EU moves to reduce energy dependency on Russia

Leaders agree to accelerate quest for more secure energy supplies as Ukraine tensions continue

European council president Herman Van Rompuy addresses a news conference after a European Union leaders summit in Brussels. Photoggraph: Francois Lenoir/Reuters

European council president Herman Van Rompuy addresses a news conference after a European Union leaders summit in Brussels. Photoggraph: Francois Lenoir/Reuters

Fri, Mar 21, 2014, 16:58

European leaders agreed to accelerate their quest for more secure energy supplies at talks today, saying Moscow’s annexation of Crimea made them determined to reduce dependence on Russian oil and gas.

The EU has made progress in improving its energy security since gas crises in 2006 and 2009, when rows over unpaid bills between Kiev and Moscow led to the disruption of gas exports to western Europe.

However, it has not yet managed to reduce Russia’s share of European energy supplies. Russia provides around one third of the EU’s oil and gas and some 40 per cent of the gas is shipped through Ukraine.

“We are serious about reducing our energy dependency,” said European Council president Herman Van Rompuy.

“Around the table, there was a strong sense we need a new way to do energy business,” he told a news conference after two days of summit talks. “Leaders are ready to maximise their collective hand.”

Diplomats said this could mean pooling their purchasing power to negotiate contracts with Moscow instead of each country bargaining for itself and withholding information on pricing and conditions from European partners that has enabled Russia to play the European countries off against each other.

The EU leaders called on the executive European Commission to draw up detailed proposals by June on how to diversify away from Russia in the short and long term.

German chancellor Angela Merkel said the EU could diversify its gas supplies if US president Barack Obama, due in Brussels next week, agreed to relax restrictions on exports of US gas, now in plentiful supply due to the shale gas revolution.

In response to previous Ukraine gas crises, Europe has made some progress in improving cross-border energy networks, boosting storage capacity and making pipeline flows reversible.

It is better placed now to cope with any disruption of Russian exports than in the past. Accelerated planning procedures, for instance, have cut the lead time to build liquefied natural gas (LNG) facilities to process supplies from all over the world.

Leaders are now pushing for renewed focus on the longer process of reducing Europe’s dependence on imports, rather than just moving around what it has. So far, EU reliance on imported oil and gas, especially from Russia, has been rising, not falling.

EU statistics office Eurostat’s energy dependence indicator, showing the extent to which EU relies on imports crept up to 65.8 per cent in 2012 from 63.4 per cent in 2009.

The share of Russian gas rose to around 30 per cent from 22 per cent in 2010, while Russia’s oil imports accounted for around 35 per cent of EU use.