EU considers emergency measures as gas crisis intensifies
PHILIPPA RUNNER
06.01.2009 @ 17:40 CET
EUOBSERVER / BRUSSELS - Restarting old nuclear reactors, sharing gas stocks and calling an EU-Russia-Ukraine summit have emerged as potential EU reactions to the gas crisis, as severe supply cuts hit EU consumers and industry.
Twelve thousand homes in Varna, Bulgaria were left without central heating as snow fell on Tuesday (6 January), with Bulgarian fertiliser producers Neochim and Agropolychim forced to halt production after Russian gas to the country stopped flowing through Ukraine in the small hours.
A Naftogaz plant - Ukraine and Russia's reputations have suffered (Photo: naftogaz.com)
Gas supplies to Greece, Austria, Romania, Slovenia, the Czech Republic and Slovakia fell by 70 percent to 100 percent, with Slovakia - which imports all of its gas from Russia - expected to declare a state of emergency at midnight.
France, Germany, Italy, Poland and Hungary also suffered serious disruptions. Poland reduced gas deliveries to industrial plants and Germany's energy champion - E.ON Ruhrgas - warned the company's "possibilities [of functioning normally] will reach their limits" if the problem drags out.
Ukraine-Russia negotiations on fixing 2009 gas prices and resuming normal supply are to restart in Moscow on Thursday. But Ukraine President Viktor Yushchenko warned the EU that things might get worse before they get better.
"The Russian side intends to either significantly reduce or stop altogether transits of Russian natural gas [to Europe]," his office said in a statement on Tuesday afternoon.
The European Commission and the Czech EU presidency do not know how the situation will unfold, despite top-level telephone contact between the European Commission president, the Czech prime minister, the Bulgarian prime minister and Russian and Ukrainian leaders.
"Nobody knows exactly what is at stake or what the conflict is really about," a Czech diplomat told EUobserver. "This reflects very badly on their [Russia and Ukraine] reputations."
Czech Prime Minister Mirek Topolanek said he may call a snap EU-Russia-Ukraine summit as an extreme measure if the situation does not swiftly improve.
Meanwhile, EU member state energy experts are to meet in a "Gas Co-ordination Group" in Brussels on Friday to discuss possible solidarity measures for the worst-hit EU states.
"There are reserves in different member states that could be used, there could be gas that could be transported, there could be a switch to different types of fuels," European Commission spokesman Ferran Tarradellas Espuny said.
Bulgarian President Georgi Parvanov floated the idea of restarting one of two decommissioned reactors at the Kozloduy nuclear plant in line with Article 36 of the country's accession treaty on energy security.
Wider ripples
Lithuania is also eyeing the gas crunch with a view to prolonging the life of Reactor II at its Ignalina nuclear plant or speeding up a €1.5 billion EU grant to build energy bridges to Sweden and Poland.
The Baltic states receive Russian gas via Belarus instead of Ukraine. But a similar dispute in 2007 saw disruptions to Russian gas transit via Belarus, with 70 percent of Lithuania's economy to run on Russian gas after Ignalina II shuts down in December.
In the longer term, the Czech EU presidency plans to push for the installation of new counting stations on the Russia-Ukraine and Ukraine-EU borders to increase transparency on gas flows.
The EU may also propose running Russia-Ukraine gas transit via a new consortium that includes EU oversight, or negotiating a legally-binding transit treaty with its neighbours.
Middle man
Russia-Ukraine transit is currently handled by the Swiss-registered firm RosUkrEnergo, which is reportedly co-owned by Russia's Gazprom and Ukraine oligarch Dmitry Firtash.
The company buys gas from Gazprom and sells it to Ukraine's Naftogaz. But details of contracts and profits are secret, with some analysts suspecting the firm of being the main troublemaker in Russia-Ukraine energy relations.
"It has been alleged that the company doesn't do much for its healthy remuneration and has plenty of money to buy political influence," the European Council on Foreign Relations' Andrew Wilson told this website.
