ROMANIA: Finding Energy to Rescue EU

By Claudia Ciobanu Reprint | | Print |

Claudia Ciobanu

BUCHAREST, Jan 29 2007 (IPS) - With the European Union becoming ever more uncomfortable over its energy dependency on Russia, Romania, which joined the bloc along with Bulgaria Jan. 1, is paving the way for a pipeline project considered crucial for Europe’s energy safety.

Romanian President Traian Basescu has been a stout advocate of the Nabucco project, which entails the building of a system of pipelines to bring natural gas from the Caucasus region to Western Europe, as an alternative to the oil imported through the Russian-controlled Druzhba (Friendship) pipeline.

Dhzrujba is the largest oil pipeline in the world, transporting approximately 500 million barrels of oil annually from southeast Russia to Ukraine, Hungary, Poland and Germany.

Now, connecting Turkey, Bulgaria, Romania, Hungary and Austria, Nabucco would bring gas from Azerbaijan through Turkey, bypassing both Russian transport infrastructure and territory. This system would continue from the Baku (Azerbaijan)-Tblisi (Georgia)-Erzerum (Turkey) system.

By 2020, it is expected to have a transport capacity of 30 billion cubic metres per year.

EU countries are struggling for energy independence from what many see as “political blackmail” from Moscow. “Some recent instances of such “political blackmail” have been the obstruction of deliveries through Ukraine in January 2006 and through Belarus in January 2007,” Iulian Chifu from the Centre for Conflict Resolution-Early Warning Unit in Bucharest told IPS.

In both cases, Russia quadrupled the price it demanded for the gas and oil delivered to Ukraine and Belarus. But the two countries refused to pay, so Moscow retaliated by cutting off supplies.

The reason given for both stoppages was disagreement over pricing, but Chifu told IPS that it was Russian President Vladimir Putin’s unhappiness with Ukraine and Georgia’s shifts in foreign policy that led to the price hikes.

The European Union is keen to get the Nabucco project started this year, and has agreed to cover 70 percent of the construction costs through the European Investment Bank and the European Bank for Reconstruction and Development.

The new comprehensive energy policy of the European Union presented in Berlin Jan. 10 declares the building of the Nabucco gas pipeline a priority. Nabucco could supply about 5 percent of Europe’s gas needs. In case Russia, from which Europe gets 25 percent of its gas and 30 percent of its oil, decides to stop deliveries, Nabucco could provide the minimum level necessary for basic needs.

The show of support from EU is meant to encourage the more hesitant transit countries to keep this project going. Hungary and Bulgaria have good reasons to avoid being transit countries for Nabucco, and that could spell doom for the whole project.

The two countries could choose instead to join an alternative project that Russia has proposed – the completion of Blue Stream, a system of pipelines bringing gas from Russia to Western Hungary through Turkey, Bulgaria and Serbia.

The Russian project would turn Hungary into the end point of a pipe system bringing gas from the East, rather than Austria, the end point of Nabucco. Hungary has agreed in principle to Nabucco, but the government in Budapest has continued to negotiate with Gazprom, the Russian gas monopoly.

Bulgaria too has been negotiating with Gazprom. Unlike Romania, which can satisfy roughly 70 percent of its own energy needs if necessary, Bulgaria would have been unable to make it through the last months of 2006 without renewing its delivery contract with the Russian company.

Bulgarian Minister for Economy and Energy Rumen Ovcharov explained at the time that although his country was committed to staying in line with EU policies on energy, it would still have to stay on good terms with Russia until routes that allow convenient imports from elsewhere are built.

On the other hand, the current Romanian leadership remains committed to its anti-Russian stance. Ever since the electoral campaign for the 2004 elections, Basescu has been promoting what he calls “the Washington-London-Bucharest axis” in foreign policy. Less dependent than its neighbours on Russian energy, Romania can afford to play a tougher game with the Russians.

Perhaps more importantly, Romania has no choice but Nabucco. While Bulgaria and Hungary are also included in Russia’s plan to expand Blue Stream, Romania is not, which increases its government’s commitment to Nabucco.