Pipeliners

// A French expert speaks on energy relations between the EU and Russia
Sep. 24, 2008 - Kommersant interview by Alexander Gabuev - Former director of the International Energy Agency Claude Mandil completed his visit to Moscow yesterday. Mandil is preparing proposals on energy strategy for the French chairmanship of the European Union. After negotiations with key Russian industry figures, Mandil met with Kommersant correspondent Alexander Gabuev and told him how relations between the EU and Russia have change in regard to energy since the war in Georgia.
• What did you do in Moscow? French Prime Minister Francois Fillon asked me in March to develop proposals for energy security for the French chairmanship if the EU. And now I presented the results of my work in Moscow. I met with chairman of Gazprom Alexey Miller, with several officials in the government and with representatives of the EU countries, the G7 and European business. They gave my work high marks. But the report was written before the war in Georgia, which has somewhat clouded relations between Russia and the EU.
• Has Europe changed its assessment of energy partnership with Russia a lot since the war in the Caucasus? In the final declaration of the September 1 EU summit, it talks about the need to reduce energy dependence on Russia. In Europe, they sometimes suspect that Gazprom’s actions are also dictated by political interests. The close ties between the management of the company and the team in the Kremlin is obvious. The vents of the summer again emphasized the need for greater flexibility. Completely unexpected things can place Europe’s energy security under threat. This time it was barely averted. Nonetheless, we in the EU should look for additional options for energy supply.
• Is Nabucco one of those options? The war in Georgia showed the vulnerability of that route. It seems to me that Nabucco can only be implemented with Russia, and not against it. What happened in Georgia did not change my point of view – on the contrary. It is time to stop opposing gas transit routes. Europe has an enormous demand for energy resources, so Nord Stream, and South Stream and Nabucco are all needed. Building a pipeline against someone’s will is not safe. I think most of the natural gas in all of those projects will be Russian any way. There is much oil and gas in Central Asia, but still less than in Russia or Iran.
• How do you see the prospects for energy relations between the EU and Iran? At the present time, contacts are impossible, because Iran is having political difficulties not only with the EU, but with all the world. But the day will come when that will change. It would be good if an infrastructure existed by then to transport Iranian gas to the West, and not just to the East. Europe is very interested in obtaining it. Nabucco is one way to do that. Liquefied gas is another.
• But Nabucco is also a commercial project that should interest investors. It doesn’t now. The project really isn’t especially attractive yet for two reasons. First, there isn’t enough gas to fill the pipeline yet, especially if Iranian and Russian gas is excluded. Second, the pipeline crosses several countries and there should be completely transparent transit regimes in them. There are many issues about that, especially concerning Turkey.
• There is the impression that the United States is almost as interested in Nabucco as the Europeans are. Since the war, Washington has been insisting that Europe should shed its dependence on Russian energy. I can put myself in Mr. Miller’s place. If someone is always saying that they have to build Nabucco to save themselves from Gazprom gas, you will have a single goal – to do anything necessary to foil the project. So Washington’s steps in that direction may prove to be counterproductive. The EU alone should decide issue of European energy security. The U.S. itself is highly dependent on oil imports from Venezuela, but no EU members tell Washington that it’s time to attend to that problem.
• Should the EU raise the issue of whether or not Russia has enough natural gas to meet its export obligations? That is a problem of transparency. We do not have exact information about what is happening in the Russian gas sector, the condition of its fields, for example. We don’t think that situation is good for the suppliers either. Markets become volatile, buyers get nervous and begin to look for other solutions. It would be better for Russia itself if that data were made public, to avoid the fear of an energy shortage in Europe.