|ENERGY DIALOG AS SEEN BY CARTELS
MOSCOW. (Dr. Igor Tomberg for RIA Novosti)
The international energy conference "Moscow Energy Dialog,"
which was held in Moscow on October 30 – November 1, was the latest
round in the sorting out of energy-related issues in relations between
Russia and the European Union.
Their bilateral dialog increasingly resembles a conversation between a
blind man and a deaf one. The parties are not willing to listen to each
other, insisting only that their own demands be met. The EU is setting the
tone. Quite recently, Russian President Vladimir Putin was actually
delivered an ultimatum in Lahti, Finland: Either Russia ratifies the
Energy Charter Treaty together with the transit protocol, or the main
clauses of these documents will be included in a new agreement between
Russia and the EU.
Russian Industry and Energy Minister Viktor Khristenko, who attended the
forum, emphasized that Russia has a unique perspective on the energy
problem due to its geographic location and economic situation. "We
are both a large energy exporter and a large energy consumer," he
said. "At the same time, Russia is an important transit country. So
we understand the views of almost all players on the global energy
In addition, Russia's Gazprom owns the world's largest gas pipeline
network, part of which connects Central Asia and the Caspian region with
Europe. This allows proponents of gas-market liberalization to argue that
Russia hinders direct access of Central Asian gas to European markets and
therefore prevents diversification of EU energy sources. Without the right
of direct access to Russian gas pipelines, European consumers are unable
to buy Central Asian gas at (they hope) lower prices.
These circumstances are at the root of Brussels' persistent attempts to
make Russia ratify the transit protocol to the Energy Charter.
Russian objections to the protocol are based on some of its clauses that
allow for a broad interpretation not in line with Russia's interests.
Nevertheless, Russia has not ruled out signing the Energy Charter, but it
wants the wording of some important clauses to be changed so that they no
longer have the potential to encroach on its interests. This work is being
carried out by experts, who are amending the wording and bringing the
positions closer together. The numerous publications and speeches by both
the Charter's proponents and opponents tend to misunderstand the essence
of these complicated problems, which often hinders the coordinating
process and adds unnecessary tension to the atmosphere surrounding the
energy dialog. Very few experts have actually read and understood the
250-page document, but that doesn’t keep them from offering their ample
interpretation of it.
The Moscow forum has shown once again that Europeans are waging a
coordinated and aggressive battle for the interests of energy-consuming
countries under the banner of supply diversification. Russian
representatives are right to view this front as a kind of cartel of gas
consumers, which naturally makes them want to level the playing field by
Valery Yazev, head of the Russian parliament's committee for energy,
transportation and communications, proposed setting up a gas producers'
alliance in response. "The EU clearly constitutes a cartel of
consumers of Russian gas, and they are demanding that we ratify the Energy
Charter Treaty. This is not in Russia's interests because it governs
access to our pipeline network," he said. "We need to set up our
own gas alliance, which might consist of Turkmenistan, Kazakhstan,
Uzbekistan, Russia, Ukraine and Belarus. If the problems with Iran's
nuclear program are resolved, I would also like to see Iran in this
This idea is not all that far-fetched. Gazprom has long been working to
build a system for coordinating its actions with owners of large energy
reserves. It is currently coordinating its transport, production and
pricing decisions with Central Asian producers. It has signed a memorandum
of cooperation with Algeria, which is the EU's second largest gas
supplier. Last June, the presidents of Russia and Iran agreed to
coordinate their gas-selling policies at the summit of the Shanghai
Cooperation Organization. Last September, Gazprom began cooperating with
Qatar after the company’s CEO visited the country.
The reaction to Yazev's initiative was controversial but constructive. The
many problems Russia is encountering on the world’s changing gas markets
do not allow it to dismiss the possibility of a gas OPEC. So this can be
viewed as one possible scenario for Russia's economic policy, which,
though it will not necessarily be carried out, still remains on the table.
In any case, the exchange of threats accompanying the Russian-EU energy
dialog is unlikely to lead to the creation of a solid legal framework for
further cooperation or to ensure energy security for both parties.
Next year, the Partnership and Cooperation Agreement between Russia and
the European Union expires, and energy issues will be a key element of the
new framework agreement. These issues, however, do not stand a chance of
being addressed in the final agreement without a change in their current
wording, which would impose unfavorable conditions on Russia. Despite all
their disagreements, the EU and Russia will have to come to terms, as this
is in both sides’ interests. After all, Gazprom is connected to its
European consumers not only by an extremely expensive transport
infrastructure, but by the ties that inevitably bind gas producer to gas
Dr. Igor Tomberg, senior research fellow at the Center for Energy
Research, the Institute of World Economy and International Relations, the
Russian Academy of Sciences.-0-