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The future of Europe’s gas

Europe may look for gas-sources in the Caspian region or Africa – for the key to a better supply lie, it has to take a closer look at what is going on at home, though.

gas pipeline
But we have to! (via jakescreations, Flickr)

Once again, the European Union has found itself as a hostage in an international diplomatic controversy about gas-supplies between Russia and Ukraine. This is not likely to change, as Moscow considers Ukraine part of its front garden and Kiev overestimates its ties to Europe, despite a democratic development has stalled since the orange revolution.

What is Europe to do to avoid being squeezed year after year? First, it needs to figure out its relationship to Ukraine. It cannot let it go East again, but it has to make clear a stable government and reliability in international contract obligations are the basics for getting economic aid and a perspective of easing visa restrictions for the country’s citizens. The current crisis seems to have mainly been triggered by Kiev and the dubios gas-contractor RosUkrEnergo. Then, it has to find a consensus about how to deal with Russia. The Nord Stream Pipeline shows the consequences of unilateral actions, it has become a symbolism of the divide between Western and Eastern EU members. If Russia continues to fail to comply to its consignment, Brussels needs to continue to delay loosening visa-restrictions and the intensification of trade. Moscow knows it needs the exports, as the rest of the economy still has not recovered from the cold war and the ongoing corruption.

In the long run, Brussels should look north and south for solutions. The Nabucco project will offer the perspective to transport not only gas from Caspian region, but also from the Middle East. Brussels has to remember, though, that this project will involve continued diplomatic and economic engagement in the region, including Iran. But Nabucco could be combined with other sources: Norway has always been a reliable trade partner, its gas exports to the EU can help to integrate this commodity-rich country’s economy into Europe. At the same time, Galsi, Transmed and Medgaz show that Southern Europe digs up new connections to Africa; ambitious projects like the NIGAL pipeline from Nigeria are too risky, though.

The biggest challenge does not lie in finding new supplies, though: National gas companies in Europe have not been doing enough to build a tighter infrastructure that makes it easier to balance deficiencies on a European level, not speaking of the price cartells in countries like Germany. Brussels should put more pressure on them, finally. It should also encourage national governments to grant money for better isolation, as wasting natural resources will become an expensive hobby very soon. It seems that gas-diplomacy, Europe has to learn, must start at home.

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