The European Union is planning to use natural gas to satisfy its growing energy demands. Gas is a low-carbon fuel, compared to other fossil fuels, and burning gas instead of oil and coal complies with the Union's carbon reduction targets.
In the long run, though, most of the gas needs to be imported. Taking into account the known reserves (which are one-quarter of all known deposits) and existing pipeline infrastructure, the main supplier to many EU member states will continue to be Russia (and the heavily indebted Gazprom).
Russia and Gazprom need foreign investment to develop energy resources. Oligarchs have ruthlessly exploited oil fields without duly securing future investments and gas-fields are also being depleted. The current credit crunch does not allow Gazprom to exploit new fields without European partners, because the cost of developing a new field is about €145 billion. Such huge sums cannot be invested without securing buyers for the gas.
From the Finnish experience, Russia has been a reliable gas supplier. As a neighbouring country, we obtain gas without transiting through intermediary countries. Transiting through politically unstable countries creates a risk for the parties at both ends of the pipeline and that was the root of the latest crisis. In the European Parliament I have felt open hatred towards Russia on the part of some colleagues and that will to isolate Russia must also be taken into account in plann-ing pipelines. To minimise political risks, the EU needs both the North and South Stream pipelines, as well as Nabucco.
Liquefied natural gas technologies will soon be a competitive alternative to the gas pipeline infrastructure. It will enable Euro-pean countries to choose their suppliers, but inevitably many of the member states will trade with Russia. For these, it is imp-ortant to ensure that the transit is secured against vulnerability and disruption.
During the gas transit crisis in January, Russian gas reservoirs were full and it would have been capable of supplying gas to the west. The problem was political. The Russians, as suppliers, did not behave in a predictable manner, and they lost part of their credibility as a reliable supplier even if, as they claim, they were innocent in the crisis. They need to change their tone of argumentation and the behaviour of their public relations consultants if they want to get their sincere message across.
The European Commission's neutral position was well-grounded and allowed it to act as an intermediary between the disputing parties. It should continue to play this role in the future.
The EU should not be a gas pipeline entrepreneur and a first- or last-resort financier for such investments. Providing gas supplies must primarily be a task for energy companies and not for states. Companies would then charge gas consumers – and not taxpayers – for the investment costs needed to secure EU gas and energy supplies.
For emergency situations, member states should secure storage capacity to guarantee a minimum of 30 days' consumption and build better inter-connectors with neighbouring countries.
Finnish centre-left (GUE-NL) MEP Esko Seppänen is vice-chairman of the Parliament's delegation for co-operation with Russia.