Friday, 26 December 2014



Since the RUSSIAN government's decision to scrap the "SOUTH STREAM" pipeline project, BERLIN and BRUSSELS have been searching for an alternative supply of natural gas. In answer to the EU, ALEXEI MILLER, GAZPROM'S chief executive, announced that his company was no longer pursuing SOUTH STREAM and would instead construct a pipeline to TURKEY. UKRAINE'S role as transit country for supplying gas to the EU "will be reduced to zero." To meet the increasing demand of EU countries, the EU Commission is now seeking alternative supplies via the "SOUTHERN CORRIDOR" - a route leading from AZERBAIJAN via the SOUTHERN CAUCASUS and TURKEY to the EU. The EU's promised supply from AZERBAIJAN'S natural gas reserves is but a drop in the bucket. The WEST'S policies of war and sanctions hamper additional deliveries from IRAQ or IRAN via the "SOUTHERN CORRIDOR." Only by 2016 will the USA export large quantities of shale gas, however, mainly to ASIA where it can sell at a better price than in EUROPE. GERMAN politicians and experts are pleading to convince MOSCOW to continue the natural gas cooperation.


Recently the RUSSIAN GAZPROM company confirmed that the decision to abandon the SOUTH STREAM pipeline, announced by President VLADIMIR PUTIN on December 1, was final. "SOUTH STREAM is closed," GAZPROM chief executive ALEXEI MILLER told reporters. MILLER also confirmed that the gas earmarked for SOUTH STREAM will be delivered to TURKEY, and TURKEY could in turn transfer it on to the EU. As soon as the pipeline becomes operational, the role of UKRAINE as a transit country "will be reduced to zero." Gas will no longer pass through UKRAINIAN pipes to the EU.[1] The loss of the option of annually importing up to 63 billion cubic meters of natural gas directly from RUSSIA weighs even heavier since - according to the 2014 Review on the EU energy policy of the International Energy Agency (IEA) - RUSSIA will remain an indispensable source because of the decreasing gas production in NORTHWEST EUROPE. "The EUROPEAN UNION will continue to depend on RUSSIAN pipeline gas imports for the foreseeable future," the review states.[2]


BERLIN and BRUSSELS therefore feel compelled to increase their efforts to find alternative supply options for natural gas. MAROŠ ŠEFČOVIČ, Vice President of the EUROPEAN Commission for Energy declared they would first focus on developing the "SOUTHERN CORRIDOR," i.e. the route from the CASPIAN Basin to the EU via the SOUTHERN CAUCASUS and TURKEY. Over the next view years, a pipeline should be laid along this route from AZERBAIJAN to the TURKISH-GREEK border (TRANS ANATOLIAN NATURAL GAS PIPELINE PROJECT, TANAP), with a spur line from there to ITALY via ALBANIA (TRANS ADRIATIC PIPELINE, TAP). According to the planning, by 2019, ten to twelve billion cubic meters of gas can be piped annually, from the huge "SHAH DENIZ" gas field off the coast of AZERBAIJAN. However this is but a drop in the bucket, when compared to the 63 billion cubic meters earmarked for SOUTH STREAM. The IEA predicts that the EU's imports over the next two decades will increase to around 450 billion cubic meters annually.


This is why BERLIN and BRUSSELS have been searching for quite some time for alternative sources to feed gas into the "SOUTHERN CORRIDOR." Currently, this option is gaining prominence. On the one hand, these options include feeding gas from NORTHERN IRAQ. In ERBIL, though its own consumption and export to TURKEY have top priority in the regional government's current plans, the deposits are voluminous enough to also allow delivery to the EU. However, the conditions left behind in IRAQ by the WEST'S war policy have not facilitated gas exports from that country.[3] BERLIN and the EU also have their eyes set on gas from IRAN. Here also their own aggressions have proven disadvantageous. In spite of initial business successes,[4] the sanctions still remaining are impeding a thriving economic cooperation. Only the potential CENTRAL ASIAN gas suppliers TURKMENISTAN and KAZAKHSTAN have not been affected by western aggressions. However, so far, plans to tap their deposits via a pipeline through the CASPIAN Sea to AZERBAIJAN have not been materialized. The fact that it has proven impossible to realize any of these three options, had led to the 2013 abandonment of the "NABUCCO" pipeline plans.[5]


Making matters worse, with MOSCOW'S decision to abandon SOUTH STREAM in favor of providing that gas to TURKEY for transfer to the EU, Ankara's influence has been greatly enhanced. With the development of the "SOUTHERN CORRIDOR" across TURKISH territory, the EU, to a growing extent, is becoming dependent on the transit country, TURKEY.

That this will be accompanied by tensions, could be surmised during the most recent visit to ANKARA by the EU's Foreign Policy Representative FEDERICA MOGHERINI. MOGHERINI had complained that today TURKEY supports less than one third of the EU's foreign policy projects, whereas earlier it had supported up to 80 percent. TURKEY'S Foreign Minister MEVLÜT CAVUSOGLU made it then clear that ANKARA had contributed to BRUSSELS' foreign policy, without "participating in any sort of decision-making mechanism pertaining to questions of security and defense."[6] In fact, the EU is using the negotiations around TURKEY'S admission into the EU, to align TURKISH policies and laws with EU standards, even though, behind ANKARA'S back, it is openly admitted that TURKEY has no chance of actually being accepted into that union. The requirement of adaptation, without the possibility of co-determination, is a "contradiction of the EU," noted CAVUSOGLU. TURKEY submitting to GERMAN - EUROPEAN hegemonic concepts, in the foreseeable future, is less likely than ever.


Simultaneously, prospects of US shale gas imports are worse than had been hoped. The US fracking boom continues and will be ready for export by 2016 - WASHINGTON has licensed around 98 billion cubic meters of shale gas per year - nearly as much as, the world's largest liquid gas exporter QATAR with 105 billion cubic meters. However, the exports - at least for the intermediate term - will be destined for ASIA, because the selling price is around 50 percent higher than on the EU market. Besides, because of shipping costs, US shale gas will not be less expensive than RUSSIAN gas, and possibly even more expensive in EUROPE, explains FRIEDBERT PFLÜGER, a former top foreign policy specialist of the CDU party. PFLÜGER is today the Director of the EUROPEAN Center for Energy and Resource Security (EUCERS) at LONDON'S renowned KING'S COLLEGE.[7] In regards to the EU's wishes for shale gas, WASHINGTON, for the moment, is holding its cards close to its chest. Last week, US Foreign Minister JOHN KERRY turned down EU Foreign Policy Representative FEDERICA MOGHERINI'S request to include an energy chapter into the planned TTIP.


GERMAN politicians and experts are now hoping that the RUSSIAN government can be brought to resolve the SOUTH STREAM dispute. "For EUROPE, as a whole, it would be good if the project is not dead," GERMAN Minister of the Economy, SIGMAR GABRIEL (SPD) was quoted saying. One must "simply hope" that "the situation between RUSSIA, UKRAINE and the EUROPEAN UNION" is again stabilized and "talks renewed."[8] At the same time, the former CDU foreign policy politician, PFLÜGER brings an alternative solution into play. There is "a much more economical alternative" to SOUTH STREAM, he wrote recently in the journal "Handelsblatt:" "NORD STREAM, running from RUSSIA through the BALTIC SEA directly to GERMANY." "To the two NORD STREAM pipelines" one should simply "add a third." "A feasibility study" suggests that even "two additional pipes" could be built to satisfy "the imputed increase in EUROPEAN demand."[9] At the same time, this would reinforce BERLIN'S control over the EU's natural gas supply. However, at the moment, there is no sign that MOSCOW is willing to go down this route - BERLIN and BRUSSELS have gone too far with their SOUTH STREAM maneuvering tactics.


[1] Russia confirms decision to abandon South Stream. 10.12.2014. See The Scrapped Pipeline Project.
[2] International Energy Agency: Energy Politics of IEA Countries. European Union 2014 Review. November 2014.
[3] See Liberated by the West and Der zwanzigjährige Krieg.
[4] See Gesprächskreis in Teheran and Der neue Botschafter in Berlin.
[5] See Das letzte Kapitel.
[6] Turkey Rebuffs EU Criticism Over Foreign Policy Role. 09.12.2014.
[7] Friedbert Pflüger: Europe's New Energy Options - But Russia Remains Important. Arbeitsgruppe Außen- und Sicherheitspolitik der Atlantik-Brücke, Briefing Paper No 3.
[8] South Stream: Gabriel hofft trotz russischen Vetos auf die Mega-Pipeline. 09.12.2014.
[9] Friedbert Pflüger: Das war kein Paukenschlag. Handelsblatt 05.12.2014.

[10] See The Scrapped Pipeline Project.

No comments:

Post a Comment