With the Ukraine crisis ratcheting up tensions between the European Union and Russia, Europe is more eager than ever to find other natural gas suppliers. But a proposed new Russian gas pipeline is making that difficult, and threatening to divide a continent that has pledged solidarity in Ukraine's wake.
This week, Russian officials pushed forward with plans to build South Stream, a 578-mile-long pipeline that would ferry up to 63 billion cubic meters of Russian gas under the Black Sea and into southeastern Europe. That route would bypass Ukraine, which currently transports the majority of Europe's Russian gas imports.
The project is highly controversial. Some tout the short-term economic benefits of added gas supply and infrastructure, while others worry about the long-term risks of an expanded relationship with a mercurial supplier.
Western officials have to some extent succeeded in blocking the pipeline's construction, on the grounds that it gives Russia increased leverage over Europe on Ukraine and other energy negotiations. But on Tuesday, a subsidiary of Russian gas giant Gazprom announced it had signed a contract with Serbia to begin construction on its section of South Stream. The same day, Italian foreign minister Federica Mogherini talked up the importance of the project in an interview with ITAR-Tass, a government-owned Russian media organization.
"South Stream has always been a project of strategic significance for Italy since it would help to diversify routes for the Russian natural gas supplies, eventually enhancing energy security both for Italy and the European Union,” Ms. Mogherini said, according to ITAR-Tass.
In the short term, South Stream could provide Europe with additional supplies of natural gas, a critical heating and electricity fuel, and economic opportunities for parts of Europe hit hardest by the global economic recession. It would also guard against any supply disruptions in Ukraine – something that has already happened twice before, and could happen again.
"What everybody understands but are not saying officially is the energy security issue is not about Russia supply but about the Ukraine transit route," Chris Weafer, founding partner of Macro-Advisory, a Moscow-based business and investment consulting group, writes in an e-mail.
Last month, Russia shut off gas supplies to Ukraine, after the former Soviet republic failed to pay down the billions Russia says it owes in unpaid gas bills. That hasn't disrupted flows to Europe yet, but a prolonged shutoff could complicate the future of Europe's energy supply.
It's why some, mostly in southeastern Europe, see South Stream as a boon to the continent's energy security. That's why after Ukrainian disruptions in 2009, Germany worked with Russia to build Nord Stream, a pipeline that sidesteps Ukraine to bring roughly 50 billion cubic meters of Russian gas to Western Europe each year. Now, Bulgaria and other countries along South Stream's proposed route say they are equally entitled to secure their own economic interests.
"Bulgaria’s political elites see it as hypocritical behavior given some EU countries that are demanding Bulgaria drop the project also receive gas shipments from Russia," Amanda Paul, an analyst at the European Policy Centre in Brussels, writes in an e-mail. "Hence EU solidarity is fragile because of the different situations of different member states."
But in the long term, more gas from Russia does little in the way of diversifying supply or make those supplies more affordable, says Kristine Berzina, a program officer on energy and society in the German Marshall Fund’s Brussels office. European countries that rely almost wholly on Russian gas pay some of the highest prices for it because they are negotiating with a monopoly. Another Russian pipeline also means paying for more infrastructure and gas supply on a continent that has seen flat or even falling energy demand. And Gazprom's tendency to own both natural gas supply and distribution goes against EU energy policy.
"Having Russia versus Russia doesn’t push down the price of gas," Ms. Berzina says in a telephone interview. "Having access to additional or different suppliers would help put prices down and help energy security in that particular sense."