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New EU Energy Commissioner Seeks Balanced Russia Policy

Guenther Oettinger (right) will need to balance political and commercial concerns with Azerbaijani President Ilham Aliyev.
BRUSSELS -- Germany's Guenther Oettinger has been nominated to one of the most powerful positions in the EU's executive arm.

The energy commissioner straddles economic and foreign policy, exercising a potentially crucial influence over policies in areas such as climate change, the bloc's economic rejuvenation, and relations with Russia, the Caucasus, and Central Asia.

It was clearly with Russia in mind that Berlin targeted the energy portfolio for Oettinger, a regional-level mover and shaker in German politics. Germany's central location on the European continent means it has a vital geopolitical interest in maintaining a stable relationship with Russia, politically as well as economically.

Oettinger's performance during his three-hour grilling by the European Parliament's Foreign Affairs Committee was therefore very much a balancing act. On the one hand, he argued, an overdependence on Russian energy deliveries is bad for Europe. On the other, Russia must not be alienated.

This was manifested by Oettinger's cautious approach to the strategically key issue of the planned Nabucco gas pipeline -- designed to tap into reserves surrounding the Caspian Sea and transported in a way that circumvents Russia. Giving the EU a means of directly reaching Azerbaijani and Turkmen energy is a good thing, Oettinger said -- but added the effort must not alienate Russia.

"I also see an opportunity to complement our dependence on Russia -- thereby limiting it -- without taking anything away from the partnership with Russia that has been formed over the past decades and will continue to be developed in the decades to come," he said.

Russia is seeking "influence" in Europe, Oettinger acknowledged. But the EU must not panic and make dependence a "two-way street" by engaging Russia in a wide-ranging partnership of investment and trade.

More Solidarity Needed

Fears of Russia's leverage appear statistically well-founded. It currently accounts for 50 percent of all EU oil and gas imports, and given current trends, that proportion is set to rise to 70 percent by 2020.

Governments in Poland and the Baltic countries complain that Russia is using its dominant position as an energy supplier for political gain. The four countries are still smarting from a Russian-German deal to build the Nord Stream pipeline across the Baltic Sea, an ecologically controversial project that may eventually provide the EU with one-10th of its current gas consumption -- 55 billion cubic meters (bcm) a year.

Warsaw, in particular, is also alarmed by Russia's apparent intention to freeze out middleman transit countries, above all Ukraine, with its South Stream project, which would pipe natural gas to the Black Sea and onwards to Bulgaria and countries further west.

Oettinger today tried to assuage Baltic and Polish concerns, saying he is aware that the Nord Stream deal between Berlin and Moscow was "lacking in solidarity" for some of the Eastern member states. He said he would strive towards "Europeanizing" such deals in the future. The EU must negotiate with non-EU supplier and transit countries so that none of its member states are disadvantaged, Oettinger said.

But the commissioner-designate also conceded that, for the time being, energy policy remains within the purview of the EU's national governments. Nord Stream, therefore, is a done deal, subject to the sovereign right of member states to pick their own investments.

Analysts, too, warn that the nexus between energy and international politics is unlikely to weaken in the foreseeable future.

Alexander Rahr, director of the Russia-Eurasia program at the German Council on Foreign Relations, told RFE/RL that the energy trade is infused with political leverage which no country can afford to ignore.

"I think that the gas issue is politicized [no matter what]. Gas is becoming a very important tool, not only in Russia's hands, but in the hands of the transit countries too, [a tool that has] political significance in Europe," Rahr says.

"Gas is a very important factor because the European Union has [few of its own] resources, and this asset will become more and more important."

Divisive Issues

Oettinger's German provenance and reported close links with heads of the German energy giants RWE and E.On have fuelled suspicions about impartiality in his new role. Parallels are drawn with Germany's ex-Chancellor Gerhard Schroeder, who is now on the payroll of Gazprom, Russia's state-owned energy major.

Energy policy is also a divisive domestic issue in the EU, given its role as a factor in climate change and economic growth. Oettinger today took pains to sidestep controversy, affirming his commitment to "decarbonizing" the EU economy in line with the bloc's pledge to meet agreed cuts in greenhouse-gas emissions by 2020.

Oettinger responded with particular care on questions on the future of nuclear energy, an issue that has split the EU down the middle. Although it is an alternative to fossil fuels -- and, by implication, to Russian gas and oil imports -- nuclear energy carries potentially immense risks.

A number of EU member states, Germany among them, have rejected its use or are in the process of phasing it out. Others, like France, Britain, and Finland, remain avid backers.

Forced, time and again, by deputies from eastern member states to address the foreign-policy implications of energy imports, Oettinger underlined the need to balance political calculations with commercial considerations.

Oettinger noted with the Nabucco project that it's necessary to discuss "how to deal with countries which do not always respect our basic values. On the other hand, energy [carriers are offering] a raw material, a product, and I intend to reduce [excessive] dependence by means of increased delivery capacities."

Azerbaijan, the projected main supplier of Nabucco in the short term, is not a democracy. Turkmenistan, which the EU hopes will start contributing to the project from its massive gas reserves at a later date, is a repressive regime of the worst kind among those the bloc has dealings with.

Neither inspires total confidence in the EU on commercial grounds, either. Turkmenistan has alarmed the EU by its decisions, made in rapid succession last year, to supply 40 bcm to China, 20 bcm to Iran, and 30 bcm to Russia on an annual basis. The combined volumes, officials in Brussels fear, come close to exhausting the country's export capacity.

Azerbaijan, too, has flirted with Russia from time to time, putting a question mark on Nabucco's long-term commercial viability.

Oettinger today said he hopes a final decision to build Nabucco will be made this year.