A major dilemma for the EU
- Written by Laurentiu Rosoiu
At the end of April 2017, Gazprom announced the conclusion of the agreement with Engie, OMV, Shell, Uniper and Wintershall to fund the Nord Stream 2 project. Almost concurrently, the reactions of the project’s supporters and opponents surfaced. Thus, on June 26, a series of information was released on the demarche made by 13 Member States that have announced their support for a draft legislative bill by which the EU executive would have the right to negotiate this project with Russia; on June 29, there was a series of information about a letter received by the European Commission (EC), by which six gas network operators from several Member States expressed their support for the disputed project.
From a geographic point of view, the Central and SE Europe countries are particularly in the opponents’ camp, joined by some of the northern states and Italy, while the supporters’ camp includes mainly Europe’s ‘hard core’ countries, the operators of the natural gas transmission networks in Austria, Germany and the Czech Republic. The project is supported by Germany – EU’s most important economic power and, a little less vocal, by France (the second pillar of the EU), while its opponents have the support of the EC - the supreme executive body of the Union. The structure and the dividing lines between the two camps have been over time and still are in a continuous progress, the shifting of sides or the contradictions between the position of some companies and the position of their home states are not few. Nord Stream 2 is therefore an equally desired and dispraised project mainly within the EU. But at the same time, from outside the EU - which makes it of global importance! At least this can be said if we consider that, on the one hand, the supporters’ camp benefits from Russia’s arsenal of influencing the opinion and the European public authorities, while the opponents’ camp has the U.S. support. The debates on the advantages and disadvantages of this project for Europe can be carried out in a multitude of gray shades, in a wide range from white to black. However, going over the many elements of detail, one can still highlight a few important elements as reference point of the debate. Thus, a Nord Stream in Northern Europe, doubled by a TurkStream in the Black Sea, outlines the impression of the arms of a ‘gas clipper’ opened by Russia to the EU, focussed on Central and SE Europe. And that is not at all good - because it leads to the growth or to maintaining the high EU dependence on gas and on the good relations with Russia and/or Gazprom and thus to higher direct and indirect Russian influence in a region which is anyway in a centrifugal process against the EU. On the other hand, it is quite obvious that the EU is already prisoner to the lack of economically viable alternatives to the natural gas offered by Russia, clearly not economically feasible for Europe. That’s because any of the alternatives is more expensive than Russian gas, a fact that is undesirable for the EU, in the context of more pressing global competition and even less wanted by Germany, Europe’s main industrial power. The problem stands in the same terms – of efficiency and profitability in regard to the U.S. offer, which announced its willingness and interest in covering the gas deficit on the European market by exporting liquefied natural gas from the surplus on the US market. It is true that any tax cuts, and/or the implementation of various forms of public subsidies can make these economically unviable alternatives relatively realistic for Europe’s supply of natural gas; in any event, however, in a possible ‘gas price war’, the cost of gas brought to the EU from any such alternative source cannot be less than the one offered by Russia, which is particularly interested in maintaining the European market. Therefore, such a calculation of economic efficiency for gas imports, makes the EU face one of the greatest dilemmas since its birth and turns the Nord Stream 2 project into a very important milestone on the Union’s path. Not necessarily from the economic perspective, as the geopolitical dimension is much more important!
In this turbulent and difficult EU context, the completing of the EC project to create an integrated gas market in Central and SE Europe, by building a transport network able to carry large amounts of gas from East to West and from North to South, is an important component of the EU response. An answer in which - through its central position in the BRUA project, through the Black Sea gas fields and Transgaz’ recent agreements with similar entities in South Eastern Europe, Romania plays one of the most important roles in its recent history.