EU must look beyond Red Square for its future energy requirements

Estonia is the latest victim of Moscow's use of the 'energy weapon' in its diplomatic disputes, writes Daniel McLaughlin in Budapest…

Estonia is the latest victim of Moscow's use of the 'energy weapon' in its diplomatic disputes, writes Daniel McLaughlinin Budapest.

Moscow's threat to cut oil and coal supplies to Estonia during their current diplomatic row has added urgency to the European Union's search for alternatives to Russian energy.

Estonia's relocation of a Soviet war memorial last week sparked deadly riots in the capital Tallinn.

After threats of "serious repercussions" from senior officials in Moscow, Russia's rail operator unexpectedly announced that track maintenance work this month would disrupt deliveries of oil and coal to the Baltic state and transport of freight to its ports for onward shipment.

READ MORE

Moscow denied any political motive behind the disruption, but it stands accused of regularly using such tactics against former Soviet neighbours who seek closer ties with the EU and Nato but still rely for heat and light on Russia's reserves of oil and gas.

In winter 2006, Russia turned off gas supplies for three days to Ukraine, cranking up pressure on its government over a price dispute and affecting deliveries further west along the pipeline. Moldova and Georgia have come in for similar treatment.

During a row over the rights of ethnic Russians in Latvia, Moscow suddenly announced a lack of capacity in its pipeline to the country's main oil terminal and shut it down.

In neighbouring Lithuania, the sale of a refinery to a Polish rather than a Kremlin-backed firm last year was followed by a Russian announcement that the pipeline taking oil to the facility was damaged and would have to close. It is still not working, forcing the refinery to bring in oil by ship.

Now Estonia is feeling the squeeze, making it likely that this month's EU-Russia summit will see discussion of the Kremlin's use of its energy resources as a weapon in political disputes, even as Brussels seeks to diversify its imports of oil and gas away from Moscow.

EU energy officials want the existing Odessa-Brody pipeline in Ukraine to be adapted to carry Caspian Sea oil from Ukraine's Black Sea coast into central Europe, and hope to revive plans for a pipeline to take gas from Turkmenistan and Kazakhstan across the Caspian to Turkey.

The EU's main hope however, is Nabucco, a planned €5 billion pipeline from Turkey to Austria, which could deliver gas from the Middle East or central Asia into the heart of Europe.

In response, Russia's state-controlled energy behemoth Gazprom is planning to extend its Blue Stream pipeline into central Europe from its current terminus on the Turkish coast.

What's more, it is wooing EU members - notably Hungary - to help them do it. A Russian firm also has majority control of an oil pipeline that will run from Bulgaria's Black Sea coast to a Greek port on the Mediterranean, further strengthening Moscow's hand in Europe.

Gazprom also intends to lay a pipeline under the Baltic Sea to take gas to Germany, bypassing Poland and the Baltic states, with which Moscow's relations are distinctly rocky.

Poland has replied with plans to build a Baltic terminal for liquefied natural gas which - like a similar plan for Croatia's Adriatic coast - would facilitate the import of gas to the EU by tanker from major suppliers in Asia and north Africa.

However, as Hungarian prime minister Ferenç Gyurcsany noted recently when asked about prospects for the rival Nabucco and Blue Stream projects, Russia is busily pumping gas while the EU is mostly spouting hot air.

"I would be most thankful if we could diversify our supplies, but Nabucco has been a long dream and an old plan . . . and you can only heat apartments with gas, not with dreams."