- Ties between Moscow and Brussels are frayed because of the Ukraine crisis. This week the G7 reaffirmed that divide – favoring self-preservation over new energy alliances.
- An intra-Europe rift is opening up between the European Commission, which wants to stop the building of another Russian gas pipeline to Europe, and many southeastern European countries that rely heavily on Russia for energy.
- The Ukraine-Russia energy crisis continues. A deal seemed within reach at talks in Berlin this week, after Ukraine's state-owned gas company Naftogaz made an initial repayment of $786 million for Russian gas it had already used. But it was unclear when or where the next meeting between negotiators would take place. Russia has threatened to cut off supplies June if more of Ukraine’s debt is not repaid and a new gas deal in place.
The sharpest words of the week came from the G7. After two days of meetings in Brussels, leaders of the major industrialized nations condemned Russia's use of energy as a weapon, and reaffirmed European nations' efforts to secure and diversify their own supplies.
"The use of energy supplies as a means of political coercion or as a threat to security is unacceptable," G7 leaders wrote in a declaration Thursday. "The crisis in Ukraine makes plain that energy security must be at the centre of our collective agenda and requires a step change to our approach to diversifying energy supplies and modernising our energy infrastructure.”
European nations are preparing emergency energy contingency plans ahead of this coming winter in case the Ukraine-Russia talks fall apart. The G7 leaders pledged Thursday to work together with the International Energy Agency and the International Renewable Energy Agency to develop Europe's domestic fossil fuels and renewable energy and efficiency potential. That includes boosting Europe's ability to import liquefied natural gas, according to the G7, and strengthening its own internal pipeline connections. Efficiency can also play a role, particularly in a country like Ukraine where aging plants and gas subsidies promote energy waste.
"The situation in Ukraine has also highlighted the need for greater energy security," President Obama said in a press conference with British Prime Minister David Cameron Thursday. "We’re going to help countries in Central and Eastern Europe strengthen their energy security as well. And following the review I called for in the United States earlier this year, every G7 country will conduct an energy assessment to identify the possible impact of any potential disruptions and to offer ways we can better prevent disruptions and recover from them more quickly."
About 30 percent of Europe's gas imports come from Russia, and half of those go through Ukraine. Europe remains by far Russia's largest energy customer despite a recent major gas deal with China. That isn't likely to change anytime soon. Russia's state-owned gas giant Gazprom is already moving ahead with plans to build the South Stream pipeline, which would would deliver 63 billion cubic meters of gas per year to Europe without going through Ukraine.
The European Commission has been fighting to stop the pipeline, saying it violates European Union competition rules, and has ordered Bulgaria to stop construction on the project. So far, that’s had no effect on EU member Bulgaria. Its economy and energy minister said in a state interview that South Stream was a priority project. Serbia echoed the sentiment Thursday.
"There are no plans to delay construction," Serbian Energy Minister Aleksandar Antic told Reuters. "I believe the European Commission and member states will find a solution because this is a European project in the best interests of energy security."