Putin's coming to dinner: European energy priorities headed the wrong way

The EU is dependent on Russia for 25% of its gas and 25% of its oil. Conversely, sales of raw materials to the EU provide most of Russia's foreign currency and contribute to over 40% of the Russian federal budget. In October 2000, the EU and Russia agreed to start an Energy Dialogue (dossier) dealing with issues such as security of supply, energy efficiency, infrastructure (e.g. pipelines), investments and trade.

This dialogue is now reaching a highpoint, with EU heads of state attending the Summit in Lahti, Finland, today. And Russian President Vladimir Putin is coming to dinner. The 'lively' dinner debate looms on the Union's energy relationship with Moscow and the murder of independent journalist Anna Politkovskaya on 7 October 2006 underlining accusations of his country’s poor human rights record. Lack of progress on actions against climate change, both on Russia and the EU's side, takes center stage as well.

EU leaders are hoping to present a united front in calling for an equal energy partnership with Russia, but Moscow remains intransigent in its refusal to sign up to the transit protocol of the energy charter treaty, which would give third parties access to the pipelines of Gazprom, the Russian energy group.

European diplomats in Brussels have expressed concerns that the summit in Lahti could become a show of European disunity in regard to its relations with Russia, which has signed bilateral gas deals with several European countries such as Germany, which has been criticised for its quick deal with Russia to build a gas pipeline under the Baltic that bypasses EU member Poland and plugs straight into Germany.

European diplomats have said that President Putin is unlikely to accept criticism of Russia and “would not take lectures from the Europeans in regard to human rights”, which is likely to lead to “very lively” discussions.
New member states from Eastern Europe favor a much tougher stand - Finland is also likely to raise the matter of tensions between Russia and Georgia, as well as the subject of the murder of journalist Anna Politkovskaya.

Meanwhile, British and Dutch Prime Ministers Tony Blair and Jan Peter Balkenende will be promoting climate change as the key issue, as they warn that the world is only 10-15 years away from “a catastrophic tipping point”. But analysts have criticized the fact that Europe marginalises the issue of climate change and solely focuses on good old hard energy politics. Sending Balkenende and Blair as butlers carrying the message of global warming on a plate to Putin and the others, is seen as a weak offer. Even though Russia signed Kyoto in 2004, Putin will again not accept European interference when it comes to pushing Russia to implement the treaty. And when he sees that the EU sends only two of its leaders to send the message, he will gladly conclude that the Union is divided on the issue.

Interdependence or dependence ?
We think the Summit will once again prove that European energy rhetoric is something different than its real actions. Supposedly, the EU leaders want to use the fact that we import so much energy from Russia, as a lever to force Putin to implement political change. The key-word is 'interdependence', negotiations based on the idea that both parties stand to gain from strengthening their relationship. But in reality, the logic is the other way around: Putin thinks in terms of European dependency and will not allow his energy policies to fall prey to 'non-zero sum' game dialogues and actions. Because after all, when it comes to energy, economics and politics really are a zero-sum affair: you either have the resource, or you don't. And if you don't, you are dependent on the other party.
Therefor Putin will not easily step into to the EU strategy which ties energy consumption to demands for political change in Russia. The events of the past years have shown that the Kremlin does not shy away from radical shifts in its energy policies to suit its political agenda (e.g. the sudden shock-decision taken recently by Gazprom to block foreign participation in the exploitation of the giant Shtokman field or the evenly dramatic move by Russia to temporarily close off gas supplies to the Ukraine).

Another logic: a bioenergy pact with the South
The EU-Russia 'dialogue' is a perfect illustration of an antagonistic energy relationship in which one party really sets the agenda. Even though our vision of a bioenergy relationship with the Global South seems idealistic, in theory, it is based on an entirely different logic:
bioenergy :: biofuels :: energy :: sustainability :: EU :: Russia :: petropolitics :: climate change :: energy dependence ::

Currently, European leaders can push climate change aside as a marginal issue in the name of 'realism'; security of energy supplies from Russia is far more important, they say. Even though Russia signed Kyoto in 2004, the EU will not push for the Kremlin to actually implement the protocol, again, because Putin will not accept European interference on this front. Both parties are caught in a spiral of inaction. Both parties have to perpetuate the same relationship based on petropolitics. The result is inaction on the front of climate change.

A bioenergy pact with the global south would automatically put climate change at the center of the deal and open a positive dynamic based on the emergence of a genuine mechanism that thrives on reducing CO2. As Europe imports green energy from the developing world, it would create a global market not only for bioenergy itself, but for carbon credits as well. This comes down to the creation of an entirely new market out of which positive synergies and a dynamic towards mutual adoption of carbon-neutral fuels emerge. With the arrival of such a market, other countries in the South would be prompted to adopt competitive bioenergy production.
Unlike Russia which is a fossil fuel producer, developing countries stand to gain economically from investing in carbon-neutral bioenergy (they can sell both fuel and carbon credits). Europe's effort to convince Russia to join the fight against climate change is based on an entirely different logic: Russia would have to work against its own resources (fossil fuels) and penalise itself. Obviously, that will never work.


Moreover, a bioenergy pact with the South would gradually reduce dependence on Russian oil and gas (the potential is there: over the long term, Africa alone can produce more oil and gas equivalent bioenergy than the entire world currently consumes, without endangering its own food security - see our previous post on Africa's green energy potential). This systematic reduction of dependence would also change the EU's current catch-22 relationship with Russia. The EU can use its bioenergy pact as a political weapon against an intransigent Russia. If it were to tell Putin that there's an alternative down South, that both benefits the fight against climate change, and that enhances the diversification of our energy portfolio, then Putin would lose a lot of his grip on our energy policy.


Positions on the EU-Russia energy dialogue
Some of the following quotes reveal the issues at stake at the Lahti summit:

"If Russia is not prepared to ratify the charter in its current form, it's time to start changing wordings we cannot accept," said Sergei Yastrzhembsky, Putin's aide in charge of EU ties. "There are no other options."

Finnish Prime Minister Matti Vanhanen said: "It is important for the EU to speak with one voice, stressing our interdependence in terms of energy. Russia needs our markets, we need its energy. But this relationship must be built on openness and reciprocity. The EU market is open to Russia but we expect the same openness from them."

European Commission President José Manuel Barroso: "We must address all issues: of course human rights, and of course rule of law — especially freedom of expression. We must do so with a common voice."

Jennifer Morgan, Director of the WWF Global Climate Change Programme criticises the "old-style approach in energy relations between EU and Russia for focusing on oil, gas and pipelines, which continues to dominate at the expense of renewable energy. By joining forces towards non-carbon energy, the EU and Russia could significantly contribute to the reduction of global greenhouse gas emissions, thus combating climate change. However the overall priorities of the EU-Russian energy relations seems to have gone back to the seventies when the entire debate was geared towards oil, gas and nuclear and supply pipelines".

European Liberal Democrat (ALDE) leader Graham Watson, in an open letter to President Putin, published in Russian newspapers Novaya Gazeta and Nezavisimaya Gazeta, spoke of his party’s “deep concern” that “…the killing of the prominent and independent journalist, Anna Politkovskaya on 7th October is one of dozens of high profile assassinations of media personnel, nearly all of which go unpunished and unresolved, leading to a situation which is stifling freedom of thought and opinion in Russia.” "The next generation agreement between the EU and Russia," Watson added, "must be based on a stronger common understanding of democracy and human rights."


More information

Euractiv: Guess who's coming to dinner? - Oct. 20, 2006
Euractiv: EU-Russia Energy Dialogue - dossier
Finnish EU presidency: Lahti informal meeting of Heads of State or Government
BBC News: Papers predict a rough ride for President Vladimir Putin - Oct. 20, 2006
International Herald Tribune: Putin could make for uneasy dinner guest at summit with EU leaders - Oct. 20, 2006