Energy Security and EU Clout

<strong>By Rokas Grajauskas</strong><p>
<em>Contributor</em>
April 1, 2009

Energy security continues to be one of the most pressing issues in Europe. The January Russian-Ukrainian energy conflict left millions of Europeans in the cold again. A very similar albeit milder scenario occurred in January, 2006. Another energy spat took place at the beginning of 2007, this time between Russia and Belarus.

As the main energy supplier, Kremlin clearly uses the energy weapon to spread its influence in Europe. In some cases this takes the shape of outright blackmail, as exemplified by the termination of oil supplies to <a href= "http://europa.eu/">European Union (EU)</a> member state Lithuania after it sold its main oil refinery Mazeikiu Nafta to a Polish and not Russian bidder in 2006.

Only a common EU energy policy will strip Russia of this ability to bring Europeans to their knees. Consequently, it will also give Europe much greater clout in international affairs.

Unfortunately, the <a href= "http://www.economist.com/world/europe/displaystory.cfm?story_id=12009627... has done little to counter such practices</a>. Every time a crisis occurs, the EU steps up its rhetoric and, even calls Russia “unreliable” as an energy partner. But words can only work if they are backed up by credible policies and actions. Europe has done very little to construct policies that would have an effect on Russia’s behaviour.

It shouldn’t be this way. The EU’s economy is 13 times bigger than that of Russia, its population is almost half a billion, and its combined military expenditure outnumbers Russia’s by almost 10 times. And yet, in the realm of diplomacy it is the EU that often appears like a midget and Russia like a giant. As the ‘Power Audit of EU-Russia Relations’ published by the <a href= "http://www.ecfr.eu/">European Council on Foreign Relations</a> indicates, the EU has begun to behave as if it were subordinate to an increasingly assertive Russia. Most recent developments only reinforce this perception. After all, even after Russia’s widely condemned military campaign in Georgia and the recognition of South Ossetia and Abkhazia, Europe was quick to acquiesce to the change of status quo in Georgia. Relations were restored rather quickly in both the EU and NATO; major European countries decided not to grant Georgia and Ukraine the Membership Action Plans, thus cooling their eventual membership aspirations.

The key to understanding European weakness vis-à-vis Russia is its heavy dependence on Russian energy. Russia does not want a unified and strong Europe able to have a significant say in the post-Soviet space – an area Russia still sees as its exclusive 'sphere of influence'. That is why at the end of the day one of the strongest motives behind Russia‘s European policy is fragmentation and weakness of Europe, not its integration and strength. Russia is masterfully using energy as the main instrument of this ‘divide and rule’ strategy.

Separate EU countries, being offered lucrative access to Russia‘s gas and oil market, as well as abundant supplies of gas, do not want to antagonize it, and seek a ‘softer approach’. European companies like E.ON-Ruhrgas, Shell, BP, Total and others are among the most active in Russia‘s energy market making multi-billion dollar profits. And Russia has consistently demonstrated that if things do not go as it wishes, foreign energy companies will suffer first (recall Russia’s decision to go it alone with the Shtokman oil field in 2005). That is why European energy companies, exerting significant influence over their governments, lobby for friendlier and more stable relations with Russia, often at the expense of longer-term strategic interests.

Europe also knows that it will need to import more energy resources (especially gas) in the future. Kremlin therefore understands that it holds major cards in its hands. Russia is playing with Europe by maintaining uncertainty about the geography of its future supplies. It has more than once threatened to redirect its supplies away from Europe and either build LNG terminals or new pipelines to Asia. This further exacerbates European fears and forces them to turn a blind eye to Russia’s behaviour in the shared neighbourhood, the state of democracy and human rights in Russia or discrimination against western companies in its market, etc. In other words, the whole talk about interdependence between Europe and Russia is only theory. When it comes to practice, Russia is able to masterfully use the energy card, drive wedges in the wheels of the EU and block attempts to find a common position regarding the EU’s essential long-term foreign policy interests. Potential European levers of influence vis-à-vis Russia fall into pieces when confronted with Europe’s heavy energy dependence on Russia.

That's why the only way to start breaking this apparent imbalance is for the EU to foster a common (if not single) energy policy. Supranational Europe-wide regulators and institutions should be given a greater role. The European Commission must take a stronger role in efforts to develop alternative energy routes: first of all from Azerbaijan and Central Asia, but from North Africa and other countries as well. Europe must further invest in LNG terminals and help do the same for its newest members. Other measures, such as improving energy efficiency, investing in nuclear energy, and creating incentives for renewable energy technologies – are all required.

An essential piece in the puzzle is liberalization of the internal EU energy market. Only when it has an existing internal dimension, can the EU expect to start acting in a unified fashion externally. Only when there is a Europe-wide regulator and the energy market is integrated and demonopolized, can the influence of external players, such as that of Gazprom, be curtailed. Integration of the energy market would obviously reduce Europe’s vulnerabilities, diminish the role played by major national energy companies and protect it from Kremlin’s ‘divide and rule’ practices.

In other words, the EU’s ability to foster a common energy policy might serve as a function for its greater weight in international affairs. The role of the common energy policy should not be overestimated – it would certainly not be a panacea – but it would be a substantial push for Europe’s international ambitions. Most importantly, it would allow the EU to withstand Russian defiance and reduce the importance of the energy lever that Russia maintains over Europe. It would therefore allow the EU to have a more independent foreign policy, especially when it comes to its eastern neighbourhood. Until now the EU’s ability to project its power in this area has been significantly mitigated by Europe‘s heavy dependence on Russia’s energy resources. Only when this dependence is overcome, can the EU expect to have a bigger say not only in the affairs of the post-Soviet space, but beyond it as well.

<em>Rokas Grajauskas has a Master's degree in international relations from the London School of Economics and Political Science. He works as an analyst at the Centre of Eastern Geopolitical Studies in Vilnius and focuses on Lithuania’s and EU’s relations with partners in the post-Soviet space with special emphasis on Russia.</em>

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