Europeans have long complained that Russia makes use of its energy exports to exert pressure on Europe’s politics. The root causes of this dilemma lie on the continent however.
Cold winters in Europe, such as the current one, mean high profits for Russian energy suppliers. The European Union imports more than 40% of its natural gas and a third of its oil from Russia, and in some Eastern European countries those shares amount to 100% of fuel needs. European temperatures fall, Russian revenues go up, and eventually both sides are satisfied that the fuels are flowing.
Yet among Europe’s decision-makers there are constant fears that Russia – which controls energy providers including Gazprom – could make use of the “energy weapon” and cut all supplies to the continent out of political motivations. Russia has done so before, and for the last time in 2009 when it underlined its disapproval of the Orange Revolution in Ukraine. Since then, European politics is marked by discussions on energy security and accusing Russia of extortion every winter.
Only few want to realize however that the dependence on Russian oil and gas primarily results from European commitments that nobody seems willing to compromise.
Caught in commitments
The European Commission sets out some of these commitments in its report on the so-called energy union. In short, it aims to provide European citizens with cheap energy that comes from renewable sources. At the same time, it upholds the right of each member state to choose its own energy mix. Moreover, the EU tries to uphold the respect for human rights and democratic values in its trade deals – but many of the main energy exporting countries do not fulfil such high standards.
All these conditions, to which the EU has bound itself, push the continent towards Russia.
On the one hand, European countries like Germany have started to abandon nuclear energy or coal and prevent innovations like fracking, increasing the need for (cheap) alternative sources. Such alternatives are not always reconcilable with European democratic standards however, and hence few states want to create a new energy dependence on fuels from Turkey or Azerbaijan.
On the other hand, the seemingly miraculous effects of American fracking, depressing global fuel prices in 2014, proved short-lived, as Discorsivo reported earlier. The construction of special port facilities to host gas imports from the US is not progressing quickly either, leaving Europe with few import options to choose from. In the end, member states are more or less forced to strike bilateral deals with Russia in order to meet rising energy demand at home.
As a consequence Europe’s dependence on Russian fuels further increased after the crisis of 2009 – and gas imports from the Eastern neighbour have recently even reached a record peak.
Politics versus economics
Faced with the current dilemma, some hope for the power of the market to redeem Europe of its dependence on Russia. They hope that high energy prices will push Europe towards diversification and decarbonisation more quickly. Since Russia depends on revenues from its exports to Europe, this might lead the country to try to retain EU consumers by giving in to some of the European demands, thereby weakening its energy weapon. Yet more often than not Russia is guided by a political rather than economic rationale.
Furthermore, while Europe is slow in diversifying its energy sources, Russia has looked to supply new markets in Asia in case Europe stops relying on Russian imports in the future. Considering Europe’s commitments, that won’t happen any time soon.
When it comes to the European energy situation Russia finds itself in a strong position. Europe has placed it there.