Russia risks losing EU contracts for energy supply
The European Union yesterday warned Russia
The European Union yesterday warned Russia that it must guarantee the reliability of all future oil and gas supplies to Europe or risk the loss of energy contracts and a scaling-down of political contacts, according to The Guardian.
"We have told them [Moscow] that the disruptions to oil supplies we have seen in the last few days must never, never happen again," Andris Piebalgs, EU energy commissioner, told the Guardian.
The EU`s stern warning, also delivered to Belarus, came as oil supplies to a handful of European countries hit by the dispute resumed in full after three days of disruption.
A letter from Mr Piebalgs and Germany, current holder of the EU presidency, expressed strong disapproval of the way the dispute had affected reliable external customers and urged the pair to settle its root causes as soon as possible.
The row between Russia and Belarus erupted when Moscow doubled gas export prices and imposed crippling export duties, prompting Minsk to slap oil transit duty of $45 a barrel on Russian oil piped across its territory. Moscow closed the Druzhba (Friendship) pipeline that supplies Ukraine, Germany, Poland and other east European nations for more than 60 hours, cutting EU supplies by 1.6m barrels a day or 12% of its total imports.
As Europe flexed its muscles, Mr Piebalgs said: "We are paying for these energy resources and are never late in our payments. We have a right to insist that you never disrupt supply."
He made plain that Russia`s credibility as a secure supplier was on the line.
Ruling out immediate retaliation as the EU was not in dispute with Russia, he warned that refiners in several European countries hit by disrupted oil supplies could sue Moscow for breach of contract.
"If there`s disruption of supply, it`s not retaliation that`s required but appropriate action ... Or you simply conclude that this partner is not worth your trust and you don`t make any more contracts or take political consequences such as reducing contacts," he said in an interview.
The EU, which imports a quarter of its oil and 42% of its gas from Russia, is considering strengthening its defence mechanisms by greater pooling of its reserves - especially gas.
But Mr Piebalgs said that the way to reduce over-dependence on Russian supplies was to generate Europe`s own energy resources through renewables. Mr Piebalgs, the co-author of Wednesday`s energy strategy which would commit the EU to an energy mix containing 20% renewables by 2020, said: "If you import oil and gas you are importing carbon and we need to produce our own low-carbon energy here."
He called for increased investment in solar and wave power and said that these technologies could reduce dependence on supplies from overseas. He also urged the EU to adopt his plans to cut consumption by 20%, pointing to the success of UK retailer Tesco in improving the energy efficiency of its new stores by up to 50%.
"Renewables, efficiency and investment in research are the three answers to the problem of security of supply and not fighting the Russians," he said. "This is not a Russian dilemma but one of the entire developed world in replacing dwindling oil and gas in the medium term."
Mr Piebalgs also confirmed that the commission favoured the construction of new, low-carbon nuclear plants in countries willing to embrace that technology. But, he said, this could only be done after a full political debate on issues of safety, decommissioning and waste-disposal. Countries closing down older atomic plants must replace them with low-carbon alternatives, he added. "You can`t simply opt for old-fashioned coal-powered plants."