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
  • Energy security in Europe: Russia, Ukraine and the eu

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