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EU Energy Policy documents, European Commission Proposals/reports, European Energy Policy, European Studies Centre, NAtural Gas developments, SEESOX, St.Antony's College

The EU’s external energy policy towards gas suppliers in the neighbourhood. The cases of Azerbaijan and Algeria.

 

 Berndt Weber (Department of Politics and International Relations, Oxford / CERI-SciencesPo) gave a presentation on the 5th of February, the above topic in the context of the Visiting Fellows Series and I chaired the session. Below it the summary of Berndt’s presentation as prepared by him. There was a very interesting debate that followed. 

An effective external energy policy towards the two most relevant gas producers in the neighbourhood besides Russia, Azerbaijan in the East and Algeria in the South, has become increasingly important for EU energy security. Natural gas will be the key source in Europe’s energy mix in the mid-term, however, mature gas fields within Europe are depleting. This shifts the focus to geographically close gas supplies in the neighbourhood, which seem particularly lucrative. At the same time, gas conflicts between the major transit country Ukraine and the major supplier Russia have repeatedly led to supply shortfalls in the EU and  increased the relevance of Azerbaijan and Algeria as alternative suppliers in the ‘near abroad’.

Through its main approach of ‘external energy governance’, the EU seeks to transfer EU-centered rules, policies and projects to both countries, in order to integrate them in a liberalized, pan-European energy market. However, factors conducive to the effectiveness of this approach are widely absent from energy relations with both suppliers. Firstly, the EU does not hold a superior bargaining power vis-à-vis them and finds itself at the receiving end of the interdependence equation. Secondly, both countries rejected highly binding and precise EU frames with regard to promoted rules and projects. Thirdly, EU policies do not resonate to a large extent with the normative context in both countries. Thus, the question arises, whether and how the EU can tie both suppliers to rules and projects in the energy sector that reflect European interests, institutions, and ideas, while it cannot offer strong incentives?

Two points are important to answer this question: (1) Actors’ preferences with regard to rules and projects in the energy sector are less driven by the EU than by market-based and geopolitical constraints; (2) The more ‘decentred’ the EU external energy policy towards both countries, the more effective it can be in terms of convergence.

The highest degree of effectiveness in terms of selection of liberal EU rules and commitment to the EU-flagship pipeline Nabucco, was achieved from 2006 to 2010 with Azerbaijan. Indeed, Baku was ready to subscribe to them, in order to counterbalance increasing Russian geopolitical and economic threats, by increasing its interdependence with the EU. However, once the Azerbaijani alternatives multiplied and its perceived bargaining power vis-à-vis the EU increased, it put the adoption process and further commitment to agreed rules and projects on hold and rejected them later on. Algerian resistance to EU external energy policy can be explained, firstly, by favourable market conditions for the supplier, and secondly, by the lack of perceived legitimacy with regard to the EU, imposing its rules and projects in a way that echoed the colonial past and negative experience with liberalisation in the early 2000s.

More effective were more ‘decentred’ approaches of EU external energy policy, providing for more participation, ownership and equality, since they did not stop short of adoption and were not rejected in the light of volatile geopolitics and markets. In the early 2000s, the EU initiated governance networks with Azerbaijani actors, which led to the adoption of jointly developed rules. Furthermore, external energy policy became more effective with regard to the Southern Gas Corridor, as the Commission dropped its clear preference for Nabucco and enabled Azerbaijan and supplier companies to co-develop the corridor together with the EU. It was not before the market situation deteriorated and the ‘Arab Spring’ destabilised its neighbourhood, that Algeria opened up to a more decentred EU external energy policy. As with Azerbaijan in 2011, the EU singled Algeria out, by assigning it the status of a strategic energy partner in 2013 and thereby prepared the ground for more co-development.

About Androulla Kaminara

SCR member of St.Antony's College, Oxford University, 2013-24 Academic Visitor and 2012-13 EU Fellow Senior Academic Associate- Non-resident of EUCERS, King's College, London University Views are personal.

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