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Press release

Russia and Ukraine both lost credibility as reliable energy providers say MEPs

Energy - 14-01-2009 - 19:19
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The European Parliament debated the latest developments in the Russia-Ukraine-EU gas crisis with many group speakers stressing that Russia and Ukraine should solve their disputes rapidly without blaming one side or the other. EU citizens are suffering, MEPs said, due to a bilateral dispute. MEPs said that both Russia and Ukraine had lost credibility as reliable partners and the EU should therefore increase its efforts to diversity its energy supply mix.

Alexandr Vonda, Czech deputy prime minister for European affairs, outlined the events leading up to the crisis, including the contacts between the Czech presidency of the EU and Russia and Ukraine.  He also described measures agreed by the Council for tackling the gas supply problem. 
The minister said the key objective of the Presidency had been to have gas supplies restored immediately and he assured the House that everything was being done, at political and technical level, to prompt Ukraine and Russia to restore full contractual gas supplies to Europe "and to minimise the negative consequences to our citizens and economies until that is the case".
However, the Czech Presidency was also aware of the consensus among the Member States that short, medium and long term solutions be adopted without delay that would prevent similar situations from recurring in the future.  
These would include "the creation of a functional and efficient solidarity mechanism" as "one of the corner stones of the future EU energy security". This solidarity "presupposes interconnection of European energy networks as well as improvement of energy infrastructure" among other things.
Furthermore, "the EU needs to diversify its gas resources and supply routes.  In addition, it was clear that "EU energy security is not feasible unless internal energy market is completed and functional. He looked forward to close cooperation with Parliament on the second reading compromise on the Third Energy Package.
European Commission
"We are living through one of the most serious energy crises yet - comparable with the 1970s oil crisis", said Energy Commissioner Andris Piebalgs.
"Despite promises and the protocol signed on Monday, gas is not yet flowing from Russia through Ukraine", he admitted, noting that although Russia had resumed gas deliveries on Tuesday (at one-third of normal flow), Ukraine had stopped them, arguing that Russia had chosen a difficult entry point, and that this had happened again on Wednesday.
"The two parties must co-ordinate on entry points and volumes", failing which "there will be no energy supply" said Mr Piebalgs, adding that both had "lost their reputations as reliable energy suppliers".
Mr Piebalgs believed the measures taken to be "sufficient", but still saw a lack of contact and co-ordination.  "The solution is in the hands of the two parties - but do they want a solution?", he asked.
Any fix now would be temporary, and negotiations for a lasting solution could continue through the EU's Czech Presidency to the Swedish one, he predicted, stressing the need for strategic energy policy decisions to reduce reliance on external suppliers.
Mr Piebalgs also highlighted a "lack of interconnection infrastructure" for carrying gas from storage to where it is needed, saying there was not enough commercial interest in providing such connections.
The 2004 gas supply security directive (2004/67/EC) does not meet current needs, and a proposal to revise it, including a "Community co-ordination mechanism" will reach Parliament in the coming weeks, said Mr Piebalgs.
Mr Piebalgs thanked the European Parliament for its conciliation efforts, and in particular President Hans-Gert Pöttering, and Jacek Saryusz-Wolski (EPP-ED PL). The political weight of debates like this one would encourage the parties to resolve their disputes, he said.
Political group speakers
Jacek SARYUSZ-WOLSKI (EPP-ED, PL) said that major supply disruptions like these are "dramatic for citizens, industry and jobs" adding that "in the elections, we shall have to answer questions about what we have done".
The first such crisis, three years previously, had made it clear that "we need a common policy on energy", said Mr Saryuzs-Wolski. The EPP-ED group had backed this call from the start, and its call for a comprehensive strategy had in turn been backed by all groups, he continued.
The Commission had taken up some recommendations, this but was not enough to prevent similar situations, he continued, stressed the need for lasting, systemic solutions which he said would entail the EU speaking with a single voice to producers and transit countries. To this end, he asked: "Can we buy direct at the Ukrainian border? Can the EU step in and take up transit issues with Ukraine? What instruments of pressure does the EU have?"
The EPP-ED group wants Parliament to be permanently and closely involved, and has already established a contact group with the Russian and Ukrainian parliaments, he concluded.
Hannes SWOBODA (PES, AT) said that from the discussions the Parliament has had with representatives of Gazprom and Naftogaz, he could agree with the Commissioner that neither company has been acting responsibly.
He expressed concern that the current situation could have been foreseen and we needed now to draw the consequences so that such a crisis could be avoided in the future.
It is one thing for us to talk about gas market liberalisation, he said, but we need to be creating a lot more inter-connectors between countries, like the Nabucco pipeline, and the market will not be creating these.  It is the same for gas reserves, he said: "It is unacceptable that some countries have only limited gas supplies or do not inform the other countries what reserves they really have."
Speaking for the ALDE group, István SZENT-IVÁNYI (HU) said that Europe cannot be held hostage any longer since millions have no heating and hundreds of thousands are at risk of losing their jobs.
"We need to tell both Kiev and Moscow that they must live up to their international commitments and that there will be serious consequences if they do not - we have to make it clear that there will be a political price to pay."
Hanna FOLTYN-KUBICKA (UEN, PL) said that the gas crisis is a long-term one and that it is not just economic but political.  "Behind Gazprom's demands is the political machinery of the Kremlin and the Kremlin is attempting to extend its dominance across the countries of Central and Eastern Europe."
Rebecca HARMS (Greens/EFA, DE) congratulated the Czech Presidency on its handling of the gas crisis, claiming that "nothing could have been done better than we what we have done so far". Noting that the gas dispute and commodities trade were merely elements of a bigger picture, she said it is important to clarify the EU's stance on the matter. "What is the EU going to do vis-à-vis countries that are sitting on the fence somewhere between Russia and the EU?" she asked.
Speaking on behalf of GUE/NGL, Esko SEPPÄNEN (FI) unwillingly thanked the Commission for playing the role of mediator and "psychiatrist" in the Russian and Ukrainian dispute. He said EU sanctions "are not the right approach", pointing out that not all countries were in a position to boycott Russian gas.
Gerard BATTEN (IND/DEM, UK), quoting a previous speech made by his fellow IND-DEM MEP Godfrey Bloom, said that the idea of the UK's energy supplies being controlled by "a gangster like Vladimir Putin" was madness.  The UK must ensure it held on to its own "dwindling natural gas supplies" and did not subordinate them to a common EU energy policy.  It should also "embark on a programme for building new nuclear power stations".
Jana BOBOŠÍKOVÁ (NI, CZ) maintained that the poor in particular were "paying a high price for the EU's short-sighted energy policy".  Some Union Member States, she argued, had stood in the way of a strategic agreement with Russia, preferring instead to back the Ukrainian Orange Revolution. "We see now how important it is for individual Member States to be energy self-sufficient", she concluded.
British MEPs in the debate
Giles CHICHESTER (EPP-ED, UK) said that Member States are at risk of over-dependence on gas imports from one dominant supplier and "we need to take action to safeguard security of supply." Member States must bite the bullet and be prepared to pay for adequate gas storage facilities and stocks. Agreeing a level of how many days’ supply constitutes a reasonable reserve would be a good start, he said. Diversifying supplies is another obvious step to take and the construction of LNG terminals around Europe is a good example. Looking at the Nord Stream and Nabucco pipeline projects in a more favourable light seems logical. We need to redouble efforts to improve efficiency and increase conservation of energy in electricity consumption – both in industrial use and domestic consumption. There are huge savings to be achieved.
Above all, he said, we need to rebalance our energy mix and to do so with the twin objectives of security of supply and climate change policy. By increasing the share of electricity from renewables, nuclear energy and clean coal technology, we can do both, but each of these options takes time to deliver and, in the mean time, we must tackle improving energy efficiency with urgency and imagination.
Charles TANNOCK (EPP-ED, UK) said that Ukraine is currently obliged to pay an intermediary company an extra USD 500 million a year. Given that Ukraine’s gas debt to Russia is USD 2.4 billion, the debt could have been wiped off in about five years by scrapping this payment, which, allegedly, according to the deputy prime minister of Ukraine, ends up in the pockets of corrupt politicians. We need, he said, to resist any attempt to drive a wedge between Ukraine and its future with the West, and in particular its future as a full member of the European Union. The best way to ensure that Russia can no longer bully or put pressure on Ukraine, or even provoke the EU into bullying Ukraine to settle, is to champion a common EU external energy security policy which will show solidarity between the Member States at times of crisis and energy shortage.
John PURVIS (EPP-ED,UK) drew three conclusions from the impasse with Russia and Ukraine.
1 Reduce dependency on gas, more and more of which will have to be imported. This means increasing our commitment to indigenous energy, including especially renewables and nuclear power. 2. Improve EU solidarity with mutual support between the Member States for electricity, gas and oil supplies. This implies much improved and extended grids and pipelines. These gaps in the gas grid must be closed, urgently. What is the timing for this, Commissioner Piebalgs? 3. Diversify our sources of supply and our storage facilities for gas and oil. Why are we not making fuller use of the depleted southern North Sea gas fields for storage?
Our liquefied gas infrastructure, he said, must be greatly expanded and pipeline systems developed from alternative sources and through alternative routings. We need better and more connections with Norway, with North Africa and West Africa, with the Caspian and Caucasus, with the Levant and Gulf States in the Middle East.
Concluding, Mr Purvis asked the Commission and Council if they are promoting renewables and nuclear urgently enough, investing sufficiently in the construction of pipelines and LNG terminals and in developing the political relationships which will ensure continuity and diversity of supply.
Fiona HALL (ALDE, UK) highlighted the importance of controlling energy demand. We have, she said, a 20%-by-2020 EU energy efficiency improvement target and a number of pieces of legislation focussed on energy saving. These energy efficiency actions will not only help to tackle climate change and fuel poverty: they will also very significantly improve Europe’s energy security. There is of course a good reason why the Commission’s action plan on energy efficiency has an international element to it and recognises the importance of encouraging energy efficiency improvements in countries outside Europe, not least countries supplying and transiting energy to Europe. The fact is, if they use less, we are likely to get more. That is important above and beyond the immediate political side to this crisis.
Eluned MORGAN (PSE, UK) highlighted the need for the EU to speak with one voice on energy issues.  Negotiations on the second reading of the energy liberalisation package will be starting shortly, she said. The Commission came up with a very carefully crafted position on third countries investing in the EU, suggesting that the Commission speak on behalf of the EU on these issues. "What have you in the Council done? You have retreated to national positions and said, no – we Member States we want the final say, not the Commission.  Until you understand, she said, that pooling your powers to gain more leverage internationally is the way to go, we will always be in a position where we are vulnerable. You must answer the European citizens as to why they are now sitting in the cold. You have to change your position on this line. Will you do so?"
REF.: 20090113IPR46101