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EU: gas supply legislation

The other day the European parliament approved the bill on gas supplies in the EU countries foreseeing the creation of the common European system of mutual "gas assistance". The latter is planned to be employed in case of emergencies declared following complaints by two EU states about short deliveries of natural gas. If countries are in a complicated situation they are supposed to have access to gas reserves of neighboring states. The process will be coordinated by the European Commission. It is planned to oblige suppliers to have fuel reserves sufficient to ensure uninterrupted deliveries for 30 days even in crisis situations. Owners of gas pipelines are to provide for the possibility of reverse pumping, i.e. using pipes in both directions.

As it often happens to other aspects of acquis communautaire and the EU legislation in general, harmonization of provisions of the new common European regulations with natural legislation will take substantial time and there is every chance that they may be transformed. In the process of adjusting acquis communautaire national governments often make their best to secure exceptions from the general European norms for their specific cases. For instance, the Third Energy Package can be implemented in different variants at the national legislation level of separate states and only its most rigorous interpretation requires obligatory buyout of transit capacities from companies engaged also in gas production and processing. As a result, in Germany Gazprom has every chance to get an opportunity to use gas pipelines adjacent to Nord Stream as it thinks best and not to allow competitors the pipe.

In any case, the malicious joy (or panic, on the contrary) on these issues typical of many western and Russian experts is absolutely unnecessary. Liberalization of the European gas market can well be turned to Gazprom's advantage. Russia should be concerned about competition against third parties only if such competitors pose a serious threat as alternative suppliers. However, there are substantiated doubts that shale gas and LNG suppliers will really manage to replace a considerable share of Gazprom's gas exports at prices more beneficial for European consumers in the next 10 to 15 years.

This is why one should consider liberalization of the EU market first of all as an opportunity, not a risk. However, this approach stipulates desirability of not only closer economic but also closer political and even institutional cooperation of Russia and the EU (this has already been suggested by some prominent experts) with increase in the level of trust of the sides in each other. The progress in the latter case has not been quite evident over the past few years and the situation definitely needs to be improved.

By Stanistav Mitrakhovich, NESF leading expert
 


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Analytical series “The Fuel and Energy Complex of Russia”:

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