Europe unchained: new realities for external energy policy

The EU’s Energy Union, with its focus on the internal market, has a more pragmatic approach to energy security than ever before. It does not, however, address the basic problem (outlined in the 2001 Green Paper on Energy) of the EU’s dependence on a limited number of external suppliers. The result may be an internal energy market that is so well-integrated that an external energy policy will be just a natural extension. However, in view of the new global energy context – with the huge US liquid natural gas (LNG) export potential and the recent Iran deal – the EU needs to balance its internal energy initiatives with a strong, long-term, outward-looking strategy.

The EU has always been good at identifying challenges in the energy sector, but usually fails to follow through on its own recommendations. Until member states agree on a common external energy policy, the European Commission will only be able to exert influence through internal, single-market measures. This is why Donald Tusk, now President of the European Council, proposed an Energy Union back in 2014, including a single mechanism to negotiate energy contracts with Russia and a focus on diversification in energy storage, infrastructure, and suppliers. The new European Commission was quick to pick up on the idea of an Energy Union, but has made little headway on Tusk’s key recommendation of a common external position. Instead, the waters have been muddied by talk ofvarious 'virtual pipelines' which may well never be built.

Thecurrent Commission has many officials with a hand in energy policy: a vice-president for the Energy Union (Maroš Šefčovič) and a Commissioner for Energy and Climate Action (Miguel Arias Cañete). Various energy issues also come under Violeta Bulc (DG Transport) and Elżbieta Bieńkowska (DG Internal Market). There is a working team on the Energy Union which includes all these people along with the Commissioners for Research, Agriculture and Regional Policy, not to mention Tusk himself and Federica Mogherini. The official agenda is very ambitious. It seeks:

• To establish an Energy Union by connecting infrastructure and increasing competition;
• To prevent energy shortages, diversify imports and ensure a united European voice in negotiations;
• To mobilise additional investment in power grids and improve energy efficiency;
• To ensure the EU reaches its climate and energy targets.

This agenda mirrors previous EU initiatives, from the Single Market to the Energy Community. Tusk’s most contentious idea of a common EU gas-purchasing platform has been dropped, indicating that it was a step too far for some. There is only a vague reference to Šefčovič’s responsibility to ‘ensure a united European voice in negotiations’. And given the history of the EU’s energy policy, it is unlikely that member states will cede much control over the energy sector to Brussels.

A key idea for the Energy Union was to end Russia’s energy stranglehold. During the two Russian–Ukrainian energy spats back in 2006 and 2009, it was south-east Europe that was the hardest hit. With the crisis in Ukraine, the region can only become more vulnerable to another Russian gas cut. Central and east European countries (and Finland) are wholly or partially dependent on Russian gas. And almost half the EU’s gas imports from the east flow through Ukraine. So Moscow holds all the cards for now and its recent response to Ukraine’s Euromaidan shows that its foreign policy in general and its energy policy in particular are unpredictable. All this make a more focused approach to a common energy policy more urgent than ever for the EU.

Brussels should look at the changing global energy environment for solutions. The recent deal with Iran could provide much-needed diversification in supply, with Tehranpossiblya more reliable gas supplier than others (eg. Turkmenistan in the case ofNabucco).The ‘race for Iran’s future riches’ is already on, with the Germans, French and British at its forefront. LNG ‘blitz’ exports from the US are another potential avenue. LNG terminals are being built in Lithuania and Poland and the first shipments may happen this year. To speed this process up, the EU should invest more financial and political capital in new terminals.

Work on the Trans-Adriatic Pipeline (TAP) has already begun. It will bring Caspian gas through a number of interconnectors to Turkey, Greece, Albania, Italy, and maybe also the Balkans. This is important for Europe as pipelines are also a tool of foreign policy. Common infrastructure projects in the Western Balkans like TAP could spill over into closer co-operation in other areas. This makes TAP more than just an exercise in diversification of supply; it could be an element of the EU’s neighbourhood policy. It could also be used to bring Iranian gas to Europe one day.

The problem with all these big ideas is that member states tend to treat energy policy as a fundamental element of national sovereignty. Tusk’s ambitious agenda is being gradually watered down and this could be damaging not only for the EU, but also for its neighbours. Even under Western sanctions, the Kremlin has shown a readiness to explore any weakness in EU policy which is why Brussels is putting so much focus on energy diplomacy. To avoid a repeat of the failed flagship project Nabucco, the EU needs a more prominent external dimension of the Energy Union, taking advantage of new global energy realities in the US and the Middle East, and also closer to home with TAP. This would complement the grand idea set out 15 years ago in the Green Paper on Energy which compared the EU’s dependence on energy suppliers to Gulliver’s imprisonment by the Lilliputians in Jonathan Swift’s famous novel. In the end, in order to be released from his chains Gulliver needed the right set of circumstances. These may well be in place now.

Jarosław Wiśniewski specialises in energy security, international securityand European politics. He has worked as a consultant for the European Commission, Council of Europe, and other institutions in the EU, South Caucasus and South-East Europe.