ENERGY: THE ACHILLES HEEL OF THE WORLD ORDER!
First the crude materials’ prices increased. Later on prices of electricity, oil and other fuels increased. Even the side effects are left aside; the price of energy – one of the most significant cost items in economy - keeps going up. Rising energy prices directly drops the power to buy and increases the risk of inflation. However, the danger is even greater than this.
This process that negatively affects especially the people with low income is being felt in the EU and all other corners of the world. It is possible that the “economic problem may turn into a social one” in a short while. Energy may become a kind of “luxury consumption” by the end of this process. On the other hand, rise in energy prices and emergence of a series of problems due to this change may also cause a bunch of positive developments. For example; energy markets and national economies may prioritise restructuring that they will have to do sooner or later.
Speculators, lack of resources, insufficient capacities of refineries and political instabilities are shown as the causes of the energy problem of current times. They may each have a part to play. However, under all circumstances, the “energy” issue brought a new and fine difference into balances of global policies. It can be said that all economies and sector balances are “fragile” from now on. That’s why; in a bid to be ready for the challenges of our time, some classical questions need answers that are not classical.
What is security?
Once upon a time, security was limited with the meaning of border security. It was a concept that was related to “domestic security” and the border security a great deal. With the enlargement of asymmetric threats in recent past, the security concept gained a more global meaning. This fait accompli came with the global crisis that made it harder for countries to provide for their own security in traditional means and with their own decisions. But, as well as those approaches, a new tendency is getting more effective everyday. Energy, the basic input of great economies is the main requirement of “all systems” to produce more and to consume more.
For this reason, one cannot claim that countries that fail to provide “cheap”, “secure” and “continuous” energy supplies have security in real sense. In the end, those countries or even a country that is advanced in the global economy with a prosperous society have little to do in case the valve of the pipelines that provide energy supply is shut down due to a “technical problem” or “a dispute”.
It can be said that energy agreements are signed after taking into consideration even the smallest details, all possibilities and sanctions in the end of long negotiations. However, it should not be forgotten that we live in a mad age and energy is a strategic product as well as a commercial one.
Energy Dialogue
For this reason, the dialogue between “energy exporting countries” and “energy importing countries”, mutual and multilateral relations are far more important than some illusions such as “dialogue of civilizations” or “intercultural dialogue”.
EU and Russia
The data gathered signal that the EU may experience serious problems regarding energy safety in the next ten years. There is a fact behind the curtains of rapprochement between the EU and Russia and the efforts to consolidate this cooperation. When it is taken into consideration that Russia is the greatest energy supplier of the EU, it is possible to note that the relations between Moscow and Brussels are shaped according to this fact. Of course, it can also be thought that the EU-Russia cooperation may play a positive role in ending regional disputes, making world markets more stable and developing energy technologies.
Alongside the unbalanced distribution of energy resources across the world, use of energy as a political weapon and shaping energy sector according to both “commercial” and “strategic” preferences make the circumstances harder. No matter how EU-Russia energy cooperation seems like as a smoothly operating system when looked from outside, EU member states have been trying to increase their reserves to establish energy safety. This fact, which is among the reasons for soaring energy prices, goes hand in hand with a long term strategic planning.
On the other hand, there is another reason for Russia’s uneasiness with the EU, as important as the EU efforts to increase their reserves. The EU Commission does not want foreign capital to be effective in energy markets. The Commission says that this is necessary for Europe’s energy safety. However, Russia believes that this approach is against “cooperation and partnership spirit”.
From Russia’s stand point, the European market is not the sole option, and no matter how much importance it has. Rising Asia and especially China are other attractive options for Russia. Russia will start to sell natural gas to China starting in 2013. Gas export to China from Siberia is comparatively easier and more profitable than exporting it to Europe. Russia is disturbed by EU’s pre-conditions and its efforts to dominate. Neither the EU nor Russia wants to surrender. It is a significant fact that Russia can provide EU’s energy safety in the 21st century but commercial and political costs of this comfort are quite important for the EU too. Current agreements show that cooperation between the sides will continue until 2030 “uninterruptedly and clearly”.
But as Gazprom’s manager responsible of foreign relations Stanislaw Zygankow voices at every opportunity, harsh rules set by the EU Commission to limit foreigners in energy production and distribution must be discussed in terms of regulations in order to mutually protect the investments. The EU finds itself in a position to hear former communist Russia’s warnings on “protection of free enterprise”, “freedom of capital” “globalisation”, “protection of possessions” and “not intervening to free market”. The EU is uncomfortable between “state inspection” and “investment policy” regarding Russian issues.
The EU Commission does not want to hand Europe’s energy security over to foreign cartels. But Zygankow says only the great companies could realise the investments and pipelines Europe is in need of; because, failure of Gazprom in materializing those investments or its withdrawal from the market may increase the prices. These remarks by Zygankow express that Russia may have hardship in the future in providing energy safety for Europe.
This situation creates an “impasse” in EU-Russia relations. This impasse in the energy dimension of EU-Russia relations is very important for transit countries too. Moscow is insistent that the EU does not follow liberal policies in energy issues in reality. However, it is not a false diagnosis to say that Moscow first reached the boundaries of former USSR, later on of Warsaw Pact and now it is about to cross the remaining borders with companies lie Gazprom and Lukoil, instead of the Red Army and SS-20 missiles.
Europe and Russia have had ups and downs in relations throughout history. Common interests have never been decisive. Cooperation periods were short and went parallel to real competition. That’s why; Russia is struggling to count on documents that are not binding for EU members and to take those documents as a basis. Moscow fairly thinks that the EU does not want to have cooperation with Russia but wants to neutralise it.
Russia believes that concepts that sit on the background of political demands directed at it from the EU, such as “forming a common energy zone” and “establishing common interests” have no contents Moreover, Moscow refuses the message of “necessity to overcome its fears” from Brussels, with a point of view that “it has got nothing to prove to anyone”. Of course, there is another significant possibility: Although the EU is demanding of Russia today, its following a full liberal policy in energy may create a result where Russia becomes similarly demanding.
Knowing to wait
Neither the EU Commission can take back its decisions on energy policies nor can Russia change its energy policies. Cooperation between the sides will continue. Commercial relations shaped by the effect of politics, developments in the Asian market and “bilateral and regional” issues will keep evolving. Meanwhile, changing circumstances will shape new balances. Maybe Russia or maybe the EU will grow weaker. Then, one side will easily dictate to the other.
Russia is cool-headedly waiting the start of the new period, so is the EU. In the post-Putin era, Moscow is approaching the West with a more cooperative attitude. The “German card” is very important for Kremlin and it wants to use it in the best way in relations with the West. That’s why; in the list of priorities prepared behind the Urals consists eased down visa restrictions mutually with the Germans. Even a German-Russian free trade zone is mentioned. German-Russian free trade zone may end in the accession of Russia to a partial customs union with the EU, in practice.
Russia wants to establish an energy alliance and climate protection alliance with the EU – rather with Germany – too. Moscow who wants to consolidate cooperation with Berlin in global security issues too and thinks that those steps would contribute to Russia-EU relations’ modernization. But in the final evaluation, it is certain that Medvedev will not follow a line different than Putin’s one. Medvedev will enforce rule of law and free market economy in Russia and at the same time he will follow more liberal policies in the Russian energy sector. Medvedev is thinking first to take steps that will be welcomed by the middle class in Russia and materialize other steps with the power he will receive from the middle class.
If Medvedev is successful, Brussels may start to see Kremlin as its ally in former Soviet basin and especially in Southern Caucasus. Brussels, in this kind of a situation, may prefer 1990s’ popular concept “Berlin-Moscow axis” as an important instrument in Eurasia.

http://www.diplomaticobserver.com/news_read.asp?id=1898