Robert Amsterdam wonders whether the EU will be able to say no to the (for the time being) mighty Gazprom:
Russia is positively gigantic in the energy news today, dominating headlines as crises in Japan and Libya allow it to step forward as the country that has all the answers, or at least, all of the supplies. Solidifying its image as a reliable provider, Gazprom has been supplying gas to Europe to make up for a lack of Libyan supplies, and it was reported today that Russia will double its oil exports to Japan this year (to reach a total of 18 million tons), as well as sending a 100,000 ton shipment of LNG, as the country struggles to meet additional demand. And let's not forget that, should Gaddafi remain in power, Russia will be the first country to benefit from its energy resources, reminding us today that it is 'maintain[ing] diplomatic relations with the current Libyan authorities,' as calls for a ceasefire garner increasing global support and the stakes rise over the possibility of Gaddafi stepping down.
In light of all this, it will be interesting to see how the EU responds to Russia's proposals on the Third Energy Package. The package was designed to "unbundle" the over-concentration of energy assets in Europe, and would inevitably lead to Gazprom's being forced to relinquish control of pipelines that it already owns. Furthermore, under the rules of the package, the South Stream project (whose Slovenian section is the latest to be sealed in, with a new deal struck yesterday) would be in 'direct conflict with the EU's energy market legislation'. Russia therefore wants the EU to alter the wording of the rules to ensure that Russia does not have to sell off any of its pipeline network: and Sergei Shmatko is now eagerly 'waiting for the reply'.
But at Russia's current level of energy domination, can the answer be anything other than resounding compliance?
One certainly must hope that the EU will have enough courage not to give in to Gazproms demands. But, knowing how close Germany is to Putin´s Russia (e.g. through Nord Stream) it would not be a big surprise if the Russians would be able to have it their way. Such a solution would, however, be an enormous mistake from a European point of view. The only clever thing would be to speed up shale gas exploration in Poland and other countries. Shale gas will effectively end the Russian energy domination in Europe, providing that German and other greenies are not succesful in their wish to make it an impossible dream. Meanwhile, some kind of temporary deal with Gazprom should be arranged - without Europe giving up its principles.