Why doesn't the European Union have a unified energy policy?

Opinions about events beyond our borders.
Jan. 12 2009 8:27 PM

Europe's New Cold War

Why doesn't the European Union have a unified energy policy?

Vladimir Putin. Click image to expand.
Vladimir Putin

Like every continent, Europe has its rituals. In the spring, the storks return to the Low Countries from their winter nests in Africa. In the autumn, the French return to Paris from their beaches in the south. And in the winter, the Russians threaten to cut off the natural gas supplies to Ukraine.

OK, they don't do it every winter. But they did it in the winter of 2005-06, they did it in 2006-07, and when they once again switched off the taps this New Year's Day, it was impossible not to feel a wearisome sense of déjà vu. This year, as in previous years, the negotiations are almost too complicated to explain, involving not only Gazprom, the Russian gas behemoth, but also various shady intermediaries, dubious deals, and differing price mechanisms. This year, as in previous years, the Russians are claiming that the conflict is purely commercial, not political; that Ukraine is stealing Europe's gas; that Ukraine is not paying a fair price. But this year, unlike in some previous years, those claims are looking exceptionally hollow.


For one, it was Russian Prime Minister Vladimir Putin who openly made the decision to switch off the gas, not the Gazprom CEO. More important, the Ukrainians, who have engaged in plenty of pipeline hanky-panky in the past, have this time around readily agreed to let Europeans and Russians monitor their transit pipelines. They have also paid their (very large) Gazprom debt and have asked—at last—for a more transparent system of price-setting, one similar to those used in Western Europe (an algorithm that relates the price of gas to the price of oil). Over the weekend, they even negotiated a deal with Russia, belatedly brokered by EU negotiators. The Russians then refused to sign it for two more days before agreeing—at least in principle—to turn on the taps late Monday night—though as of the time I am writing, they aren't on yet.

But why the delay? And why the cut off the gas for so long in the first place? This being Putin's Russia, theories abound. Perhaps the Russians thought the Ukrainians, in the throes of an economic and financial meltdown, weren't going to be able to pay that very large Gazprom debt. Perhaps they hoped to discredit the Ukrainian leadership in the eyes of the European Union. Perhaps they wanted the lights to start going out in Bratislava or Brindisi, just to give everyone a scare. Or perhaps, as some believe, Putin was trying to distract Russians from their own pending economic and financial meltdown.

For once, it almost doesn't matter. In fact, the most important story here is not the one about Russia and Ukraine but the one about the European Union. Europe, a Hungarian friend said to me last week, "occupies itself with unnecessary things and ignores everything that is important." There is something to this. There are EU sausage-making regulations, EU intercultural dialogues, even EU attempts to broker peace in Gaza. But although most of Europe—from Italy and France to Bulgaria and Slovakia—gets at least some of its gas from Russia, there still isn't a true, unified EU energy policy; and there isn't a true, unified EU Russia policy, either.

Instead, Gazprom—no longer pretending to be anything but a tool of Russian foreign policy—still does deals with European gas concerns one country at time, picking them off one by one. Putin still deploys "divide and rule" tactics to deal with Europe, making special arrangements for Italy, buying politicians in Germany, and cutting off the gas to Ukraine. And it works: In 2006, when Western Europeans suddenly felt the pressure drop in their pipelines, they protested, loudly. This year, as kindergartens in Bulgaria briefly went dark, no one in Brussels seemed especially bothered. Knowing that the Russians are unreliable, everyone now builds up their reserves, turns to other sources (the Norwegians have been pumping gas like mad), and keeps their fingers crossed, hoping that the Russians and Ukrainians will come to their senses in time.

Instead of sending their best and brightest to create a genuinely secure system—through expanded use of liquefied natural gas, more nuclear plants, clean coal—most European countries have settled for makeshift arrangements. Instead of using their collective bargaining power, they act as if they are dependent on Gazprom, when the reverse is equally true: After all, the Russians need the money they get from European sales almost as much as the Europeans need their gas. Instead of sending in crisis negotiators every Jan. 1, Europe's leaders could focus on this problem and solve it. I would love to describe this week's events as a "wake-up call," but there have been so many "wake-up calls" already. When will Europe heed them?



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