Energy security is a major objective of the European Union (EU). The goal is to sustain economic prosperity and ensure the well-being of its citizens. Energy security can be defined as the availability of clean supplies at affordable prices. The more a country or a region is exposed to a high concentration of energy sources or markets, the lower is its energy security. Stated differently, the diversification of both energy mix and energy suppliers is a major component in the EU's energy strategy.
Governments can play a role in ensuring that the world's abundant energy sources can be fully-utilized in a timely fashion to meet the growing demand. Indeed, in most consuming nations (i.e. Europe, China, Japan, and the United States), public authorities have assumed more responsibilities in regulating pollution and ensuring the non-interruption of supplies. The waves of oil prices skyrocketing of the 1970s, 1980s, and the first part of the 2000s have triggered a global sense of vulnerability. In addition, Russia's repeated cutting off of gas supplies in the early 2000s has further reinforced this sense of global energy in-security.
Calls for "energy independence" are made frequently in the United States. European officials on the other side of the Atlantic have emphasized the need to endorse a "mutual dependence" or "interdependence" approach between Europe and major producing regions. Jose Manuel Durao Barroso, President of the European Commission, echoes this sentiment, "All of us, consuming, producing and transiting countries alike, are becoming more and more dependent on each other: security of supply is important for us, but other countries seek security of demand. This is the age of energy interdependence."
Driven by this notion of mutual dependence, energy security has become a major goal of EU foreign policy. In the last several years, EU officials have sought to establish and consolidate partnerships with major producing regions including Russia, the Caspian Basin, the Mediterranean Sea, and the Organization of Petroleum Exporting Countries (OPEC). The goals of these partnerships are not only to ensure the steady flow of energy supplies, but also to promote economic and political reform.
The founding of the European Coal and Steel Community in 1951 demonstrates that cooperation on energy issues has been at the heart of EU policy from the beginning. The lack of indigenous energy sources has been a major concern and a key challenge to sustain Europe's high standard of living. Energy produced within the EU represents 46% of the total consumed. This indigenous production comprises nuclear energy (30%), solid fuels (22%), gas (20%), oil (14%) and renewable (14%). Regardless of the relative share of each source, the overall production is projected to decline.
Most of Europe's oil and gas production comes from the North Sea. In the 1980s and 1990s major discoveries were made. However, in recent years Norway and the UK have emerged as the major producers. Meanwhile, oil fields seem to have matured and oil production peaked and started a slow decline. Natural gas production is still rising. Two factors are likely to influence oil and gas production from the North Sea in the foreseeable future - technological advances and the design of fiscal regimes. The region's inhospitable climate and great depths requires sophisticated and expensive offshore technology.
Limited indigenous energy supplies pose a serious challenge and threaten the sustainability of economic prosperity in Europe. In November 2008, the European Commission introduced a second Energy Security and Solidarity Action Plan (the first was adopted in March 2007). The Plan focuses on five areas: A) the diversification of energy supplies; B) a greater focus on energy in the EU's international relations; C) improved oil and gas stocks; D) energy efficiency; and E) making better use of the EU's indigenous energy reserves.
Europe's energy consumption comprises oil (37%), gas (24%), solid fuels (18%), nuclear (14%) and renewable (7%). Thus, Europe's energy mix is highly dominated by fossil fuels (about 79%). This dominant share is projected to remain stable in the foreseeable future. Meanwhile, Europe's production of oil, gas and solid fuels is expected to decline. In short, the already large gap between indigenous energy production and consumption is projected to grow further, leading to deeper dependence on foreign supplies.
Brussels and Moscow
The EU's large neighbor, Russia, does not only enjoy geographical proximity, but also is the world's second largest oil producer (after Saudi Arabia) and the largest gas producer. Thus, Moscow is a major contender in Europe's energy landscape. Brussels has an extensive strategic and economic relationship with Moscow. The end of the Cold War in the early 1990s provided an opportunity to overcome previous economic divisions and promote cooperation. The Energy Charter Treaty (ECT), signed in December 1994 and entered into force in April 1998, was an embodiment of this new spirit. Russia signed the ECT but has never ratified it. In August 2009 Prime Minister Vladimir Putin signed an order rejecting Russia's participation in the ECT.
Russia's economy, particularly its energy sector, suffered a deep decline during most of the 1990s as a consequence of the broad chaos that accompanied the collapse of the Soviet Union. Economic recovery started in late 1990s partly due to increased political and economic stability and partly because of the global rise in oil and gas prices. This rise in fossil fuel prices and production has given Russia more leverage in the global energy markets and has further deepened Europe's dependence on supplies from its giant neighbor.
This deepening dependence presented serious challenges as early as 1990, when Moscow cut energy supplies to the Baltic states in a futile attempt to stifle their independence movement. A similar episode took place in 1992 in retaliation for Baltic demands that Russia remove its remaining military forces from the region. In 1993 and 1994 Russian punished Ukraine, the conduit for about 80% of Russia's gas export to Europe, by reducing gas supplies to force it to pay for previous supplies and to pressure Kiev into ceding more control to Russia over the Black Sea fleet and over Ukraine's energy infrastructure. A similar technique was applied to Belarus in 2004. In December 2005 and December 2006 Russia again cut or threatened to cut gas supplies to Ukraine and Belarus respectively to demand higher prices. In January 2009, Russia again cut off gas deliveries to Ukraine. Little wonder, a recent report by the International Energy Agency (IEA) states that the flow of Russian gas through Ukraine may be subject to disruption "at almost any time." In order to face this challenge, the European Commission proposed new regulations in July 2009. These require all member states to have a competent authority that would be responsible for monitoring gas supply developments, assessing risks to supplies, establishing preventive action plans and setting up emergency plans. They would also oblige member states to collaborate closely in a crisis, including through a strengthened Gas Coordination Group and through shared access to reliable supply information and data.
These episodes have heightened Europe's sense of energy vulnerability and the potential of blackmailing for commercial and/or political purposes. While the EU has stepped up efforts to reduce its dependence on oil and gas supplies from Russia, Moscow has responded with counter measures to further strengthen this dependence. Attempts to re-shape the EU-Russia energy relationship have given birth to a number of pipeline schemes. One of the oldest pipelines supplying Russian oil to Europe is the Druzhba pipeline, also known as the Friendship Pipeline. It was built in the early 1960s to supply oil to the former Soviet bloc and to Western Europe. It carries Russian and Kazakh oil to points in Ukraine, Hungary, Poland, Germany and other destinations in Central and Eastern Europe.
Financial disagreements between Moscow and Kiev and the former's suspicion of the latter's growing pro-Western orientation have prompted the Russian government and its state-run gas monopoly Gazprom to initiate three huge gas pipeline schemes that would further strengthen Europe's dependence on Russia without passing through Ukraine. Blue Stream connects the Russian system to Turkey underneath the Black Sea. It is a joint venture between Gazprom and the Italian oil company ENI. The pipeline became operational in December 2002. Part of this Russian gas is re-exported to Europe via the Turkey-Greece interconnector (inaugurated in November 2007) and another link connecting Turkey to Greece and ending in Italy is planned. Another joint venture between Gazprom and ENI is South Stream. The pipeline will run from Beregovaya, Russia, the same starting point as the Blue Stream, underneath the Black Sea to Bulgaria. From there the pipeline would branch off in two directions: one towards the northwest, crossing Serbia and Hungary and ending in Austria. The other is directed to the southwest through Greece and Albania, linking to the Italian network.
The Nord Stream (also called the North European Gas Pipeline) will pass under the Baltic Sea starting from Vyborg, Russia to Greifswald, Germany. It will transport gas to Germany where it can be shipped to Denmark, the Netherlands, Belgium, the UK, France and other countries. The shareholders are Gazprom (51%) and three German companies - Wintershall Holding AG (20%), E.ON Ruhrgas AG (20%), and N.V.Nederlandse Gasunie (9%).
Seeking to counter these Russian schemes and to reduce its gas dependence on Moscow, Europe has initiated a number of pipeline proposals that would bypass Russia. The Nabucco pipeline is at the heart of this European strategy. It would bring Central Asian and Middle Eastern gas to Europe without passing through Russian territory. It will run from eastern Turkey through Bulgaria, Romania and Hungary, ending in Austria. In May 2009, Azerbaijan, Egypt, Georgia and Turkey signed an agreement committing themselves to the project. Two months later, on July 13, the transit countries, Austria, Bulgaria, Hungary, Romania and Turkey, signed a deal allowing work on the pipeline to start. Ironically, a few weeks later in August, Turkey agreed to allow its territorial waters to be used for the South Stream pipeline.
White Stream is another pipeline proposal that is designed to bypass Russia. It would run from Turkmenistan through Azerbaijan to Georgia and then through the seabed of the Black Sea to Crimea in Ukraine connecting to Romania and Poland. Ukraine's Prime Minister Yulia Tymoshenko asked the EU to consider participating in the project during her visit to Brussels in February 2008. The following year, the EU signed an agreement with Kiev to improve both the management and capacity of its gas infrastructure in return for embracing market economy practices. This agreement is part of a broader process called the Eastern Partnership that embraces the former Soviet republics of Armenia, Azerbaijan, Georgia, Moldova, Ukraine and Belarus. It started in 2003 as an essentially technocratic drive to advance reform in these six republics. In 2009, European leaders offered improved trade ties, simpler visa rules and financial aid. The Russian Foreign Ministry described this development as an "unfriendly act in relations to Russia and a threat because it made Russia's neighbors choose between Moscow and Brussels."
This pipeline rivalry between Brussels and Moscow aside, Russia will continue to play a major role in meeting Europe's energy demand. Geographical proximity, massive production and reserves and existing shipping lines strongly indicate that Russia is, and will continue to be, a significant component of Europe's energy security equation. These energy ties are better described as interdependence. True, the EU imports significant oil and gas supplies from Russia, but it is also true that these oil and gas revenues represent a major source of income to the Kremlin. The Russian government keeps gas prices low domestically. This means that almost all the profit Gazprom makes comes from selling gas to Europe. Moreover, Russia needs European investment and technology (particularly in deep-sea production and liquefied natural gas). Driven by this interdependence, the two sides have confronted energy crises at almost regular intervals over the last two decades. However, they have managed to overcome them. Shared mutual interests are likely to keep the partnership strong.
Dr. Gawdat Bahgat is a professor at the Near East South Asia Center for Strategic Studies at the National Defense University in Washington D.C. He is the author of The Gulf Monarchies: New Economic and Political Realities (1997), The Future of the Gulf (1997), The Persian Gulf at the Dawn of the New Millennium (1999), American Oil Diplomacy in the Persian Gulf and the Caspian Sea (2003), Israel and the Persian Gulf (2005) and Nuclear Proliferation in the Middle East (2007).

i Jose Manuel Durao Barroso, "Towards a New Energy Future: Showing Solidarity and Embracing our Interdependence," Available at <http://ec.europa.eu> (Accessed 24 April, 2009).
ii International Energy Agency, Natural Gas Market Review 2009. Available at <http://www.iea.org> (Accessed 29 June 2009).