The analysis from the document on energy adopted by the G8 Summit and the large-scale manoeuvring that has multiplied in this area (see this section yesterday and day before) will in my opinion allow for some general conclusions to be drawn. Therefore:
1. A debate concluded. The debate on the participation of the public authorities in the “large-scale manoeuvring” on energy, for which I provided an insight yesterday, has definitively been concluded (if indeed it had at all really existed). The public authorities don't just have something to say about it: they represent the first point of discussion, even when they don't admit this openly, in fear of appearing like infidels to their credo of freedom of the markets. Those who do not have official responsibilities do not have the same dialectic foundations. Tommaso Padoa Schioppa was still not a minister (he chaired the “Notre Europe” Association) when he declared that in energy, the free market does not exist because security of supply is at the centre of any international strategy, political, military or what ever. Now that he is a minister, he has certainly not changed his mind. In fact, even the country in the avant-garde of those affirming that companies are free to make their choices on the markets - I'm talking about the United Kingdom - has made at least a partial exception for energy. Gazprom's attempt to take over Centrica provoked an outcry in London that was so loud that at the Saint Petersburg summit, Vladimir Putin, in his praise of British companies' dynamism in Russia, ironically pointed out that he wanted Russian firms to “have the same chance of working in Great Britain”. Tough negotiations are on the cards and we cannot make a safe bet that the public authorities on either side will be following the line very closely.
It's in this context that I expressed the opinion yesterday that Russia would not ratify the Energy Charter, as it intends to play its hand of quid pro quo and not that of a general legalistic strategy.
2. Cooperation destined to develop. Everything would suggest that beyond the polemic and difficulty of the negotiations, the EU and Russia will cooperate more and more closely because the demand to do so is reciprocal and the interests complementary. Differences and litigation even have, according to Daniel Yergin, president of the Cambridge Energy Research Association, an “edifying” role. Moscow has taken, or is in the middle of unambiguously taking control of the energy sector (with methods, it is true, that sometimes appear a little too off-hand) but is at the same time increasingly integrating into the world market. At the end of the process, the Russian system will consist of firms that will of course be companies of the State and subject to the public authorities, but with an increasing participation of foreign shareholders who will bring enormous investment. Russian companies will also be active in western markets and create an inter-penetration of interests.
Nevertheless, it is necessary to underline the fact that some political forces (in Poland, in some Baltic countries, Hungary and the Ukraine) believe that we can't trust Russia (especially since Mr Putin's affirmation that the collapse of the USSR has been a political disaster for the whole world). For information on this subject see the article by Witold Orlowski, director of the Polytechnic of Warsaw, in the most recent issue of “the letter by Confrontations Europe”. But there is no alternative and Europe has some good cards to play. It has to play the game, playing tough and remaining on its guard but with confidence in its strength.
3. Turkey's role. In the large-scale manoeuvres taking place, the country assuming more importance is Turkey and it is undeniably the alternative country for transit and, politically, could play a decisive role in the region where it has irreplaceable historic and cultural interests. This is all very positive because I have thought for a long time that Turkey should play its cards by using its strategic position autonomously, as well as its historic, cultural and linguistic links (see this section in No. 9221).
4. Oil prices encourage change. Looking ahead, certain observers believe that oil price rises are positive. It has made alternative energies that already exist profitable and had lead to a plethora of research and a number of unprecedented discoveries (in large part off the wall of course). And, above all, a flood of capital: the big oil companies themselves are increasingly investing in alternative energies. And if they themselves are preparing for the post-oil era why not believe it? Could the excessive cost of oil be transformed into the opportunity only dreamt of for being free of dependency upon it? Nature and history sometimes like paradoxes.
(F.R.)