The beginning of the end for the Russian gas hegemony in Europe

For the entire twentieth century, the possession of large energy resources (mainly oil), eventually took the form of a powerful political influence. The case of the 1973 oil crisis is illustrative in this respect, when the OPEC countries (mainly the Arab countries) literally left the United States and some other Western countries without fuel, because they have supported Israel during the “Yom Kippur” war. Arab monarchies have used the oil card in a big political game of world scale; it was the political aspect of the issue. The economic side of the issue has been a sharp rise in price of black gold on the market (from 3 to 12 dollars per barrel). The Arab oil-exporting countries then received a double benefit. 

Although it had been many years since then, the approaches of energy exporters have not significantly changed. Exporters are still trying to occupy most of the market and thus gain more profit and more political influence. And consumers naturally strive for greater diversification and enhancing the use of alternative energy sources. Ironically, the developed Western countries (Western Europe) have energy dependence on the country inferior to them in terms of development in almost all respects. Of course I am talking about Russia. Russian gas monopolist Gazprom, for years has been a convenient tool for pressure and blackmail in the hands of the Kremlin. Because of its gas dependence on Russia, the EU often cannot demonstrate a strong and consistent position on the issue of the Russian threat. 

However, it cannot be said that the EU and other countries accept the energy dependence.  They are almost constantly in search of alternative suppliers and energy transportation routes (of mainly gas). One of the options of diversification of gas supplies to Europe can be the "Southern Gas Corridor" project (that involves TAP and TANAP projects).   The commissioning of this project will enable Europe to reduce its energy dependence on Russia, and to get more competitive prices. Based on the rate of economic growth in Europe, it can be said that, in the foreseeable future we will not see the growth of natural gas consumption in Europe. This means that Gazprom will have to agree to discount, and accept the reduction of its market in Europe. Of course in the current situation, this scenario cannot satisfy Gazprom and its Kremlin masters.

It is worth noting that the implementation of the Southern Gas Corridor project will also reduce Turkey’s gas dependence on Russia.  Against the backdrop of the Cold War between Moscow and Ankara, the project takes on greater significance in the eyes of the Turkish political elite. In addition, the project will transform Turkey into an important energy hub that promises it a greater economic benefits and energy stability.

Some people in the ruling circles of Russia are cautiously watching the steps towards the implementation of this major project, which runs bypassing Russia. They believe that the Southern Gas Corridor, in the long term, can put an end to the hegemony of the Russian gas in Europe. Thus deprive Russia of a tool of pressure on Europe and quite solid financial revenues.  Part of the Russian elite is convinced that the weakest links in this chain are Georgia and Azerbaijan, so with enough pressure on these countries, they will be able to stop or significantly complicate the implementation of the project. 

Armenia’s total military and political dependence on Russia suggests that military aggravation between Armenia and Azerbaijan, which took place in April 1-5 of this year, may be the result of Russia’s activity in order to impede the project. 

This also can be attributed to sudden protests by environmentalists in southern Italy, who oppose the construction of the gas pipeline (TAP). 

One should not lose sight of the fact that in Europe itself there are also quite a few opponents of the Southern Gas Corridor project. These elements can be observed mainly in the eastern European countries that have become EU members. These forces, representing part of the elite of these countries, are primarily defending their narrow corporate goals and objectives. Most of them are directly or indirectly connected with the gas business in their country or with the Russian gas lobby in Europe. Although their arguments do not withstand criticism, however it does not take away their activity.

Some circles in Europe (possibly closely related to Moscow) declare that the implementation of the Southern Gas Corridor project will lead to the fact that Europe will fall into dependence on Turkey. This argument is actively promoted and is being discussed in society. Such speculations are advantageous for Russian gas lobby and the Russian authorities. 

I think the matter of Turkey's reliability and Europe's expected dependence on Turkey, if this country will become a gas hub, is worth considering in little more detail. 

Firstly, Turkey, in the case of its transformation into a gas hub, will act as a transit country; Turkey does not produce gas and only deals with transit. If Turkey wants to use these features as a political tool against Europe, then it will have problems with both the European gas consumer countries, and with Turkey’s eastern neighbor countries, which produce this gas. That is, Turkey runs the risk of suddenly ruining its relations both with Europe and with gas exporters, including its strategic ally Azerbaijan. Such a scenario sounds utopian to me.   

Secondly, after the launch of the project, it will compete with Russian gas, and it is not in the interest of Ankara to create problems in this regard, thus "doing a favor" for a competitor, in this case for Gazprom. 

Third, Turkey is a member of NATO and a candidate for EU membership with a democratically elected government. I find it inappropriate, in terms of reliability, to compare Turkey with the country, which invades the territory of neighboring states, partly occupying them, shoots down civilian airliners, blackmails its neighbors and grossly violates the norms of international law...  

It is not difficult to understand where these insinuations are coming from.  

However, the Russian gas monopoly in Europe is threatened not only by the project of the Southern Gas Corridor. 

The Russian elite have focused all its attention on countering the emergence of alternative pipelines in Europe, but they have overlooked another threat posed by a small Middle Eastern country, the Emirate of Qatar. Qatar is world's largest exporter of LNG, has the world's largest fleet for LNG transportation. 

Qatar has already started supplying LNG to Poland. Besides Qatar, the US as well supplies LNG to Europe.   Moreover, both countries intend to increase the supply of LNG. Given that the demand for natural gas in Europe is almost not growing, LNG supplies and commissioning of the Southern Gas Corridor, will hit the Russian gas business hard. As a result of these processes, the ability of the Russian authorities to use gas exports as a pressure tool will come to naught, besides Russian budget will receive less billions of dollars, which are so important for the country in the conditions of low oil prices. 

It is too early to talk about the final downfall of the Russian gas hegemony in Europe, but each year it becomes more and more real. 

Ali Hajizade, political scientist, head of the project "The Great Middle East"