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EU: Europe Facing Hard Choices In Russia Energy Deal

The European Union is seeking a strategic energy partnership with Russia to last the next 20 years. Moscow has welcomed the idea, but it wants the EU to drop its support for the U.S.-backed Baku-Ceyhan oil pipeline. Russia also wants any transit routes to Europe to bypass Ukraine, threatening to cut off one of that country's main sources of income. RFE/RL Brussels correspondent Ahto Lobjakas explores the issue.

Brussels, 13 October 2000 (RFE/RL) -- The EU has decided to turn to Russia for some of its oil needs to reduce the continent's dependence on OPEC.

A long-term agreement with Russia would benefit Europe by allowing it to diversify its energy sources, but it would also force EU officials into some difficult policy choices.

Russia has already indicated that its assistance would come at a price.

Russian deputy prime minister Viktor Khristenko told EU leaders in Brussels a few weeks ago that Russia wants its energy transit to bypass Ukraine. Russian officials widely suspect Ukraine of illegally siphoning off energy and pocketing the profit.

And Russian Deputy Foreign Minister Ivan Ivanov said earlier this week that Russia also wants the EU to drop its support for the Baku-Ceyhan pipeline, sponsored by the US and Turkey. The pipeline, if completed, would bypass Russia.

The EU does not have a cohesive energy strategy at this stage, but has been prompted into formulating such a strategy by the recent rise in world oil prices and by widespread protests by citizens complaining about high taxes on fuel.

A high-ranking EU delegation met with Russian officials earlier this week in Moscow to discuss energy matters. And at the end of the month, Russian and EU leaders will hold a summit in Paris.

Michael Emerson is a researcher at the Center for European Political Studies in Brussels.

He says the EU is likely to view its cooperation with Russia as a strategic move aimed at diversifying its energy supply.

"One would naturally expect the European Union to seek diversity of supplies, it wouldn't want to be anybody's hostage. Being such a dominant buyer of oil and gas in this part of the world, the EU would do well to maximize its sources of energy."

Observers call the EU proposal for energy cooperation with Russia the "Prodi plan," after European Commission president Romano Prodi. He was the first to present it to Russia.

The plan envisages a swap of Russian energy for EU assistance. It was largely worked out between Germany and the commission.

Russia has large energy reserves, but has little resources to exploit them. The export of gas and oil requires expensive transit facilities.

Under the Prodi plan, the EU would use its political influence and technical assistance to channel foreign investment into Russian energy transit. In return, Russia would guarantee the EU a significant supply of energy for the next 20 years.

Emerson says the EU is likely to promote an even-handed approach to transit routes, supporting the idea of multiple pipelines. This is borne out by the Commission's external relations spokesman Gunner Wiegand, who says the EU has no official strategic preferences. According to Wiegand, the deciding factors as to transit routes must be commercial viability, private sector interest and their multiplicity.

Yet the placing of transit routes has obvious geo-political implications. Moscow's desires to bypass Ukraine and have the Baku-Ceyhan route scrapped both stem from strategic considerations.

Emerson says that while Russia and the United States are involved in what he called "great games" of strategy, the EU was not willing to view its choices in such terms.

"The EU finds itself in a 'judgment of Solomon' situation here. The EU loves both Ukraine and Russia equally -- as far as I know. So the idea of doing something to help Russia in its games vis-a-vis Ukraine is not something that the EU would be wildly enthusiastic about. On the contrary, the natural position of the European Union is to support the general legal order for the transport of energy in Europe."

Although the EU has not said officially how it would respond to Russia's request to bypass Ukraine, there are signs of nervousness in neighboring countries. Poland's Minister of the Economy, Janusz Steinhoff, recently said Poland would reject any transit arrangements that went against Ukraine's preferences. But some reports say Russia has put diplomatic pressure on the EU to overcome the Polish objections.