LETTERS TO THE EDITOR

Autumn 2008

by Miklos Hegedüs

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Sir,

After reading Alexander Medvedev's article, perhaps we should remind ourselves that strengthening energy security through international relations is more important to a country like Hungary than for the EU as a whole. Hungary's dependence on imported energy has become so great that it has already reached the levels forecast for the whole of the EU by 2020. It's also worth pointing out that Hungary is almost totally dependent on Russian energy imports; it has some alternative sources for oil, but for natural gas which is Hungary’s key energy, Russia is the only accessible source both now and in the longer-term. This explains why a long-term agreement between the EU and Russia covering economic and political cooperation is absolutely vital for Hungary.

Inevitably perhaps, energy supply has become a vital strategic issue, so it is hardly surprising that Russia perceives a robust political dimension to its natural gas, not least because it is also Russia's only globally significant resource. So it is somewhat naïve for western European countries to try to separate political considerations from energy policy. It is therefore essential that the EU should put its reservations about Russia's political system to one side when looking at its long-term energy security options, and especially so when it comes to natural gas. After all, Europe needs Russian gas and Russia needs European markets.

The recent history of the Russian-Ukrainian-Belarus gas dispute is well known - as are the sometimes murky political agendas of all concerned. But what is now essential is for the EU to review its position and identify a practical way forward that either mitigates if not prevents energy-related confrontation. It is worth bearing in mind that recent semi-political concerns regarding Gazprom only became really audible in the wake of the Russian-Ukrainian gas dispute. Yet Gazprom was merely extending its regional gas pricing policy to Russian-Ukrainian shipments. The EU's unambiguous condemnation of Russia after it suspended gas shipments to the Ukraine was therefore neither fair nor carefully considered. It undermined the EU's negotiating position, especially for its eastern members, and something similar is now developing with regard to the present Georgia-Russia conflict.

It may sound strange, but the present deficiencies in EU energy policy chiefly reflect the poor relations between Gazprom and the EU. The EU's origins are rooted in a common policy for coal and steel production, yet the creation of a viable common European energy policy has eluded the EU for years. The leading European countries are just not yet ready to transfer control of their sovereign energy policies to some European institution. On the one hand, member states wish to protect their strategic interests, and on the other they also sometimes have differing national interests. That’s why a focus on energy security with Russian gas as the main issue looks suspiciously like an attempt to conceal the EU's common energy policy failures.

The underlying political differences that exist between the EU and Russia now seem to be expressing themselves as energy security issues, so ways of breaking this mindset are clearly needed. The EU should therefore unequivocally define its energy security priorities and should also promote an international energy market based on mutual advantage and nothing more than the usual economic rules of supply and demand. Collaboration and cooperation are clearly needed for a robust energy policy, and any pursuit by either side of a political agenda only risks promoting conflict. Establishing a more rational EU energy market could ease Europe's energy supply vulnerability and might even help to normalise relations with Gazprom.