Looking outwards: Expanding Europe’s energy policy

Reconciling the external and internal aspects of the Energy Union is vital for its future.

The Energy Union is an initiative that has been triggered by an external crisis, namely the annexation of Crimea by Russia. Its central objective was one of risk reduction, negating the threat posed by the Kremlin’s repeated attempts to influence European governments’ policies by controlling their energy supplies. But since the then Polish PM Donald Tusk launched the idea in April 2014, the Energy Union has gone through a major shift. It has moved from its origins as a policy on security concept towards a more internally focussed rearrangement of the complex set of pre-existing EU energy policies.

Yet there need not be a contradiction between an internally-focussed and an externally focussed Energy Union. Both are very much needed. The European Union needs to get its house in order with regards to the various versions of its many energy policies. These energy policies need to be updated and aligned with the rapid decline of cost of renewables, the declining gas consumption, the advance of energy technologies and the latest plans on climate change from China, the US and other countries.

And with an external focus, the European Union also need to update its foreign and security policies following the annexation of Crimea, the advent of the Islamic State and, most recently, the Iran nuclear deal. And it is essential that pursuing alignment with the current and anticipated energy realities is part of this update. In this regard, the Energy Union process offers a good opportunity to create a meeting point for the EU’s energy, foreign and security policies.

The European Council’s Conclusions on Energy Diplomacy from 20th July this year are a welcome step forward here. The document diplomatically highlights the problem of the gaps between the EU energy, security and foreign policies. Importantly, this gap is not as deep as might be assumed.

Since the formal launch of the Energy Union process by the current European Commission, the EU has scored at least two important victories on the external energy relations front. The first was the European Commission’s success in stopping the advance of the South Stream gas pipeline and making it clear that when on EU soil Gazprom, and other providers, must play by the EU rules.

The second one, largely overlooked by the media, was the establishment of the Central East South Europe Gas Connectivity (CESEC) High Level Group in Sofia in February 2015. Initially the group included only energy ministers from EU member states but at its second meeting in July 2015 in Dubrovnik it included several non-EU countries that are members of the Energy Community. In that way CESEC High Level Group made a promising step into energy governance beyond the EU’s borders. This High Level Group is particularly important given the recognised vulnerability and fragmentation but also energy potential of south east Europe.

But the EU has not yet gone beyond these initial, welcome stages to conceptualise and institutionalise its external energy policy dimension. In order for them to do so, tackling the problem through a regional lens might be a helpful next step.

In its immediate neighbourhood, energy relations with immediate neighbours are mostly defined by the integration of the existing or planned energy infrastructure. Cables and pipelines are crossing the borders and most of the EU neighbours are either members of the Energy Community or the European Economic Area. It seems likely that, fairly soon, we can also expect the emergence of regional cross-border energy markets.

While Russia is technically an EU neighbour, its importance as a supplier and its size. put it in a category of its own. Between a quarter and a third of the oil, gas and coal imports into the EU come from Russia. And while coal and oil are globally traded commodities, Russian gas is still supplied mainly through pipelines which therefore play a highly important role in the EU–Russian relations.

Beyond the neighbourhood, the global energy policy of the EU should address a range of other issues, from the changing role of OPEC to the anticipated climate agreement in Paris at the end of 2015. The 1.2 billion people who are not connected to the grid, the huge renewables ambitions of China and India, the security of oil tankers’ routes, the energy component of the Chinese New Silk Road concept and the possible US liberalisation of gas export all require a strong foreign policy engagement at an EU as well as at a member state level.

The European Commission has limited influence on the foreign and energy policies of member states but this could be an opportunity rather than a burden. European Union member states need a platform for a more coordinated and transparent negotiations with their energy partners and creating this space is a role that the European Commission can fulfil well. But to do so it first must connect more closely its own energy, foreign and security policies.

Julian Popov is a former Bulgarian Minister of Environment, Fellow of the European Climate Foundation, Chairman of the Building Performance Institute Europe and Energy Security Adviser of the President of Bulgaria. He is a speaker at ECFR Sofia’s event ‘The EU in a changing global environment: what next for EU’s neighbours

 

The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of its individual authors.

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