Comfort from Jeremy Rifkin. It's just as well Jeremy Rifkin is there to comfort us when we get the impression Europe is not effective enough. In the past he eloquently defended the idea that Europe was leading the way in climate change and the energy revolution, and he is now defending Europe again, even more resolutely in his disenchanted comments on the conference organised by the United Nations in Bangkok, a conference whose conclusions were woefully inadequate in his view. As usual, he wrote in a picturesque and perhaps rather superficial manner, but very effectively. The 3 degree temperature increase on Earth, which he feels is the most likely, would take us back 3 million years to the Pleiocene Epoch, wiping out half of all life-forms on Earth, and it would take 10 million years for the current levels of biodiversity to be restored.
But he said that luckily Europe exists and it will be launching initiatives that are 'infinitely more important than the Bangkok conference'. He himself, Jeremy Rifkin, contributed in person to the drawing up of a European project to launch the third industrial revolution with the move to a post-fossil fuel and post-uranium economy in 25 years by scrapping hydrocarbons and other sources of energy used at the moment. How? I quote (not fully understanding, I admit, the mechanisms he describes, see [I don't know whether the comments are available in English - I quote from an interview with Jeremy Rifkin in Corriere della Sera] below) - renewable energy, stored using new hydrogen technology, could be transported anywhere in the world using an intelligent global network of internet technologies. Like in previous technological evolutions, this revolution will be possible through marrying new energy generation methods with the new communication system to allow 'the democratic distribution of alternative energy'. And it is Europe that will achieve all this, with the cooperation of six of the United States of America (led by California) and Canada. He says Europe is the most advanced with this new technology and will be self-sufficient in energy in the next 30 years. The EU, six states of the USA (all US states after 2008 with the election of a new president) and Canada will lead the revolution. China and India will follow. All this will be headed by a legally binding post-Kyoto Treaty governing all these countries.
Is 'Nabucco' dead? Awaiting better information on this rosy future, I will return to the more modest and less reassuring reality while thanking Jeremy Rifkin for the confidence and vitality he attributes to Europeans, the eternal sceptics. I will start with the question of oil and gas pipelines which is getting more knotted rather than untangling itself. I do not regret having restricted myself to energy policy in my previous overview (three commentaries in the week of 23-27 April), namely Russia's ambitions and the tentative European responses, and having asked questions, ending that I would write more when I understand more. But the situation is even more complicated than ever.
Hungarian Prime Minister Ferenc Gyurcsany has made a few astonishing statements. After signing an agreement with Russia to extend the Blue Stream gas pipeline to Hungary which would then be able to transport Russian gas and gas from other ex-USSR states through the Black Sea into the heart of the EU, he said that this involvement in Blue Stream meant Hungary would have to withdraw from the Nabucco project and the Nabucco project would therefore have to bite the dust. He said Nabucco had long been a dream but Hungary had had enough of beautiful dreams. To the objection that this would mean the collapse of EU energy policy, he is reported to have replied that you can't make something that doesn't exist collapse. According to experts, the situation is as follows:
without Hungary's involvement, Nabucco would lose a lot of its economic attraction;
Gazprom has allegedly promised to make Hungary a crucial distribution centre for Russian gas in Europe, building storage, management and distribution infrastructure there;
the extension of Blue Stream is backed by firm political will and determination whereas Nabucco is still subject to reservations and doubts among the Turkish, Austrian, Bulgarian, Romanian and, of course, Hungarian companies that are supposed to be involved in funding it, and which are calling for guarantees of the real size of gas reserves in the Caspian Sea area and the plans of Iran which will be involved in the project in the future. The Hungarian company involved is MOL, the same one which has set up a joint venture with Gazprom. The Blue Stream gas pipeline is mainly fed by Siberian reserves controlled by Gazprom, fed en route by resources from the Caspian area. For Azerbaijan and Georgia, Nabucco is a more direct way of reaching the West, but Nabucco and Blue Stream will run side by side over much of Turkey.
Abandoning the Nabucco plan would meant that Russia would fully control gas supplies to the EU from countries in the former USSR through a network comprising (from North to South) the gas pipeline being built under the Baltic Sea, existing pipelines through Belarus and Ukraine, and extending the Blue Stream pipeline. What astonishes me is the fact that the European Parliament (which holds impassioned debate on other aspects of the energy situation in Europe, see below) gives the impression of ignoring this essential aspect. Couldn't Hungarian MEPs provide some information? Couldn't the energy commissioner be asked what is really going on with Nabucco?
Opening Brussels politicians' eyes. In Russia in the meantime, a new oil giant, Rosneft, is being consolidated which, thanks to the gradual buying up of Yukos' assets, now controls more oil reserves than any other company in the world. With the difference that Yukos was a private company whereas Rosneft is state controlled.
How can the full truth be brought to light here too? Lawyers for the former owner of Yukos (who is still in prison) challenge the fragmentation in the auctions in which the company's assets have been sold off, and some observers criticise the companies ENI (Italy) and E.ON (Germany) for collaborating with the sales, deducing a kind of triple alliance among Russia, Germany and Italy. It is true that the Russian participant at the Europe-Russia forum recently organised in Vienna, a Mr Simonov from Gazprom, welcomed the active presence of ENI at the above-mentioned auctions and the existing good cooperation among companies, adding that to consolidate energy cooperation between the EU and Russia, what needs to be done is to open Brussels politicians' eyes. In his view, Brussels politicians sometimes react hysterically. Here too, I would like questions to be asked and for debate to be held at the relevant European Parliament committees, where it looks as though discussion of highly controversial issues is being avoided.
Learning from EP debates. The European Parliament's industry, research and energy committee is debating the functioning of the common gas and electricity market, unbundling, the third package of directives being planned by the Commission on renewable energy, nuclear energy and the EU foreign energy policy. Reports are being prepared on the various aspects and we will obviously have to await their publication before discussing the European Parliament's views. But interesting hints are already appearing. I understand from analysis by Mr. A.Ferron for the ' Confrontations Europe' association that the rapporteur on the future gas and electricity common market, Alejo Vidal-Quadras, recognises that full unbundling of producers and distributors might be the ideal solution, but it cannot be applied to all countries without discerning. Moreover, a distinction must be made between gas and electricity, whose markets are radically different from each other. The positions of the various political groups differ, but both Herbert Reul (EPP) and Claude Turmes (Greens) agree on one thing - Russia should also apply unbundling for Gazprom, failing which an uneven playing field would arise.
The rapporteur on nuclear issues, Herbert Reul (EPP), is calling for a true debate. Aware that nuclear will exist no matter what, he says the best thing is discuss it. But some exchanges of views suggest that the debate will be far from simple, as has also been confirmed by extra documents supplied by the Greens (see yesterday's newsletter) and the debate in plenary on the revision of the Euratom Treaty (see following pages). A taster was provided in the above-mentioned committee by the exchange of views between Miloslav Ransdorf (in his view, the independence of Baltic States from Russia is represented by the nuclear power station being built in Lithuania) and Rebecca Harms, who said that mutual cooperation and understanding between the EU and Russia was vital. Fiona Hall raised the question of the 'oil curse', in other words the bad impact of the 'pennies from heaven' provided by oil, giving the example of Nigeria (an example I quoted myself at the end of my commentary in issue 9419). Debate also covered whether to include nuclear power plants in the 'critical infrastructure' subject to special monitoring (but Christian Ehler warned of the dangers of over-regulation).
I also commented on the speech by Vittorio Prodi that the WTO has its own logic, seeing free trade as an end in itself. In Prodi's view, the one-sidedness of the objective should be changed, with penalties introduced not only for violating trade rules but also for damaging the environment.
(F.R.)