European Union Energy Policy презентация

European Union Energy Policy:
Topic 1. Main and additional priorities of the European Union energy policy
Topic 2. Fuel and energy balance of the EU
Topic 3. Liberalization of EU gas and energy markets
Topic 4. EU energy diplomacy and external actions
Topic 5. The EU-Russia energy dialog

Topic 1. Main and additional priorities of the European Union energy policy
Introduction
Milestones of EU energy policy
Evolution of European energy policy
Legislation

Energy is the irreplaceable part of almost every aspect of modern life from industry to transportation, heating and electricity, it is at the heart of human
development and economic growth.

Energy is a fundamental factor in the construction of European Union project. The deep interaction and cooperation among the founding members of the Union crystallized around energy considerations.
The European Coal and Steel Community (ECSC) Treaty and Euratom Treaty did not only establish the roots of European Community but also ensured regular supply of coal and coordination in nuclear energy.

Nevertheless, despite energy’s importance in our daily lives, despite the fact that EU project “took off” with the integration in economic domain and despite potential beneficial effects of integration in terms of external energy policy and action against climate change, European Energy Policy displayed an unsuccessful example of integration.

The EU’s energy dependence (import dependence) ? ? ?
Energy is the significant item on the agenda of European decision makers

The issue gets further complicated with the inclusion of worries about global warming, hazardous effects of certain energy types on health and environmental damages due to energy production, transportation and consumption, which overall require not only secure access to energy but also access to clean and efficient energy.

With these challenges on the background, until recently, climate change and energy efficiency had started to outweigh the agenda of internal and international efforts of the European Union concerning the creation of an energy policy.

Although some of the policies are still up to the individual choices of each Member State in line with their national preferences, global interdependence requires energy policy to offer a European dimension.

The milestones of EU energy policy:
SUSTAINABILITY
COMPETITIVENESS
SECURITY OF SUPPLY

Major European documents constituting these milestones of European energy policy:
Green Paper of 2006
The Commission's communication “An Energy Policy for Europe” of 2007

SUSTAINABILITY
linked to climate change
80% of greenhouse gas (GHG) emission in the Union is caused by energy related activities

COMPETITIVENESS
aims at liberalization of energy market ?
at the opening of energy markets for the benefit of EU citizens in line with latest energy technologies and investments in clean energy production

SECURITY OF SUPPLY
Concerns for energy security and continuity of oil and gas flows to Europe can be considered as fundamental reasons for the creation of a common policy, since permanent supply of energy resources is part of national security understanding of Member States in the modern world circumstances

SECURITY OF SUPPLY
In 2030, it is expected that reliance on imports of gas and oil will rise to 84% and 93% as opposed to 57% and 82% in 2007, respectively.

SECURITY OF SUPPLY
When such a level of dependency is combined with uncertainty about the willingness and capacity of oil and gas exporters to invest more and increase production to meet the increasing global demand, threat of supply disruptions emerge as one of the major challenges of the century.

DEVELOPMENT OF EU ENERGY POLICIES OVER TIME

EVOLUTION OF EUROPEAN ENERGY UNION
In the evolution of the EU itself, policies concerning energy and energy security remained at the back plan. Left to national discretion of Member States, decisions and policies concerning energy security was initially excluded from the EU level integration of European countries.

European energy policy initiated as a need to be capable of responding to international energy supply crises:
the Suez crisis in 1956
the Six Day war between Egypt and Israel in 1967
Arab oil embargo in 1973
oil crisis following Iranian revolution in 1979

International Energy Supply Crises ? two major concerns:
1). political instability in producer countries and regional tensions will lead to a disruption in oil supply
2). the threat that exporter countries can purposefully use oil and natural gas as a weapon in their foreign relations

THE RESPONSE TO SUCH CRISES:
Oil Stock Directive, 1968
An amendment to the directive of 1968, accepted in 1972 - 72/425/EEC
The establishment of International Energy Agency (IEA), 1973
Two more directives - 73/238/EEC and 77/706/EEC

The end of Cold War ?
the end of ideological, political and economic divisions between eastern and western Europe ?
in December 1991 political decision for EUROPEAN ENERGY CHARTER was signed.

EUROPEAN ENERGY CHARTER, 1991:
competition
free transit
taxation
transparency
conditions on environment and sovereignty

Between 1990 and 2000 – THREE Green Papers on ENERGY =
BASELINES for a COMMON policy of the EU

1994 – the Green Paper “For A European Union Energy Policy”
to establish an internal market
to increase the EU’s role in the energy sector
to harmonize national and community level of energy policies

1996 – the Green Paper “Energy for the Future: Renewable Sources of Energy”
incorporation of renewable energy sources into the future Community strategy on energy
offered concrete strategies in the specific issue of renewable resources
mobilization of national and Community instruments for the development of these resources in order to increase the percentage of renewable energy in the EU’s energy mix

!!! 2000 – the Green Paper “Towards a European Strategy for the Security of Energy Supply”
environmental concerns and repeated the interdependence between the Member States which required a Community dimension in the strategies dealing with energy related challenges
the Union’s increasing import dependence
focused on the security of supply
offered a detailed study concerning EU’s energy mixture

2005 – the Green Paper “Green Paper on Energy Efficiency or Doing More with Less”
The Commission suggested the establishment of energy efficiency Action Plan which would be a multi-level initiative combining national, regional, community and international levels. From buildings to tyres and clean vehicles, the paper examined several measures especially in industrial and transportation sectors, which could contribute to energy efficiency.

Russia – Ukraine crises (2006) ?
Member States understood the importance of community level actions in the sphere of energy policy

2006 – the Green Paper “A European Strategy for Sustainable, Competitive and Secure Energy”
competitiveness and the creation of an internal market (common European market)
diversification of energy mix
solidarity between member states
sustainable development as a response to climate change
innovation and technology for the increase of energy efficiency and diversity through renewable resources
an integrated external policy

“An Energy Policy for Europe” introduced
“20/20 Package” (2007):
reducing GHG emission by 20%
improving energy efficiency by 20%
achieving a 20% share of renewable energy
a 10% share of biofuels by 2020

2008 - An EU Energy Security and Solidarity Action Plan
infrastructure needs
the diversification of energy supplies
external energy relations
oil and gas stocks and crisis response mechanisms
energy efficiency
- making the best use of the EU’s indigenous energy resources

The Kyoto Protocol
The Kyoto Protocol (1997) is an international agreement which is intended to lower the greenhouse gas emissions of the industrialized world by 2012. Ideally, the end result of the Kyoto Protocol should be a reduction of these emissions to below 1990 levels. The agreement also addresses the issue of the developing world, which is rapidly industrializing and therefore producing a large volume of greenhouse gases.

The Energy Labelling Directive requires that appliances be labelled to show their power consumption in such a manner that it is possible to compare the efficiency with that of other makes and models. The intention is that consumers will prefer more energy efficient appliances over those with a higher consumption, resulting in less efficient products eventually being withdrawn or decommissioned.

EUROPEAN EMISSIONS STANDARDS
Each of the standards Euro 1 to Euro 6 (the latest) represent a total amount of exhaust gas emissions from a car. They measure four main groups of emission – carbon monoxide, hydrocarbons, nitrous oxide and particulate matter.

INTELLIGENT ENERGY EUROPE
Intelligent Energy – Europe (IEE) offered a helping hand to organisations willing to improve energy sustainability. Launched in 2003 by the European Commission, the programme was part of a broad push to create an energy-intelligent future.

2011 - A Roadmap for Moving to a Competitive, Low-Carbon Economy in 2050: - reducing emissions by 80% relative to what they were in 1990 by 2050 = this is what Europe needs to do in order to make sure that global warming does not go beyond two degrees centigrade (2°C is usually seen as the upper temperature limit to avoid dangerous global warming).

The latest decisions in this matter have come from the European Council of October 2014. That is to aim at reducing carbon emissions by 40% by 2030.
Now, we have the following objectives:
for 2020, a reduction of 20% relative to 1990
we have an objective for 2050, a reduction by 80% and
we have an intermediate objective for 2030, a reduction by 40%.

Today the main goal is to establish ENERGY UNION!
In 2015, the Framework Strategy for Energy Union is launched as one of the European Commission's 10 Priorities.

Topic 2. Fuel and energy balance of the EU

The energy balance remains subject to the national level, not common European
?
A plurality of energy models

Oil:
Malta, Cyprus,
Nuclear energy:
France, Sweden, Belgium
Coal:
Poland, the Czech Republic, Bulgaria
Gas:
the UK, the Netherlands, Italy

The energy available in the European Union comes from energy produced in the EU and from energy imported from third countries. In 2015, the EU produced around 46 % of its own energy, while 54 % was imported.

In 2015, the energy mix in the EU, meaning the range of energy sources available, was mainly made up by five different sources:
?

WHAT DOES THE EU PRODUCE?
Nuclear energy (29 % of total EU energy production) was the largest contributing source to energy production in the EU in 2015. Renewable energy (27 %) was the second largest source, followed by solid fuels (19 %), natural gas (14 %) and crude oil (10 %).

However, the production of energy is very different from one Member State to another. The significance of nuclear energy is particularly high in France (83 % of total national energy production), Belgium (65 %) and Slovakia (63 %). Renewable energy is the main source of energy produced in a number of Member States, with over 90 % (of the energy produced within the country) in Malta, Latvia, Portugal, Cyprus and Lithuania. Solid fuels have the highest importance in Poland (80 %), Estonia (76 %) and Greece (68 %), while natural gas is the main source of energy produced in the Netherlands (82 %). Crude oil is the major source of energy produced in Denmark (49 %) and the United Kingdom (39 %).

What does the EU import? Oil.

What does the EU import? Coal.

What does the EU import? Gas.

How dependent is the EU from energy produced outside the EU?
In the EU in 2015, the dependency rate was equal to 54 %, which means that more than half of the EU’s energy needs were met by net imports. This rate ranges from over 90 % in Malta, Luxembourg and Cyprus, to below 20 % in Estonia, Denmark and Romania. The dependency rate on energy imports has increased since 2000, when it was just 47 %.

GAS. ADVANTAGES:
much lower emissions
there is no need to maintain a reservoir for crude oil or storage for coal
the efficiency of the transformation is high

The drawback of gas is the difficulty in transporting, high cost of transportation!

The largest importers of Russian gas in the European Union are Germany and Italy, accounting together for almost half of the EU gas imports from Russia. Other larger Russian gas importers (over 5 billion cubic meter per year) in the European Union are France, Hungary, Czech Republic, Poland, Austria and Slovakia.

According to the European Commission, the share of Russian natural gas in the member states' domestic gas consumption in 2007 was the following:
Estonia 100%
Finland 100%
Latvia 100%
Lithuania 100%
Slovakia 98%
Bulgaria 92%
Czech Republic 77.6%
Greece 76%
Hungary 60%
Slovenia 52%
Austria 49%
Poland 48.15%
Croatia 37%
Germany 36%

Oil. Advantages.
Oil is a mix of hydrocarbons that are liquid under atmospheric conditions. Therefore, the fact that they are liquid allows for easier treatment of it, easier transportation, easier containment in tanks, and it is one of the greatest advantages of oil.

Based on data from OPEC at the beginning of 2013 the highest proved oil reserves oil deposits are in
Venezuela (20% of global reserves),
Saudi Arabia (18% of global reserves),
Canada (13% of global reserves), and
Iran (9%).

European dependence on oil imports has grown from 76% in 2000 to over 88% in 2014. The EU spends some €215 bn on oil imports, over 5 times as much as gas imports (€40 bn). Russia is the biggest supplier: dependence on Russia has grown from 22% in 2001 to 30% in 2015.

Oil companies

More than 40% of the oil was exported from Middle Eastern countries such as Algeria, Iraq, Libya, and Angola, former Soviet states such as Azerbaijan and Kazakhstan, and Nigeria and Angola in Africa. Russia itself was the source of 30% of Europe’s crude imports.
Just two of the top 10 oil suppliers to the EU were European – Shell and Statoil – whose combined crude market share was 12%. In total 88% of Europe’s crude was imported.

Coal
Countries exporting coal to EU are Russia, Colombia and Australia with shares of 32.5 %, 23.2 % and 15.8 % respectively 30.4 %, 23.7 % and 11.5 % in 2015. Imports shares from USA and South Africa slightly decreased respectively 14.3 % versus 17.4 % and 6.1 % versus 8.1 %.

Coal
Coal, as the largest artificial contributor to carbon dioxide emissions, has been attacked for its detrimental effects on health. Coal has been linked to acid rain, smog pollution, respiratory diseases, mining accidents, reduced agricultural yields and climate change.
Proponents of coal downplay these claims and instead advocate the low cost of using coal for energy. Many European countries, such as Italy, have turned to coal as natural gas and oil prices rose.

Nuclear energy
potentially very cheap
the lowest carbon emissions
Nuclear power plants generate almost 30% of the electricity produced in the EU. There are 130 nuclear reactors in operation in 14 EU countries. Each EU country decides alone whether to include nuclear power in its energy mix or not.

Nuclear safety
The EU promotes the highest safety standards for all types of civilian nuclear activity, including power generation, research, and medical use. In response to the 2011 Fukushima nuclear accident, a series of stress tests were carried out in 2011 and 2012 to measure the ability of EU nuclear installations to withstand natural disasters.

Radioactive waste and decommissioning
Radioactive waste results from nuclear activities such as electricity generation, medicine, and research. The EU's Directive for the Management of Radioactive Waste and Spent Fuel sets out rules for safely disposing of used radioactive materials.
The shutting down and decommissioning of a nuclear power plant at the end of its lifecycle is a long and expensive process. The 'Waste Directive' also requires the creation of EU member states plans for financing the safe disposal of radioactive waste during decommissioning.

Nuclear energy
France is the one country that has the most of its electricity from nuclear power. It has a dependency of approximately 75% of total electricity produced from nuclear power.
But not many people realize that even Belgium, Slovakia and Hungary have levels of dependency on nuclear energy that are of the order of 50%. And then we have Sweden that has a dependency of above 40%.

Nuclear energy
Russian nuclear reactors in the EU are in Bulgaria (2), Czech Republic (6), Finland (2), Hungary (4) and Slovakia (4, with two more being built). Hungary has an agreement for two more to be built, and Finland is planning one with Russian equity.

Renewable energy
The use of renewable energy has many potential benefits, including a reduction in greenhouse gas emissions, the diversification of energy supplies and a reduced dependency on fossil fuel markets (in particular, oil and gas).

Renewable energy
The share of renewable energy in energy consumption increased continuously between 2004 and 2015, from 8.5 % to 16.7 %, approaching the Europe 2020 target of 20 % by 2020.

Renewable energy
The share of renewable energy in the Member States was highest in Sweden (53.9 % of energy consumption) followed by Finland (39.3 %) and Latvia (37.6 %). This share was lowest in Luxembourg and Malta (both 5.0 %), the Netherlands (5.8 %) and Belgium (7.9 %).

Renewable energy
This positive development has been prompted by the legally binding (обладающий обязательным характером) targets for increasing the share of energy from renewable sources enacted by Directive 2009/28/EC on the promotion of the use of energy from renewable sources.

Renewable energy in the EU

Topic 3. Liberalization of EU gas and energy markets

Liberalization Process: Legislation
The liberalization process of the natural gas market is a result of the three Directives handed down by the European Commission in 1998 (98/30/EC), 2003 (2003/55/EC), and most recently in 2009 (2009/79/EC).
The Directives aimed to create an internal market for natural gas, which would theoretically lower prices and increase energy security through introducing more competition.

Liberalization Process
In all of the Directives, there are several components that comprise the bulk of the liberalization process, and they are: third party access, unbundling, contracts, and a regulatory authority.
The EU emphasized these because they were seen as the primary barriers to a competitive market.

Liberalization Process
The first portion of the liberalization process requires states to grant third parties to the gas transmission system and the gas storage system. Third-party access (TPA) is when a firm that does not own the actual pipeline or storage facility must have access to operate it, assuming certain conditions are met by both the owner and operator of the system.

Liberalization Process
The 2003 Directive extended third-party access to gas storage facilities in addition to the transmission systems. Since natural gas can be stored, storage facilities play an important role; firms that are not a part of the production process can buy gas, store it, and then eventually sell it to customers at a later date, bringing another actor into the transaction between producing country and consuming country.

Liberalization . Unbundling.
The next aspect of the Directives is the concept of unbundling.
At its core, unbundling is separating vertically integrated companies, forcing firms either to be only involved in either production or transmission or distribution.
Emphasizing unbundling is supposed to facilitate the entry of more actors in the market, thus making it more competitive.

Liberalization. Interruptible contracts
The EU Directives is encouraging shorter and interruptible contracts, starting in 2003.
The 2009 Directive went further and told Member States explicitly that they “should encourage the development of interruptible supply contracts”.

Liberalization. Regulatory authority
The last major area of focus in liberalization reform is the creation of a regulatory authority.
Chapter IX of Directive 2009/72/EC requires each Member State to designate a single National Regulatory Authority (NRA). Member States may designate other regulatory authorities for regions within the Member State, but there must be a senior representative at national level. Member States must ensure that the NRA is able to carry out its regulatory activities independently from government and from any other public or private entity.

Liberalization of EU gas market
The Third Energy Package consists of two Directives and three Regulations:
Directive 2009/72/EC concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC
Directive 2009/73/EC concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC
Regulation (EC) No 714/2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003
Regulation (EC) No 715/2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005
Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators

Topic 4. EU energy diplomacy and external actions

Internal and external energy policies cannot be separated from each other due to their complimentary nature.
High import dependency trends highlight that the Union is in urgent need for a common approach to external energy policy which would shape relations and partnerships of Europe with global energy actors being consumers, producers, transit countries or major companies

Concerning its ambitious goals about sustainability, renewable resources and fight against climate change the EU is aware that the efforts of its members have to be combined with the cooperation of other consumer states, developing countries or producer states in order to obtain effective outcomes.

In the study of external energy policy of Europe it is possible to classify it under three major strategies:
1). the extension of internal energy policies and internal energy market to the international arena, which is also based on the integration of energy into broader external relations, which would eventually end up with a pan-European Energy Community
2). dialogue with third parties
3). diversification is the last major strategy as it basically indicates the strengthening of existing infrastructures and construction of new ones for alternative energy supplies

Pan-European Energy Community is “common regulatory space” in other words “common trade, transit and environment rules” between the Member States and EU neighboring countries.
The extension of EU’s own internal market to its neighbors and partners is the strategy that the policy makers are trying to pursue with the argument that only well-functioning international market can assure affordable oil and gas supplies and encourage new investments.

European Neighbourhood Policy
In the European Neighbourhood Policy Strategy Paper, the Commission indicates that “Enhancing our strategic energy partnership with neighbouring countries is a major element of the European Neighbourhood Policy”. Hence, in order to increase energy cooperation with EU neighbouring countries which are key players in the energy supply security as suppliers (such as Southern Caucasus countries, Algeria, Egypt and Libya) or as transit countries (Ukraine, Belarus, Morocco and Tunisia), ENP is a way to institutionalize external energy dialogues.

EU energy goals require efficient usage of financial instruments through European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), Neighbourhood Investment Fund.

The Kyoto Protocol (1997)
The Kyoto Protocol is an international agreement which is intended to lower the greenhouse gas emissions of the industrialized world by 2012. Ideally, the end result of the Kyoto Protocol should be a reduction of these emissions to below 1990 levels. The agreement also addresses the issue of the developing world, which is rapidly industrializing and therefore producing a large volume of greenhouse gases.

NORWAY
Norway is the second major natural gas and oil supplier to the European Union.
June 1971 is the beginning of the production in the Norwegian continental shelf, and since then twenty billion
barrels of oil have been extracted from the area.

Norway
Norway differs from other energy suppliers to the Union because it is a member of European Economic Area. The legislation concerning EU’s internal energy market and related policy arrangements about competition law, environmental regulations, consumer rights and new technologies are already implemented by Norway.

Norway
Not only the EU needs Norway as a reliable oil and gas supplier but also Norway needs the EU since EU Members namely, Germany, United Kingdom, France, Belgium, the Netherlands account for the majority of Norway’s natural gas exports in 2008.

Norway
Norway and the EU act together to further develop their partnership. The Commission as well emphasizes the potential of Norway in the maximization of Europe’s energy security and suggests the promotion of common exploration projects in the Norwegian continental shelf and the promotion of alternative energy production such as offshore wind in the North Sea

Africa
Concerning EU’s dialogue with Africa, energy is incorporated within the development and governance issues. Poverty reduction projects and improvement of energy delivery systems to rural areas attracts the Union’s interests and to this end, initiatives and aid funds are offered.
The example is the EU Initiative for Poverty Eradication and Sustainable Development launched in 2002

Africa
In the region, the EU policy makers associate the Union’s energy interests with broader political and security considerations. Still, due to high instability in the region, EU’s efforts remain insufficient in the implementation of development projects. To illustrate despite being the fourth major natural gas supplier of the EU, Nigeria remained as the Africa’s “most under-funded state” since corruption and lack of transparency hindered investment efforts. Instead of rule of law, oil contracts and government positions were used as political means to “buy off” militants.

Africa
Nevertheless, Africa, more specifically North Africa has a significant potential not only in hydrocarbons but also in renewable energy sources. Despite the inconvenient conditions for investments, secure extraction and transportation of resources, Algeria, Egypt, Libya and Nigeria outstand as important suppliers after Russia and Norway, especially in natural gas imports.

Middle East
Middle East is the world’s important energy producing region and world’s richest proven oil and natural gas reserves belong to the region. Seeking ways to guarantee its energy security, EU aims to institutionalize its energy relations with the region, especially with the Persian Gulf countries some such as Iraq, Kuwait, Qatar, Saudi Arabia and United Arab Emirates being member of Organization of Petroleum Exporting Countries (OPEC).

Middle East
Despite the Union’s intense energy dialogues with Russia or Caspian region, Middle East remains as a “critical player in energy policy” especially due to its rich resources, geographical advantages and its potential to stabilize world market prices in line with its oil supply capacity.

Middle East
Concerning the region, EU’s effort to achieve international cooperation in energy is not limited to the dialogue with the Gulf Cooperation Council. The Euro-Mediterranean Energy Partnership (Euromed) is another platform for EU to pursue its goals of energy security and sustainability. The partnership consists of EU Member States and Mediterranean and Middle Eastern partners (Algeria, Egypt, Israel, Jordon, Lebanon, Morocco, Palestinian Authority, Syria, Tunisia and Turkey) and its origins date back to 1995 the Euro-Mediterranean Conference of Ministers of Foreign Affairs.

Caspian Region
Caspian region refers to five Caspian littoral states namely, Azerbaijan, Iran, Kazakhstan, Turkmenistan and Russia.
The critical point about the region is the legal status of the Caspian Sea. With the disintegration of the Soviet Union, the determination of official sea boundary between the states emerged as a question. No agreement has been reached between the littoral states concerning the debate on whether the subject matter is a lake or sea.

Caspian Region
This identification is necessary because, if the Caspian is a sea, in line with the United Nations Convention on the Law of the Sea, bordering countries will be able to claim 12 miles from the shore as
their territorial waters and beyond that a 200-mile exclusive economic zone and this will cause an uneven distribution of oil and natural gas resources in the basin.

Caspian Region
Apart from the legal status of the potential reserves, the fact that Azerbaijan, Kazakhstan and Turkmenistan are landlocked states, the construction of oil and natural gas transit routes create a further challenge for the region.

Caspian Region
The institutionalization of relations with the Caspian Region countries:
the INOGATE, Interstate Oil and Gas Transport to Europe program
Baku Initiative
the Black Sea initiative

Caspian Region
Energy outstands as the main item among the imports from the region.
Nevertheless, mineral fuels imported from the region represent very small shares among total imports of EU from the world market. Azerbaijan, Turkmenistan, Kazakhstan and Iran correspond to only 2.3%, 0.3%, 3.4 % and 2.8% of EU’s total imports, respectively. Compared with the region’s oil and gas reserves, these results indicate that the potential of these countries is not being efficiently used, yet.

Southern Gas Corridor
The Southern Gas Corridor is an initiative of the European Commission for the natural gas supply from Caspian and Middle Eastern regions to Europe. The goals of the Southern Gas Corridor are to reduce Europe's dependency on Russian gas and add diverse sources of energy supply. The route from Azerbaijan to Europe consists of the South Caucasus Pipeline, the Trans-Anatolian Pipeline, and the Trans-Adriatic Pipeline (under construction). The total investment of this route is estimated US$45 billion. The main supply source would be the Shah Deniz gas field, located in the Caspian Sea.

Topic 4. The EU-Russia energy dialog

Russia is the main exporter of energy resources to the European Union. This distinguishes Russia from other energy partners and urges the Union to develop a special partnership with it, as part of EU energy security strategy.

When Russia’s internal energy sector is examined the most outstanding feature is state’s control over resources. Russia’s oil exports are under the jurisdiction of Transneft which is Russia’s state owned pipeline monopoly.
Three oil pipelines:
Druzhba Pipeline
the Baltic Pipeline System (BPS)
Adria Pipeline

Concerning the natural gas sector, again a state run monopoly, Gazprom accounts for almost 90% of Russian natural gas production and controls the country’s gas exports.
Main gas pipelines:
1. NORD STREAM
Capacity: 55 billion cubic meters per year. Partners: Gazprom, Wintershall, E.ON, Gasunie, Engie.
The Nord Stream pipeline became operational in 2011. First proposed in 1997, disputes between Kiev and Moscow in 2006 and 2009 prompted Russia to stop natural gas flows through Ukraine, depriving Europe of natural gas and accelerating Nord Stream construction. The pipeline enables Russia to deliver energy directly to Germany and parts of Central Europe.

2. NORTHERN LIGHTS AND YAMAL EUROPE
Capacity: 84 bilion cubic meters per year. Partners: Gazprom, Beltrangaz, PGNiG.
The Northern Lights and Yamal-Europe pipelines are two major systems that deliver Russian gas to Eastern Europe.
3. SOYUZ
Capacity: 26 billion cubic meters per year. Partners: Gazprom, Ukrtransgaz.
The Soyuz and Brotherhood pipelines are Gazprom’s major export routes for delivering gas to Europe through Ukraine. They have a total capacity of over 150 billion cubic meters. In an effort to avoid using Ukraine as a transit state, Gazprom is seeking alternative routes from 2019 onward.

4. BLUE STREAM
Capacity: 16 bilion cubic meters per year (expanding to 19 bcm). Partners: Gazprom, BOTAS, Eni.
One of two major pipeline systems that Gazprom uses to deliver natural gas to Turkey. Gazprom can deliver about 16 bcm to Turkey via Ukraine, and another 16 bcm directly to Turkey via Blue Stream. At the moment, neither pipeline alone has the capacity to meet Turkey’s energy demands. In 2014, Turkey and Russia agreed to expand the capacity of Blue Stream by 3 bcm.
5. RUSSIAN GAS-WEST PIPELINE
Capacity: 16 billion cubic meters per year. Partners: BOTAS, Transgaz, Bulgartransgaz.
The Russian Gas-West pipelines deliver gas to Turkey through Ukraine, Romania and Bulgaria. In the future Turkish demand will exceed both the existing pipelines’ capacity and a third will be needed.

6. NORD STREAM 2
Capacity: 55 billion cubic meters per year. Partners: Gazprom, Shell, OMV, E.ON.
Gazprom signed a memorandum of understanding with Shell, OMV, and E.ON at the 2015 St Petersburg International Economic Forum to build the Nord Stream-2 pipeline. As proposed, Nord Stream-2 would be the same size as the original pipeline and go operational in late 2019. The pipeline will increase capacity over time to balance out reduced North Sea production.
7. TURKISH STREAM
Capacity: 63 billion cubic meters per year. Partners: BOTAS, Gazprom.
The pipeline is designed to provide an alternative route to deliver natural gas into southern Europe, bypassing Ukraine.

8. EASTRING PIPELINE
Capacity: 20 billion to 40 billion cubic meters per year. Partners: Eustream, Transgaz, Bulgartransgaz.
Eastring would connect infrastructure in Slovakia to Romania and Bulgaria. Slovakia has taken the lead on the project and even suggested connecting to TurkStream. Bratislava wants to be part of Gazprom’s plans to diversify transit options away from Ukraine because Slovakia is the critical link between pipelines in Ukraine and central Europe.
9. SOUTH STREAM
Capacity: 63 billion cubic meters per year. Partners: Gazprom, Eni, others.
South Stream was a pipeline system that would have sent gas from Russia to Bulgaria across the Black Sea and then onward through Serbia into Central Europe. Gazprom canceled the project in December 2013 and is pursuing the TurkStream pipeline project instead, hoping to achieve the same strategic goal of bypassing Ukraine. The European Commission opposed South Stream and contributed to Gazprom’s cancellation of the project.

The institutionalization of EU-Russia relationship concerning energy can be identified by three main legal grounds: European Energy Charter, EU-Russia Energy Dialogue and “Four Common Spaces”. However, the initial move which transformed this relationship into a “partnership” is the ten year bilateral treaty Partnership and Cooperation Agreement (PCA) which came into force in 1997. Article 65 of the Agreement directly addresses energy and offers cooperation in issues such as supply security, infrastructure, energy efficiency and formulation of energy policy.

Due to Russia’s non-ratification of Energy Charter Treaty, the relationship between EU and Russia has to be conducted in another platform. EU-Russia Summits compensated this deficiency and helped to increase the coordination between the parties.
In May 2003, EU and Russia decided to set a framework for cooperation. As the name suggested the new framework “Four
Common Spaces” focused on four main areas: economy, foreign and security policy, justice and home affairs, and culture, information and education”, energy being included under the economy section.