Some challenges of Energy Union

Maroš Šefcovic, the European Commission vice-president in charge of Europe’s energy agenda, has launched the Energy Union project.

Questions:

1. The Union should mean unity. What could be the biggest problem for energy union in terms of European unity? Is it a political problem as some countries feel that is beneficial having e. g. good relations with Russia and the prices of energy are also a tool of domestic politics towards voters? Or maybe a problem is more on a commercial level? Or basically is it both?

2. Europe is looking at Azerbaijan (also Turkmenistan, others) as gas suppliers. We probably need them as sources of energy, but some of those countries are hardly beacons of democracy. Should we take it into account in negotiations with them?

Answers:

Agata Loskot-StrachotaEnergy Policy Research Fellow, Centre for Eastern Studies 

1. From my perspective one of the biggest problems are diverging priorities of EU member states. Generalising – in Western Europe it seems to be more climate policy, in Central and Eastern – security of supply and affordability of energy. This divergencies stems inter alia from different market development in these states. And this is also one (not the only one though) of the reasons behind different models of economic growth pursued by them. Which means that forcing a change in policy priorities sometimes means that some countries would be worse of. And then there happen to be different ways of pursuing the same goals by different member states. Here come widely differing political answers to Russia in terms of energy eg. between Poland and Hungary.

What we see in EC vision of the Energy Union is that it included there these differing priorities. Question is if and how they might be realised all at once, or what are the specific short term priorities. And then if the final result wouldn’t be that some countries pursue one part of priorities, other – other part and that there is no increased unity on EU level in that.

2. I guess democracy issue is just one angle of the problem here. Azerbaijan and Turkmenistan to lesser extend seem to be in a difficult position right now with much more assertive and aggressive Russian policy in CIS region. That means that an increased EU attempts to engage more strongly with these countries on energy/gas level have a very strong political context. EU energy policy in Caucasus might be interpreted similarly as it is its policy in Ukraine – as a direct competition with Russian policy goals there: both energy (see developments around Turkish Stream) & non-energy ones. And we observe intensified political relations between Moscow and Baku. EU should be aware of that and so define precisely what are its not only energy – related interests in Caucasus/Caspian region – and then how its increased energy diplomacy fits into that. To sum up – coordinate more closely its external energy and foreign/neighbourhood policy. It is especially important if we remember that Southern Gas Corridor appeared to shrink to one pipeline (TAP/TANAP connection) some time before Ukrainian crisis. This connection is important and may well grow in more distant future – but nothing indicates it will happen in the next few years. So if TAP/Tanap are actually built and used as primarly planned (to export Azeri gas to EU & Turkey) then they will have an important regional meaning, yet probably not that big at the EU scale.

Aleksandra Gawlikowska-FykHead of Energy Project, Polish Institute of International Affairs

1. Politics comes first. There have always been asymetric relations with external suppliers, which undermine the unity, or I would say – solidarity in the EU. Seems to me, that the Commission finally acknowledges that by saying that some use energy as a political tool – well, this was not typical for the Commission before. But of course this political asymetry translates into prices and costs. Some in the EU benefit from that, others don’t. And this results in internal market fragmentation, contrary to European integration as such.

2. It is a real dilemma for the EU – on the one hand it needs to secure energy supplies from third parties, on the other should be firmly based on its founding values – democracy and freedom. If you ask whether the EU should take that into account – yes of course, but if you ask how and what effects it might bring – it’s much more complicated.

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