the author about the urgency of the diversification of transport risks. The additional transit system will support the permanence of gas transportation and won’t depend on the problems of the “third parts”. However the traditional transport through Eastern Europe should be continued under conditions of negotiation on time not to repeat the previous mistakes. The other point is direct 3 side contracts between Russia, Ukraine and EU so that each bloc has the right to be considered. I would make an accent on this suggestion taking into consideration the latest events of March 2009 when a declaration between Ukraine and the EU was signed in Brussels without participation of Russia. The declaration is mentioning the permission of separation of the Ukraine - Europe gas transporting system “Ukrtransgaz” from the company “Naftogas” having signed a gas contract with Russia before. Thus “Naftogas” can still purchase the gas with discounts from Russia by contract while “Ukrtransgaz” can ask for higher gas transit prices being independent. Quite an obscure step, isn’t it? A small remark for the author is to be added. As reading Russian press I would say that it was rather officially said in every Russian report about the real price for Ukraine- 250 dollars- the price is corresponding to European formula. However the final price came out to be of 360 dollars per 1000m3 taking into account the debt of the last year. The price for the second quarter would be less- about 280 dollars per 1000 m3. Such a statement at a conference in Brussels was made by vice-chairman of Gazprom Valery Golubev (the agency "Interfax" referring to Bloomberg). A concession in the volume of gas imported should be considered – 33 billion m3 instead of planned 40 billion m3. The Russian side is still thinking. In conclusion, every dispute will find its solution by publicity, honesty and justice. This is the way to avoid more conflicts because of misunderstanding and considering just a small side of the problem, accusing the powerful part of being “devil” just because of its truth. The article is reflecting a geopolitical evaluation of the recent gas conflict between Russia and Ukraine from the point of view of a European consumer. It’s interesting to know though and consider quite contrary opinions on this event of the both sides of the main actors of this conflict- the Ukrainian gas transit system “Naftogas” and the Russian giant gas monopolist “Gazprom”.
From the beginning the author is wondering about the “habit” of doing “Christmas gifts” of Russia and Ukraine to Europe. I would say that for both of these countries the end of December is still not holidays but working time and the conflict is evidently coming because of the previous contract termination. Moreover the European press is not always being aware of the conflict taking place during the whole year, it’s just in winter the problem is coming sharper.
Undeniably the question of gas export is crucial for both Russia and the EU as “the EU is currently importing Russian gas through pipelines of about 120 bcm a year, covering about 25% of its total gas consumption of 480 bcm and it represents about 80 % of total Russian gas exports”. The origin is coming up from the past of the USSR gas pipeline system when most of the “European channels” were constructed through the Ukrainian republic territory although being not always rational decision. Thus in some mass media sources of Russian and Ukrainian emigrants it was already mentioned the fact, that in case of the collapse of the USSR Ukraine will possess enormous advantages and control of the gas delivery in Eastern Europe. The prediction came out to be true in these days and surely the local conflict of gas transition causes relationship problems between Russia and its final customer –the countries of the European Union.
According to Medvedev, speaking at a conference on the North Stream project “From its viewpoint Gazprom has called Ukraine “transit blackmailer”. “Gazprom” is called an unreliable supplier, but given the example of the gas conflict with Ukraine in 2006 and 2009. The latter led to a transit stop for two weeks. We have not heard any evaluation of the leaders of EU and the EU Energy Charter. In 2006, the leadership EU, probably afraid of spoiling relations with the “orange” government, tried to avoid those assessments. Similarly, it happened and in 2009”. The Russian president suggested that if the EU leadership will undertake a thorough investigation into the causes of the gas conflict 2009, the membership of Ukraine in the EU would be in question. “Such an investigation would be complete at the same time showing the reliability of Gazprom as a supplier of gas”,-said Medvedev. According to him, Gazprom in the last three years has invested more than $ 30 billion in support of the transmission system of Ukraine. “Unfortunately, our Ukraine partner chose to use its monopoly for Russian gas transit to Europe for a frank blackmail. At the beginning of January, Ukraine opted for a domestic market, forgetting its commitments”, – said Medvedev. However, he insisted that neither political nor economic reasons could be essential for reducing the procurement of the EU countries of the Russian gas. “Even if we do not enter into new contracts, the share of Russian gas to European market grow from 26 to 33% in 2020”, – said Medvedev. He called on the EU countries not to discriminate against the supply of russian gas, as it has no merit.
To my mind, the real solution of this for both of the sides is forcing the alternative ways of gas deliverance- by sub sea pipelines of Black sea from the south and Baltic Sea from the north. I agree with the author about the urgency of the diversification of transport risks. The additional transit system will support the permanence of gas transportation and won’t depend on the problems of the “third parts”. However the traditional transport through Eastern Europe should be continued under conditions of negotiation on time not to repeat the previous mistakes.
The other point is direct 3 side contracts between Russia, Ukraine and EU so that each bloc has the right to be considered. I would make an accent on this suggestion taking into consideration the latest events of March 2009 when a declaration between Ukraine and the EU was signed in Brussels without participation of Russia. The declaration is mentioning the permission of separation of the Ukraine – Europe gas transporting system “Ukrtransgaz” from the company “Naftogas” having signed a gas contract with Russia before. Thus “Naftogas” can still purchase the gas with discounts from Russia by contract while “Ukrtransgaz” can ask for higher gas transit prices being independent. Quite an obscure step, isn’t it?
A small remark for the author is to be added. As reading Russian press I would say that it was rather officially said in every Russian report about the real price for Ukraine- 250 dollars- the price is corresponding to European formula. However the final price came out to be of 360 dollars per 1000m3 taking into account the debt of the last year. The price for the second quarter would be less- about 280 dollars per 1000 m3. Such a statement at a conference in Brussels was made by vice-chairman of Gazprom Valery Golubev (the agency “Interfax” referring to Bloomberg). A concession in the volume of gas imported should be considered – 33 billion m3 instead of planned 40 billion m3. The Russian side is still thinking.
In conclusion, every dispute will find its solution by publicity, honesty and justice. This is the way to avoid more conflicts because of misunderstanding and considering just a small side of the problem, accusing the powerful part of being “devil” just because of its truth.

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