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Energy security in Europe: Russia, Ukraine and the eu

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  • Electricity generation, heating/cooking fuel, fertilizer production,
  • Those without adequate stored supplies adversely affected: Bulgaria, Hungary, Romania, Poland, Greece, Slovakia, Czech, Germany, Austria, the Balkans.Ukraine loses out on $84 million in transit fees.Gazprom loses more than $1 billion in lost sales.
  • http://www.gazprom.com/production/projects/pipelines/nord-stream/; http://www.gazprom.com/production/projects/pipelines/south-stream/; http://www.gazpromexport.ru/?pkey1=00004
  • Transcript

    • 1. Energy security in Europe: The Eu, Russia and transit countries
      UNC Chapel Hill
      Center for Slavic, Eurasian and East European Studies
    • 2. What is energy security?
      Multiple definitions
      For the consumer (European Union): Access to sufficient energy resources at reasonable prices, free from major risk of disruption
      For the producer (Russia): Ensuring a future market and supply route for selling its energy resources and ensuring the supply is adequate to fulfill contracts
      For the transit countries: Access to sufficient energy resources at reasonable prices and possibly obtaining transit-related revenue
    • 3. Main arguments
      Increasing EU dependence on Russian energy and breakdowns in energy security
      Failed EU attempts to lessen dependence
      Successful Russian attempts to weaken EU initiatives
      Continued Russian dominance over energy supply
    • 4. Outline
      EU energy consumption and imports
      Types and sources
      Getting from A to B
      Problems with the supply route
      EU response to supply disruptions
      Solidarity, indigenous production and import diversification
      Russian counter response
      Develop new middlemen
      Concluding thoughts
      Continued, if not growing, Russian influence
    • 5. EU energy supply
      Source: Second Strategic Energy Review, “An EU Security and Solidarity Action Plan,” Statistical Index
    • 6. Import dependency
      Source: Second Strategic Energy Review, “An EU Security and Solidarity Action Plan, Statistical Index
    • 7. Sources of imports
      Source: Second Strategic Energy Review, “An EU Security and Solidarity Action Plan,” Statistical Index
    • 8. Particularities of natural gas
      Growing demand
      Safer than nuclear
      Cleaner than coal
      Cheaper than oil
      Growing importation
      Dwindling EU production
      Gaseous state
      Difficult to transport
      Increasing dependence on Russian supplies as well as Russia’s increasing dependence on transit pipelines
      Source: Authors’ calculations, Second Strategic Energy Review, “An EU Security and Solidarity Action Plan”
    • 9. How does it get to Europe?
    • 10. Only two existing corridors
      Source: The Economist, “Bear at the Throat”
    • 11. Supply disruptions: 2009 Russia-Ukraine gas dispute
      1 January: Gazprom cuts all supplies for Ukrainian consumption, while supplies to Europe continue
      5 January: Gazprom alleges that 65.3 million cubic meters of gas has been ‘stolen’
      7 January: deliveries to Europe completely cut off
      19 January: ten-year supply and transit contracts signed
      20 January: gas flows to Ukraine and Europe restart
      22 January: gas flows to all European customers returning to normal levels
    • 12. EU Response
      An External Policy for Energy Security
      Promoting Indigenous Energy Supply
      Diversification of Natural Gas Supply
    • 13. Response 1: An external policy for energy security
      “Energy Charter Treaty”
      “EU-Russia Dialogue”
      Possible outcomes of these two initiatives?
      Challenges to these initiatives?
    • 14. Response 2: Promoting indigenous energy supply
      Source: CRS Report for Congress, “The European Union’s Energy Security Challenges”
    • 15. Response 2: Promoting indigenous energy supply
      Source: Second Strategic Energy Review, “An EU Security and Solidarity Action Plan,” Statistical Index
    • 16. Types of indigenous energy
      Coal
      Nuclear
      Renewable
    • 17. Response 3: Diversification of natural gas supply
      Arguably the most politicized and important attempt to diversify natural gas supply is the proposed Nabucco Pipeline
      Nabucco Pipeline intended to cut dependence on Russian natural gas
    • 18. Nabucco
      EU-backed pipeline initially proposed in 2002 during talks between major energy companies in Austria, Hungary, Romania, Bulgaria, and Turkey.
      Proposed Nabucco route would connect Turkey to Austria and transport Central Asian and Caspian gas.
      Route would bypass Russia
    • 19. Nabucco criticism and obstacles
      Delayed Construction
      Securing Energy Source
      EU’s relationship with Turkey
      Gazprom’s South Stream
    • 20. Russian response: Cut out the transit countries
      Transit route diversification
      South Stream
      Nord Stream
    • 21. Gazprom’s South Stream
      Proposed in 2006, Gazprom gas South Stream would transport natural gas from Black Sea to Italy.
      Current route would involve Russia, Turkey, Bulgaria, Romania, Hungary, Serbia, Greece, and Italy.
      Viewed by many as a more viable rival to the Nabucco pipeline
    • 22. Comparing routes
      Source: BBC News, “Deal to Boost EU Gas Project”
    • 23. Russia’s regional strategy in East Europe to block Nabucco?
      All of the countries that are part of the Nabucco pipeline have accepted invitations from Gazprom to join South Stream pipeline.
      Gazprom construction of multiple storage facilities in East Europe
      Gazprom purchase of 22% of Hungarian MOL in 2009
    • 24. Nord Stream: Russia to Germany, no layovers
      Source: Nord Stream AG, http://www.nord-stream.com/fileadmin/Dokumente/3__PNG_JPG/1__Charts/Nord_Stream_Pipeline_Route_ENG.JPG
    • 25. Concluding remarks
      Increasing dependency on Russian supplies
      Increasing European demand for natural gas
      Decline of coal, nuclear and oil
      Failure to secure alternate supplier and route
      Central Asian gas via Nabucco
      Strengthening of Russian position vis-à-vis transit countries
      Nord Stream and South Stream lessen Russia’s dependence on any one transit country
      Will Russia be able to increase production (or secure Central Asian supplies) to meet rise in demand?
    • 26. Energy security in Europe
      Questions and comments?
      Brandon Rice Isaac White
      Center for Slavic, Eurasian and East European StudiesCenter for Slavic, Eurasian and East European Studies
      UNC Chapel HillUNC Chapel Hill
      brrice@email.unc.eduipwhite@email.unc.edu

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