by Julien Sassel

As a continent, Europe has few resources, especially when it comes to fossil fuels. While the golden days of coal have come to an end in most of the Member States of the EU, oil and gas fields are mostly located outside of the EU. Since it is likely that the EU will continue to rely on fossil fuels, next to renewables and nuclear energy, to ensure the production of energy, it is vital to maintain pragmatic relations with Europe’s neighbourhood. Together with trade relations, energy supplies are the policy field where it has become difficult to strike a balance between interests and values, leading to the question of what constitutes the basis of the EU External Action. 

The quest for the security of energy supply 

In 2011, Günther Oettinger, then EU Commissioner for Energy, stated that “Energy is the life-blood of our societies. The wellbeing of our people, industry and economy depends on safe, secure, sustainable and affordable energy.” If one had to continue in blood-related analogies, it could be said that the EU is having a permanent blood transfusion and any disruption would lead to the death of the patient. Indeed, the energy dependence has grown over the years, with imports counting for around 40% in the 1990s to over 50% in the 2010s. Most of these imports are made of crude oil and natural gas. On an individual scale, the situation appears much more alarming, with many Member States having import dependencies for over 75% of their supplies. 

The reliance on crude oil is not something which can be expected to drop sharply in the coming years as part of the electricity is produced in oil plants, and oil and its derivatives have entered most aspects of our daily life. As such it cannot be expected to lower this dependency as long as Europeans will make a wide use of oil, especially in the field of transports. A first step will be the incentivisation of hybrid, electric and, in a longer term, hydrogen engines. At the same time, due to economic and geopolitical factors, crude oil prices remain volatile even though the diversity of suppliers ensures the provisions. For instance, the recent reinstallation of the American sanctions regime against Iran, aiming at e.g. lower the Iranian production of crude oil, has an influence on oil prices. Nevertheless, a disruption of the supply by other Middle Eastern producers is unlikely as the chances of a conflict, possibly involving the closure of the Hormuz straight or attacks in the Bab-el-Mandeb, remain low. 

With regard to natural gas, the high costs required for the installation of infrastructures force the stability of supplies, with both the buyer and the seller having interest in writing off the costs. At the same time, such heavy infrastructures disincentivise the prospects of finding other customers, should the supplier have conflicts with the original buyer. This partly explains why Russia cannot divert its gas sales from Europe to potential customers such as China in a short-term perspective. 

Many suppliers, many problems 

In the last decades, Europe has already experienced the sensitivity of being too dependent on a limited set of suppliers. This happened when, in the wake of the Yom Kippur War in 1973, the successive oil embargo installed by the Arab countries of the OPEC prompted the first oil crisis. Since then, Europeans have been wary of crisis in the Middle East and North Africa area and the possible consequences on fuel supplies. However, the region remains a focal point for conflicts, and relations with the different actors have to be balanced. This partially explains the support to the Joint Comprehensive Plan of Action on the Iranian nuclear programme and the reluctance to take a side in the regional rivalry between Iran, and the Saudi Arabia and the United Arab Emirates. 

Moving up north, the increasingly complex relation with Turkey has an influence on both the transit of fuel and the exploration of gas and oil fields in the Eastern Mediterranean. Indeed, due to its position, Turkey is an inescapable choke point if one wants to deliver fuel from the Caspian and Central Asia while avoiding Russia. It recently appeared after the heated political debate in Italy on the Trans Adriatic Pipeline which will carry gas from Azerbaijan to Italy through Georgia, Turkey, Greece and Albania. At the same time, Turkey has to be managed with regard to the Cypriot gas fields. As Ankara claims that those fields belong to all Cypriots altogether (including the unrecognised and Turkish-occupied Northern Cyprus), the Turkish authorities have tried to prevent foreign companies to start drilling in the Cypriot Exclusive Economic Zone. 

As for Russia, the increasingly confrontational stance of Russia, which peaked in the annexation of Crimea and the conflict in the Donbass has not threatened the gas supplies. Quite the opposite of what happened in a series of disputes in the 2000s between Russia and Ukraine, there are no substantial fears of seeing the deliveries interrupted. Still, there will be consequences in the longer term: The South Stream pipeline which had been agreed in 2009 by Austria, Bulgaria, Hungary, Italy, and Russia was shelved by the Kremlin in 2014 and the North Stream 2, which aims at delivering Russian gas to Germany through the Baltic Sea, has come under the fire of several EU Member States and the Vice-President of the European Commission, Maroŝ Ŝefĉoviĉ, stating that “North Stream 2 does not contribute to the Energy Union’s objectives”. 

The world of energy, according to the EU 

After discussing energy in the world, it is necessary to delve into the EU position on the matter and what the EU stands for when it comes to energy supplies. The founding policy document in this regard is the 2015 Communication from the European Commission on a Strategy for an Energy Union. The Communication outlines several aspects which need a change: an integrated energy system enabling the flow of energy between the Member States and facilitating competition within the European market but also a paradigm shift from a fossil fuel model and supply-side approach towards a model that makes use of the best available technologies and empowers consumers, re-establishing a balance between supply and demand. 

Yet, such expectations of an ideal future are tempered by the acknowledgement that the EU depends on the outside for half of its energy supply and the alarming fact that six Member States rely on a single supplier. It is therefore unsurprising that, for the time being, it is essential to ensure the supplies of traditional fuels. In this matter, diversification is the word: the document puts an emphasis on strengthening energy relations with Central Asia, Northern Europe and the Mediterranean countries. Proceeding by elimination, it appears that the document may suggest that diversification implies decreasing the dependence on Russia. Indeed, Moscow seems to be the document’s elephant in the room, being mentioned only once while it is the EU’s main gas supplier. As such, it is expectable that this single mention of Russia is made to highlight the EU willingness to reconsider the framework of its energy relations with Moscow. 

In addition to the Communication, one must also consider the 2016 Global Strategy determined energy security as an element of the whole European security and, therefore, an integrated aspect of the European External Action and must be considered in the relations with external partners. As a conclusion, one can consider the founding principle of Principled Pragmatism that underpins the Global Strategy and can be applied to the question of energy supplies. As the document reads, Principled Pragmatism merges a realistic assessment of the world with an idealistic aspiration. For this reason, when engaging suppliers, the EU should put forth its values and principles while bearing in mind that such supplies are vital. 

18 December 2018
74
This text was published in Bullseye issue 74