ENERGY DIALOGUE WITH RAISED VOICES

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Gazprom and the European Commission exchange grievances

Gazprom Deputy CEO Alexander Medvedev has openly accused EU Energy Commissioner Andris Piebalgs of being incompetent, and criticized the European Commission for inaction during the Russia-Ukraine gas dispute. EC representatives replied that Russia will have to rebuild trust with EU member states before the energy dialogue can resume.


As the Russia-EU summit approaches, the energy dialogue between Moscow and Brussels has shifted to the level of personal public accusations. On May 19, Gazprom Deputy CEO Alexander Medvedev openly accused EU Energy Commissioner Andris Piebalgs of being incompetent, and criticized the European Commission for inaction during the Russia-Ukraine gas dispute in January. EC representatives replied that Russia will have to regain the confidence of each of the European Union’s 27 member states before the energy dialogue can resume. But it is already obvious that Europe’s new energy strategy entails cutting natural gas imports by 5% by 2020 and increasing the use of nuclear power as an alternative to gas.

In Berlin on May 19, at the fourth international conference “Russia-European Union Energy Dialogue: Gas Aspects,” Gazprom publicly stated its grievances against the EC for the first time, asserting that Russia-EU energy dialogue has reached a dead end.

Gazprom Deputy CEO Alexander Medvedev said: “Even in the Cold War era, we never heard declarations that the EU isn’t prepared to tolerate dependence on Russian gas for more than another 15 years. Under the circumstances, Gazprom has no prospects now. Honorable politicians – please leave it up to business to decide whose gas to use. In 2020, Europe will need 80-100 billion cubic meters more gas than it does now. And those statesmen who are trying to block our projects are taking too much upon themselves.” Alexander Medvedev went on to say: “Everyone, including Piebalgs, acknowledges that it’s impossible for Gazprom to manipulate prices. The most that such allegations indicate is a lack of professional knowledge.”

Alexander Medvedev spoke about the EC’s complete inaction during the Russia-Ukraine gas conflict. According to him, in December 2008 Russia “requested the European Commission to avert the crisis – but in January they informed us that they didn’t intend to intervene in an ordinary business dispute.” Therefore, according to Alexander Medvedev, the threat to EU security does not stem from Gazprom; it is posed by Russophobic politicians. In the past three years, Gazprom has lost around $30 billion due to Ukraine’s reluctance to make a transition to the very same common market principles that the EC is demanding from Russia. Moreover, said Alexander Medvedev, Gazprom still hasn’t received a straight answer to the question of why the EU is seeking to replace Russian gas.

An indirect answer came in the speeches of Domenico Dispenza, chairman of the European Union of the Natural Gas Industry (Eurogas), and Matthias Ruete, EC Director-General for Energy and Transport. They said that before accusing others, efforts should be made to restore trust between suppliers and consumers. For example, they noted that in the wake of the Russia-Ukraine dispute, Italy reactivated its nuclear power projects. Dispenza said that Russia ought to reconsider its attitude to the Energy Charter, since this is an open document supported by all EU countries.

E.On Ruhrgas CEO Bernhard Reutersberg said that gas would account for 22% of Europe’s energy consumption by 2020 (the current figure is 25%), and imports would be reduced by 5%. EC representative Ruete noted that in January, “residents of some European countries were unable to heat their homes for two weeks during critical weather conditions.” He repeated that the EC will continue efforts to liberalize energy markets.

Ruete let it be understood that if anyone can help reconcile the positions of Russia and the EU, it could only be President Dmitri Medvedev and EC President Jose Manuel Barroso, who are scheduled to meet tomorrow at the Russia-EU summit in Khabarovsk.

Experts couldn’t manage to achieve any substantial breakthroughs yesterday. In a clear attempt at shifting the emphasis from Berlin to Khabarovsk, Deputy Prime Minister Igor Sechin and Russia’s EU envoy Vladimir Chizhov cancelled their participation in the Berlin conference at the last moment. Russia’s energy battalions have been transferred from EU territory to the Russian Far East.

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