Europe rejects Gazprom's ultimatum

By Aussiegirl

Putin's trying to throw his weight around, but it looks like Europe is having second thoughts about being manipulated.

EUROPE REJECTS GAZPROM'S ULTIMATUM - Eurasia Daily Monitor

EUROPE REJECTS GAZPROM'S ULTIMATUM

By Igor Torbakov

London moves to protect British firms from Gazprom. The European Union signaled that it was not particularly impressed by Gazprom's recent statement that it might seek alternative markets elsewhere if it is prevented from developing operations in Europe. Gazprom's warning came right after British competition regulators proposed changing takeover rules amid market speculation that the Russian energy monopoly might bid for Centrica, Britain's largest gas distributor. Gazprom's ultimatum and the EU's riposte appear to reflect different understandings of what energy security means, analysts say.

On April 20, a spokesman for the EU Energy Commissioner said that Gazprom's statement confirmed EU concerns about the bloc's dependency on foreign energy supplies. The European official added that the Russian company's aggressive stance would only strengthen Europe's intent to diversify both its gas suppliers and energy channels. [...]

But this directly contradicts Europe's perception of what "energy security" is. For EU countries, energy security means, above all, diversification of energy supplies, liberalization of the markets, and the presence of competition. Clearly, should Russia's concept of "energy security" be realized, Europe's space for maneuver and its diversification options would be significantly curtailed.

Furthermore, one of the key elements of the Russian concept of "energy security," now actively pursued by Gazprom, is the penetration of Europe's downstream markets. Brussels earlier indicated that it would be prepared to provide Gazprom access to EU countries' domestic markets under one condition: Russia must liberalize access to gas pipelines to other countries and independent producers. The Kremlin leadership and Gazprom bosses, however, have ruled out the prospect of losing their stranglehold on the strategic pipeline network.

Some Russian analysts suggest that if Russia and Europe do not reach an agreement soon, the upcoming G-8 summit in St. Petersburg, with its widely advertised focus on energy issues, will likely fail, as it will be devoid of any concrete meaning. According to one commentary, the heated debate between Moscow and Brussels is all but inevitable, since Russia's January "gas attack" against Ukraine "has radically changed European perceptions." If no common ground is found, the summit might well end up with the signing of an "empty declaration," the commentary adds.

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