Published on October 15, 2007
12 April 2007, The First European PhD Complexity School, ISIStefan Stanciugelu, Faculty of Political Science, NSPSPA, Bucharest: 12 April 2007, The First European PhD Complexity School, ISI Stefan Stanciugelu, Faculty of Political Science, NSPSPA, Bucharest EU versus Russia: Old Techniques of Manipulation in the Cold War on Energy Structure of the presentation: Structure of the presentation Hot news on energy global market– April 2007 EU – the profile of a vulnerable energy consumer Axes of the EU strategy of energy security Algeria-Russia data of interdependency GAZPROM – profile of a monopolistic state company Pipelines control and new corridors of energy transport Political identity of the EU and RUSSIA The systematic winner and the systematic looser Tecniques of Russian energy strategy Patterns of behaviour in the energy conflict Old techniques of manipulation – SUN TZU, KAUTYLIA The specific political theories of the energy domain Recent news on global market of energy: Recent news on global market of energy A. NEWS – April 2007 Europe needs a secure and sustainable energy supply (European Commission) Europe must seek stronger ties with neighbouring and African energy exporters 4 April 2007 – political events on the European energy market: “Black Sea Synergy” 1. Italy, Croatia, Slovenia, Serbia, Romania and Energy Commissioner Andris Piebalgs signed a declaration to build a pipeline to bring oil from the Black Sea to central European markets by 2012 The Commission views the new pipeline as of “great strategic importance” The new oil pipeline will complement the Nabucco project to supply Western Europe with gas from the Caspian region (to be fully operational by 2012). 2. Russia, Greece and Bulgaria agreed to build an oil pipeline linking the Bulgarian port of Burgas and the Greek port of Alexandroupolis, which should also reduce congestion in the Bosphorus Strait. April 10, 2007 – a projected gas OPEC by GECF Doha, Qatar — The 14 members of the Gas Exporting Countries Forum decided to form a commission to study pricing policies to help determine the feasibility of forming an active and exporters' group like the Organization of Petroleum Exporting Countries. - “In the long-term we are moving towards a gas OPEC.” 2. Energy Commissioner Andris Piebalgs stressed the importance of continuing dialogue between energy consuming, producing and transit countries aiming to ensure stability, predictability and transparency in the global energy market. Conclusion: Creation of a powerful OPEC-style gas producers group has caused alarm in Europe. B. EU – THE PROFILE OF A VULNERABLE CONSUMER: B. EU – THE PROFILE OF A VULNERABLE CONSUMER EU is one of the world's largest importers of oil, gas and coal. EU is a major player on the international energy market. External dependence on gas and oil imports grows steadily. Oil and gas reserves are unevenly distributed around the globe. The largest reserves are situated in politically or economically insecure regions (Middle-East, Russia). Global demand for energy is increasing. Global oil consumption has increased by 20% since 1994, and global oil demand is projected to grow by 1.6% per year. World energy demand – and CO2 emissions – is expected to rise by some 60% by 2030. Half of the EU’s gas consumption comes from only three countries (Russia, Norway, Algeria). Predictions on EU Vulnerability: Predictions on EU Vulnerability (The Commission Green Paper on security of energy supply - November 2000) EU's energy dependency will climb from 50% in 2000 to 70% in 2030. Oil 45% of EU oil imports originate from the Middle East EU currently imports around 40% of its oil from the Organisation of Petroleum Exporting Countries (OPEC). by 2030, 90% of EU oil consumption will have to be covered by imports Gas 40% of EU gas imports originate from Russia (30% Algeria, 25% Norway); By 2030, over 60% of EU gas imports are expected to come from Russia with overall external dependency expected to reach 80%. Coal By 2030, 66% of EU needs is expected to be covered by imports. C. AXES OF THE EU STRATEGY OF ENERGY SECURITY: C. AXES OF THE EU STRATEGY OF ENERGY SECURITY Each member-state has to act in an “integrated” way: national preferences should be connected to European interdependence. I. SUSTAINABILITY developing competitive renewable sources of energy and other low carbon energy sources and carriers, particularly alternative transport fuels curbing energy demand within Europe leading global efforts to halt climate change and improve local air quality II. COMPETITIVENESS Liberal values and free competition on the energy market Break-down of European energy sector cartels, swift adoption of low carbon technologies and an increase in energy efficiency across the 27-nation bloc. Liberalization of the electricity and gas market - effective separate of networks energy production from energy transport and distribution "unequivocal ownership unbundling" of energy suppliers and operators. investment in clean energy production and energy efficiency mitigating the impact of higher international energy prices on the EU economy and its citizens and keeping Europe at the cutting edge of energy technologies. III. SECURITY OF SUPPLY diversifying the EU’s energy mix with greater use of competitive indigenous and renewable energy diversifying sources and routes of supply of imported energy stimulate investments to cope with emergencies improve the conditions for European companies to have access to global resources ALGERIA-RUSSIA-EU: DATA OF INTERDEPENDENCY: ALGERIA-RUSSIA-EU: DATA OF INTERDEPENDENCY The EU takes 62.7% of Algeria's exports and supplies 58% of its imports. Russia’s 40% of GNP is generated by raw materials exports in EU (60% of its raw material exports comes from gas and oil exports). RUSSIA EU – OIL imports 51% of its oil from the Middle East and North Africa 23% from Russia (IEA). EU – GAS imports 40% of EU gas imports originate from Russia 30% Algeria 25% Norway) Long term prediction: By 2030, over 60% of EU gas imports are expected to come from Russia with overall external dependency expected to reach 80%. RUSSIA’s MONOPOLIST POLICY Russia opposes to the European Union's request to provide foreign investors with broader access to its oil and natural gas deposits and export pipelines. Russia does not ratify the Energy Charter," since some of its mechanisms related to transit and investment are unacceptable. EU nations access to Russian energy deposits and long-distance natural gas pipelines IS NOT POSSIBLE GAZPROM – PROFILE OF A MONOPOLIST STATE COMPANY: GAZPROM – PROFILE OF A MONOPOLIST STATE COMPANY Gazprom controls around 80% of Russian gas production and has a monopoly over gas exports and pipeline network. I. STRATEGIC OBJECTIVES To control market share before market liberalisation in EU Maintain the monopoly in terms of exports – traditional and new markets To strengthen its market position in those states that traditionally buy Russian gas NEW MARKETS Western Europe - gas-producing countries and states where Gazprom has not been a major supplier until 2007 TRADITIONAL MARKETS To extend already-existing gas deals by guarantees of long-term supplies The right to directly sell gas in some of these markets, and to distribute and trade gas in most of them Monopoly into the European gas sector, including transport, distribution and trade MAIN INSTRUMENT OF EXPANSION EXCHANGE: local pipeline networks – long term contracts II. PARTNERS OF GAZPROM LUKOIL is going to be absorbed by GazpromNeft – 1600 units in the US TNK-BP: TNK sells participation with British Petroleum to a state company in Russia Gazprom and Rosneft – Agreement to participate together in all activities Gazprom – media owner: Izvestia, NTV, RadioMoski, intention to achieve Komersant, turism FOREIGN PARTNERS OF GAZPROM: FOREIGN PARTNERS OF GAZPROM Ruhrgas, Wintershall (BASF- 50%, Gazprom – 50%) Gaz de France, Total ENI Royal Dutch Shell ExxonMobile PetroCanada ChinesePetroChina ONGC TNK-BP (50% Gazprom, 50% BP) PIPELINES NETWORK OWNERSHIP Gas pipeline network in Russia belongs to Gazprom Oil pipeline network belongs to Transneft FOREIGN PIPELINE NETWORK Ex. Slovakia – 49% from transport network (Gazprom, Ruhrgas, Gaz de France) PROJECTS FOR NEAR FUTURE UK, US, FRANCE, IRAN, IRAK, QUATAR, ALGERIA, CANADA, GERMANY, AUSTRIA PIPELINES CONTROL AND NEW CORRIDORS OF ENERGY TRANSPORT: PIPELINES CONTROL AND NEW CORRIDORS OF ENERGY TRANSPORT 1. BAKU-TBILISSI-CEYHAN (BTC) The pipeline was mainly built to relieve the West's oil dependency on the unstable Middle East and OPEC producers. The pipeline has the potential to change the political balance of power in the region. Russia, which has been bypassed, is one of the biggest losers of the project, both economically and politically. 2. BURGAS – ALEXANDROPOLIS OIL PIPELINE: 2. BURGAS – ALEXANDROPOLIS OIL PIPELINE RUSIA (51%), BULGARIA, GREECE 3. CONSTANTA – TRIESTEOIL PIPELINE: 3. CONSTANTA – TRIESTE OIL PIPELINE Romania, Slovenia, Croatia, Serbia, Italy 1,300km 'Pan-European Oil Pipeline' links the Black Sea directly into the continental EU pipeline system, unlike other competing projects that avoid the Bosphorus straits. EU – Protocol with Azerbaidjan US – Protocol with Azerbaidjan Caspian Sea: Caspian Sea Political Identity of EU and Russia: Political Identity of EU and Russia Collective political actor Different interests as energy consumers 27 national states Liberal market rules Transparency of the decision making process Economic companies as non-state legal entities Political power obtained by democratic elections Political rights and liberties – freedom of speech (mass media) Difficult decision making process Different degrees of energy needs Different degrees of dependency Individual political actor Self oriented as an energy provider State companies control resources, transportation infrastructure and energy exports Fast decision making process No transparency in mass media A certain degree of media control Different degrees of control over different nation-states of the EU A state company negotiates, deals and act as a unique exporter of gas and oil State monopoly over oil and gas resources Monopolist internal market on energy Out of equilibrium situation: Out of equilibrium situation Each POLITICAL ACTOR wants to modify the present state of the conflict according to his own interests EU – secure its energy market – PRO-ACTIVE STRATEGY to diversify the energy suppliers Russia – growing control – REACTIVE STRATEGY to strengthen its monopoly on gas and oil supplies The structure of the conflicting interaction - An interaction with a systematic winner and a systematic looser: The structure of the conflicting interaction - An interaction with a systematic winner and a systematic looser EU’s NEW OIL CORRIDORCASPIAN BASIN - TRIESTE: EU’s NEW OIL CORRIDOR CASPIAN BASIN - TRIESTE Russia’s reaction – parallel oil corridor at the Black Sea with the same Caspian oil fields EU’s new pipeline Constanta - Trieste: EU’s new pipeline Constanta - Trieste Russian reaction Burgas – Alexandropolis oil pipeline New oil pipeline with Bulgaria, Macedonia, Albania EU’s alternative energy plan: EU’s alternative energy plan Nuclear energy as an alternative resource Russian reaction A nuclear plant with Uzbekistan in Siberia Participation in China’s program to built 23 nuclear energy plants in the future 15 years EU’s new gas pipeline NABUCCO: EU’s new gas pipeline NABUCCO NABUCCO – Turkey, Bulgaria, Romania, Hungary, Austria Russia’s reaction Negotiation to interrupt the pipeline project in one of its countries – recent individual talks with the PM of Hungary Negotiations to participate indirectly in the project at its origins - Turkey PATTERNS OF BEHAVIOUR: PATTERNS OF BEHAVIOUR Mirroring techniques Flanking techniques Divide et impera Compete at the origins of the pipeline Interrupt the pipeline by individual negotiations with one of the project members Black-mail technique: if EU does not accept certain conditions there is a great need of oil and gas toward China, Pakistan, India, Japan Surrounding techniques: - individual discussions with two of most important consumers - Italy and Germany, - Energy “scissors” – the north branch of the Baltic Sea Pipeline to Germany and the south branch – Burgas-Alexandropolis-Vlore. Final conclusions: a who controls who conflict without using military violence (which is autocatalytic): Final conclusions: a who controls who conflict without using military violence (which is autocatalytic) 1. Russia is a useful evaluator for any EU or state member of the EU energy project: a valuable project generates a 24 hours reaction in mass media of one of the top 5 Russian officials. 2. The pattern of Russia’s reaction could be used in risk strategies that have to accompany any EU energy project. 3. The conflict between Russia and EU has become during the last days an obvious game of three – EU, US – Russia. 4. In this political game of three players there is until now a systematic winner and a systematic looser – Russia/EU. 5. Russia’s energy strategy is based on contextual approaches – water-like strategy: it keeps its monopolistic nature but takes the form of the context. 6. The EU, US – Russia conflict on energy looks like a Cold War conflict. Despite many similarities, there is no ideological cleavage. THEORIES OF THE DOMAIN: THEORIES OF THE DOMAIN THERE IS NO SPECIFIC POLITICAL THEORY OF THIS DOMAIN Many thanks.