RISKS AND OPPORTUNITIES: Regional tensions and Romania’s new energy strategy

The current tensions in Ukraine that resulted from the Russian Federation’s decision to annex the Crimean peninsula, followed by a dilution of our neighbour’s territorial independence, adding to its crucial role as transit country on Europe’s energy supply route, especially for Eastern and South-eastern Europe, must be considered when consulting the business community on the new energy strategy to be elaborated by the Department of Energy.

Prolonged uncertainty regarding our neighbour to the north brings up concerns about Romania’s natural gas supply and the energy independence of European states in regard to this vital resource. From this perspective, this international crisis poses a series of short and medium-term risks for several European states, Romania included, relating to the security of the Russian gas supply as well as the possibility of a significant price hike if Ukraine decides to raise transit fees in retaliation to the similar increase in supply costs announced by Moscow.

Unfortunately, the current crisis also reveals the inability of European institutions to implement joint policies at a national level. Thus, despite bold statements that followed the gas crises of 2006 and 2009, the interconnection level between gas networks of EU member states is still quite low, making some states more vulnerable to a possible cut in Russian gas supply as they are unable to compensate from other sources. This is the main issue to be considered by the European Commission in the coming fall.

The situation presents a series of opportunities for Romania, which can thus pursue certain key objectives in terms of its energy policy but also in terms of its role in the EU and the region. Acknowledging the need to rapidly reconfigure energy routes, as well as the country’s strategic position, present Romania with a real opportunity to evolve towards a national goal - that of being a regional energy hub.

To achieve this crossroad status, the energy strategy for 2014-2035, which is now under elaboration, must adapt to the new realities and foresee the adequate measures to attain those goals.

The initiative of the Delegate Minister for Energy to develop the new energy strategy based on consultations with the players in this sector sends a positive signal about the importance authorities place upon the business community. Furthermore, if the private sector’s recommendations are adopted in the final form of the strategy, it will guarantee its adaptation to the country’s energy reality. It is worth mentioning we need a clear definition of the state’s role in carrying out this strategy by producing a proper framework for the private sector.

The regional context behind this strategy is an opportunity in as it forces us to consider solutions to avoid similar situations - regional conflicts, gas shortages, sanctions and their consequences - in the future, which might endanger Romania’s energy security.

A crucial aspect to be considered in drafting the new strategy is the correlation between Romania’s energy policy and that of the European Union, but also between energy policy and foreign policy, as such an approach will consolidate Romania’s chances of success in meeting its energy objectives. Moreover, a well-thought and carefully implemented energy policy would boost Romania’s role in the EU, by playing on our country’s advantages: potential for significant hydrocarbon reserves, and a good geostrategic position.

In short, although the Ukrainian crisis poses serious danger to the supply of Russian gas, it can also be used in correlation with the other turning point - the drafting of the 2014-2035 energy strategy - to consolidate the European and regional role of Romania in the coming decades.

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June 2017