EU–Russia Energy Relations: Aggregation and Aggravation1

¹ This article was first presented at a round table held by the University of Helsinki and Aleksanteri Institute, Finnish Centre for Russian and East European Studies, April 2006. It has benefited greatly from feedback at the 2007 ISA in Chicago (Panel SB 38: Unique Perspectives on Leadership) and the 2007 UACES Conference in Portsmouth, as well as from colleagues at Chatham House and those in the Energy Analysis Group at the University of Kent. I am also indebted to Adnan Amkhan for his knowledgeable and insightful input of many key details.

Abstract

Reliance on energy resources is inextricably linked to energy security. Whether dependent upon energy imports or exports, all states, regions and companies strive to reduce the risks associated with resource dependence by linking energy with their own security. Ensuring access to energy resources involves negotiating with a variety of external actors. As a result, energy is deeply connected to the external affairs of political and commercial actors alike. Within this terrain Russia and the EU emerge as very different energy actors. Indeed, the two are polar opposites in their ability to tackle the geo-economic asymmetry of importers and exporters, the structural unevenness in market versus governmental authority over energy resources and the geopolitical imbalances arising from differing perceptions of energy's role in foreign and security policy. This article examines the rise and fall of the EU–Russia Energy Dialogue. Launched in 2000 as a sector-specific forum with the capacity to engineer change in a host of other areas, the dialogue is now all but defunct, the victim of increased diplomatic fallout between the EU and Russia over political and energy issues. An overview of the key policy papers of the EU–Russia Energy Dialogue illustrates that the generic demands of energy security take on particularist orientations depending on the geo-economic and geopolitical circumstances of a given energy actor. Dialogue documents illustrate that the two sides ultimately understand energy security in very different ways. Now a viable component part of Russian national and foreign policy in its post-Cold War reconstruction, energy security is perceived by the EU in a rather more holistic way, and remains an unwieldy policy instrument.

Keywords:

• energy
• EU–Russia relations
• EU–Russia Energy Dialogue
• Russia
• European Union foreign policy

Notes

¹ This article was first presented at a round table held by the University of Helsinki and Aleksanteri Institute, Finnish Centre for Russian and East European Studies, April 2006. It has benefited greatly from feedback at the 2007 ISA in Chicago (Panel SB 38: Unique Perspectives on Leadership) and the 2007 UACES Conference in Portsmouth, as well as from colleagues at Chatham House and those in the Energy Analysis Group at the University of Kent. I am also indebted to Adnan Amkhan for his knowledgeable and insightful input of many key details.

² Signed by the EU and Russia in 1994 during the Corfu European Council, the PCA suffered delays and did not come into force until 1997.

³ The ECT came into force on 16 April 1998, however, Russia has not ratified the ECT but applies it on a provisional basis.

⁴ This is a commentary on and unofficial translation of the original Russian document of 2000 by the European Commission's Delegation to Russia.

⁵ EU–Russia Energy Partnership, Summary of Act, available online at http://www.europa.eu.int/scadplus/leg/en/lvb/l27055.htm.

⁶ Including inter alia the ratification of the Energy Charter as a binding framework in international law with provisions on transit, investment protection, trade and dispute settlement.

⁷ The major developments being the Russia–Germany (Gazprom, BASF and E-ON) construction of the Nord Stream Gas Pipeline, the expanded capacity of the Yamal–Europe gas pipeline and the Burgas–Alexandroupolis oil pipline. The European Nabucco project is not mentioned.

⁸ Specifically, Shell has a shareholding of 55% in the Sakhalin Energy Investment Company, developing oil fields and LNG plants; BP clinched a 2003 deal to create TNK-BP, becoming the world's tenth largest private sector producer of oil and gas; in the same year Shell has been permitted to help develop the Salym oil fields of Western Siberia, while Total also signed a joint venture with Rosneft to explore oil potential close to the Black Sea.

⁹ The Energy Dialogue has also witnessed the October 2005 agreement to launch the EU–Russia Permanent Partnership Council on Energy (PPC) as a part of the generic institutional networking permitted by the PCA.

¹⁰ Other oil and gas stoppages took place in January 2003, when Russia ceased its oil supply to Latvia's Ventspils Nafta export facility (ongoing), and June 2006, when Russia shut down an oil pipeline to Lithuania's Mazeikie Nafta refinery. Both stoppages followed a refusal to sell national energy infrastructure to Russian companies (Baran, 2007, 132–133).

¹¹ These include a Common Economic Space, a Common Space of Freedom, Security and Justice, a Common Space of Cooperation in the Field of External Security and a Common Space on Research, Education and Culture.

¹² It is of course possible for the EU to act as an agent on behalf of a principal, i.e. a member state, but this is not the same as concluding a contract, which binds member states without their direct involvement.

¹³ The conclusions of the EU–Russia summits end at 2003. There are fewer than half a dozen Commission documents on the EnergyDialogue from 2001 to 2004. The most recent event is the 2006 self-styled Convergence of Energy Strategies, for which only press releases and speeches on future energy scenarios are available.