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Reducing the political cost of Europe’s dependence on Russian gas

Author: Pierre Noel
Institution: University of Cambridge
Type of case study: Research

About the research

The conventional wisdom, at least in foreign policy circles, posits a direct and necessary relationship between the level of ‘dependence’ of Europe on Russian gas and the existence or severity of threats to its political unity and strategic autonomy towards Russia. Europe, so goes the idea, would improve its ability to defend its collective interest vis-à-vis Russia if it reduced its reliance, absolute or relative, on Russian gas.

Since 1990 there has been an impressive reduction in the relative dependence of the EU on Russian gas and the volumes imported from Russia have not grown since 2000. Yet at the same time the perception that Russian gas presents Europe with one of its most pressing geopolitical challenges has spread and deepened.

In this project, a new approach is proposed, emphasising the large differences between Eastern and Western Europe in terms of dependence on Russian gas and the segmentation of the European gas system along national borders. The conclusion is, that the emergence of a single European gas market, where national markets would be integrated through pan-European competitive trading, would significantly reduce the energy security and foreign policy implications of the EU-Russia gas relationship and improve Europe’s ability to speak to Russia with one voice.

Aims and objectives

The project was aimed at understanding the political economy of the EU-Russia gas relationship after the EU enlargements of 2004 and 2007. In particular, how the structure of the European gas market impacts on the political divisions of Europe vis-à-vis Russia.

Methodology

The analytical work was based on two steps. First, graphs were constructed of the structure of gas supply for the EU as a whole (the 27 current member states combined) for the past 30 years. Secondly, the author illustrates very significant differences amongst member states in terms of gas supply diversity, structure of consumption and imported volumes, and in particular between the ‘old’ EU 15 countries and the 12 ‘new’ member states.

Results/Outcome

The main conclusion from this research is that Europe’s political problem with Russian gas need not be addressed through foreign policy. The solution lies not in talking to Russia but developing an integrated and competitive EU gas market. Such a market would make supply diversity available to all EU countries and would de-politicise the conditions for access to Russian gas. The EU-Russia gas relationship would become much less debilitating politically for Europe, creating conditions more favourable to a united foreign policy position vis-à-vis Russia. Building a European gas market has been an EU project for 15 years but until recently little progress had been achieved; this policy failure in the domain of energy and competition policy has significant political and geopolitical implications.

One of the papers, published by the European Council on Foreign Relations, had a significant impact on the EU gas security policy debate. It was published two months before the Russian-Ukrainian gas supply crisis of January 2009 and was accordingly very widely read across Europe.

Publications

Noel, P. (2008). “Beyond Dependence. How to Deal with Russian Gas”, European Council on Foreign Relations, London, November.

Noel, P. (2009). “A Market Between Us: Reducing the Cost of Europe’s Dependence on Russian Gas”, University of Cambridge, EPRG Working Paper 0916.