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EU: Officials Urge Policy Based On Energy Economics, Not Politics

European Union policymakers face a growing number of options about how they will receive future oil and gas deliveries from Russia and Central Asia. RFE/RL correspondent Ahto Lobjakas attended an energy conference this week in Brussels. He reports officials are urging the EU to base its energy decisions on commercial grounds rather than on political or strategic considerations.

Brussels, 27 October 2000 (RFE/RL) -- European Union policymakers face a number of difficult decisions in sorting out future suppliers and delivery routes for oil and gas coming from Russia and Central Asia.

Europe is a main consumer of energy from the region and the EU is being courted by a number of countries putting themselves forward as the best suppliers of energy or as offering the most practical transit routes.

A special conference is taking place in Brussels this week to promote a pipeline from the Romanian Black Sea port of Constantsa to the Adriatic Sea through Serbia and Croatia. The conference features participants from Romania, Hungary, Slovakia, Bulgaria, and Ukraine. All these countries are vying to be considered as part of the transit routes so that they can earn valuable transit fees.

In the past, the EU may have tried to balance economics and politics in deciding which routes to favor. But the head of the EU's INOGATE energy transit program, Faouri Bensarsa, says any future decisions should made on strictly commercial grounds:

"I would not suggest [to] you today and tomorrow to spend your time by doing politics. I would not suggest [to] you to spend figures and to spend time and to spend effort by trying to put again on the same scheme pipelines through country 'A' and country 'B,' and [a] route for the North and [a] route for the South. Forget about this."

Bensarsa says decisions must be made from a business-like point of view. He says this means the EU should first look at where the oil (or gas) is located and where the potential consumers are. Only then, should it draw up plans for how to transport the oil (or gas).

One of the main political dilemmas facing the EU involves Russia, which is planning a pipeline to bypass Ukraine and run instead through EU-candidate state Poland. The plan has drawn protests from Polish officials who don't want to upset neighboring Ukraine.

Russia also says it would like the EU to drop support for the planned Baku-Ceyhan pipeline via Georgia and Turkey. That pipeline, favored by the United States, would cut Russia out of the transit of much of Azerbaijani oil.

Efforts to de-politicize the EU's energy policy were reinforced by a separate gathering that took place in Brussels yesterday: the fourth round of negotiations of the Energy Charter Treaty.

The Energy Charter was founded in 1994 at the EU's initiative to coordinate energy transit after the collapse of the Communist bloc. Its main aims, according to one view, is to provide Western companies with investment opportunities in Eastern Europe and the former Soviet Union and to look after the energy security requirements of Western Europe. The charter has 51 signatories but is not ratified by Russia or the United States.

Valeri Sorokin, the deputy chairman of the energy charter, says he favors an approach where commercial viability is the key factor in determining transit routes. And he says this emphasis on commercial viability may even go as far as to limit the rights of transit countries to control the energy that passes through their territories.

"The idea is to [also] strengthen those provisions of the treaty and to develop them to the extent to which it will make it difficult for the transiting country to obstruct the construction of new facilities which can be used for [the] transit of energy, if it is not justified from the economic point of view."

This approach, if adopted by the majority of Energy Charter members, would go a considerable way toward cutting politics out of energy transit. On the other hand, it could also leave the transit countries at the mercy of calculations of commercial viability in which they have little or no say.