energy security

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A glimmer of hope

Jul 12th 2007
From Economist.com

The struggle for energy independence from Russia

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WESTERN failures in recent energy tussles with Russia have been persistent and spectacular. Key allies have drifted off into private deals. The big picture has been ignored. The gloomy drift accelerated this year with the signing of a three-cornered deal between Russia, Kazakhstan and Turkmenistan to pump the Caspian’s huge gas reserves north through Russia. Now Uzbekistan, according to Russia’s Vladimir Putin, is going to join too.

Europe’s only chance of getting gas along pipelines that Russia doesn’t control is a project called Nabucco. Its aim is to connect the gas riches of the Caspian and the Middle East to Europe via the Caucasus and Turkey.

But Nabucco’s chances, never strong, are looking flimsier by the week. First, there doesn’t seem to be much gas to pump. It can’t come from Iran while the country wants to wipe Israel off the map. It can’t come from Iraq, for reasons too painful to mention in polite Euro-Atlantic company. None of the other Arab pipelines exists as more than a line on a map. Azerbaijan is willing to send gas, but doesn’t have very much. And the gas in Kazakhstan and Turkmenistan is off-limits. Leaders there, understandably, show no sign of wanting to annoy the Kremlin just to help an indecisive, stingy and unfocussed Europe.

Worse, it is not clear that the countries the pipeline would pass through are interested. Turkey, having been snubbed by the European Union, has developed an alarmingly close relationship with Russia, particularly in the energy sector. That has already led to the building of Blue Stream, a pipeline across the Black Sea of astonishing technical merits and questionable economic ones. Only a fraction of its capacity is used. Now Russia wants to build another gas pipeline across the Black Sea, this time to the Balkans. That would completely kybosh Nabucco’s chances. Once one pipeline exists, it doesn’t make sense to build another one.

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Inside Europe, it looks bleaker still. Governments in Bulgaria, Hungary, and Romania are all dubious about Nabucco.

But is that the clink of spurs from over the hill? Two men are riding to Europe’s rescue. One is Andris Piebalgs, the EU energy commissioner. He is tall and soft-spoken. His American counterpart and ally, Matt Bryza, is tall too. But he throws rocks. At a recent conference on energy security in Riga, much of the proceedings were a bit soporific: prepared statements read in heavy accents, with accompanying PowerPoint slides. But Mr Bryza was a showstopper. When a Russian representative promoted the Baltic gas pipeline on ecological grounds, Mr Bryza intervened forcefully, pointing out that in the Caspian, Russia is arguing that undersea gas pipelines are dangerous.

Both men insist that Europe’s predicament is not as bad as it seems. The thinking goes broadly like this: Turkey has no desire to be dependent on Russia for all its gas. So despite Europe’s sticks, and Russia’s carrots, Ankara will probably support anything that diversifies its gas supplies. Second, Azerbaijan has enough gas to get Nabucco going, if not to make it pay its way in the long term. And by the time the gasline is built, who knows, Iran may be back in the civilised world. Third, someone has given the Hungarian government a stiff talking to and the prime minister, Ferenc Gyurcsany, will give a speech at a conference in September strongly endorsing Nabucco.

It is uplifting stuff. But the striking oddity is that just as in the last cold war, Europe’s security still depends so much on the Americans. Mr Bryza is taking on Russia’s energy monolith in single-handed mortal combat, because faraway America sees Europe’s problems with proper clarity. And then as now, most European governments are childishly unfocussed—and ungrateful.