[ccebook.cn]The World in 2010

Europe
New twists in an old saga
Nov 13th 2009
Europe struggles to free itself from dependence on Russian energy
Russian gas had a bad year in 2009. Its share of the European market shrank: with demand weak, customers were
able to switch to cheaper suppliers. But the Kremlin will once again be on the front foot in 2010. Its top priority will
be to get work started on the Nord Stream pipeline, which will link Russia to Germany along the Baltic seabed,
bypassing troublesome transit countries such as Ukraine and Poland. Russia’s debt-ridden gas giant, Gazprom, lacks
the money to build this, so it needs help from the European Union and Germany.
Russia’s heavy-handed energy diplomacy is often counterproductive. But it is lobbying hard for Nord Stream and will
probably be successful. In 2010 it will increase pressure on Sweden and Finland, both of which have raised
environmental concerns. It will also call on support from its most powerful European ally, Germany.
Germany’s re-elected chancellor, the canny Angela Merkel, privately dislikes the project. But she knows she cannot
block it outright: Germany’s energy-thirsty industry is desperate to have a reliable supply of gas from the east.
Instead, she will push for a compromise. Germany will get Nord Stream built—if necessary with money from the
European Union. But it will also push hard for work to start on another pipeline, Nabucco. This would connect the gasrich
Caspian region with central Europe, via Turkey and the Balkans. Russia’s alternative pipeline across the Black Sea,
South Stream, will get nowhere. It is too expensive.
Tying up the loose ends on Nabucco will be the main energy story in southern Europe in 2010. Turkey needs to be
brought fully on board. That will mean its agreeing to take some Russian gas from Blue Stream, the under-used
pipeline across the Black Sea. Putting Russian gas in Nabucco dilutes its importance as a counterweight to Russia’s
monopoly on east-west gas supplies. But it is better than nothing. It will allow gas from Kurdistan (in Iraq), Azerbaijan
and other sources to reach Europe directly, for the first time. The EU is determined to get Nabucco built, even if the
deal behind it is imperfect.
Russia has another pipeline to play with: OPAL. This would connect Nord Stream to the
centre of Germany. In 2010 it will be clear that the Czech government has signed up to this
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The weakest link
in the West will