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Saturday, May 16, 2009

Energy summits and falls, April, 2009

Today:
  1. EU nears energy liberalisation finishing line
  2. Russia unveils new global energy treaty blueprint
  3. Russia seeks EU backing for gas pipeline
  4. Azerbaijan and Russia edge closer to gas deal
  5. Obama backs Turkey's strategic energy role
Quote of the day:"I don't get it when USA will stop discussion Turkey's eventual membership. Mind your own business, people."

And I will use the time to express my utter disappointment about Eurovision. I know it's stupid, but our song wasn't bad. I liked it actually. And it's sad to see all the bad publicity we got. I know we have a lot of guilt about it, since our idiots so-called stars did't stop wining about how unfair and corrupted was the competition back home, but the truth is that they are idiots. This was the best song available, like it or not. Anyway the Czhech singer made my day. Dude!

EU nears energy liberalisation finishing line

23 April 2009

The European Parliament yesterday (22 April) endorsed an agreement struck by the EU institutions to curtail the power of energy giants and move closer to a truly internal gas and electricity market. However, critics said the measures did not go far enough in breaking up energy monopolies.

The Strasbourg plenary vote put an end to year-long squabbles over the third package of legislation to liberalise EU energy markets. The text will now be transmitted for adoption by the EU Council of Ministers representing the 27-member bloc, formally putting an end to the process.

The new legislation consists of two directives on rules for the internal electricity and gas markets, two regulations on conditions for access to those markets and one establishing an 'Agency for the Cooperation of Energy Regulators'.

The Parliament and governments clashed on a number of issues, including the separation of vertically integrated power companies' production and transmission assets, consumer rights and the power of independent transmission operators.

Working under pressure to push through the legislation - deemed crucial to the EU's energy security - before the elections, the Parliament dropped a demand that full 'ownership unbundling' had to be the only option for the electricity market.

Instead, MEPs signed up to a deal which also allows companies to opt for two alternative models which let them retain ownership of their gas and electricity grids. This is, however, on the condition that they either hand over the operation of their transmission networks to an independent system operator (ISO), or adhere to rules which guarantee that the two sectors can operate independently. Such rules include the establishment of a supervisory body and the provision of "cooling-off periods" for employees before moving from transmission to generation.

MEPs voting against the new legislation said it was neither strong enough to contain energy giants' power, nor to provide for genuine competition.

At a time when German cartel authorities are starting to investigate market-price manipulation by the four big domestic energy utilities, and France's EDF is answering charges of spying on Greenpeace activists, Green MEPs Claude Turmes (Luxembourg) and Rebecca Harms (Germany) argued that the outcome of the legislation was testament to the fact that "energy oligopolies still have most EU governments and energy ministers in their pockets".

Nevertheless, the agreement endorsed yesterday takes consumers' concerns into consideration, largely due to heavy haggling by the Parliament. As a trade-off for the compromise on ownership bundling, Parliament obtained recognition of the concept of energy poverty, obliging member states to offer measures such as social security benefits to provide vital energy supplies to poorer customers, and requiring governments to guarantee universal access to electricity for all households.

Moreover, the new legislation gives consumers the right to change their gas and electricity suppliers within three weeks and without charges. They are also promised access to all relevant gas and electricity consumption data, allowing them to control their energy bills.

Member states are now expected to endorse the agreement some time in the summer. source

My comment: Haha! On the last sentences I mean. So we can change our suppliers within 3 weeks, huh? I wonder with which one after we have only one supplier per geographical region. But then, the intention is what matters. As for liberalisation, I don't know why they started the whole issue, if they never intended to finish it. It's odd. It's not like someone from outside tell them you must unbundle, that European initiative. Then either do it or leave it!

Russia unveils new global energy treaty blueprint

22 April 2009

The Kremlin yesterday (21 April) published Russia's proposal for new rules on international energy cooperation, following a dispute with Ukraine over transit in January which left millions of Europeans without heating in the heart of winter.

Arkady Dvorkovich, Medvedev's top economic aide, said Moscow was proposing a document that would "essentially replace the Energy Charter," but was flexible on its legal format.

"We are offering a new fully-fledged legal base for future energy cooperation," Dvorkovich said in a briefing with Russian reporters, quoted by AFP, adding that the new document should also cover nuclear energy in addition to conventional energy.

The draft treaty refers heavily to the January gas dispute with Ukraine, apparently seeking to build on the crisis to promote the idea that a new legal basis is needed to govern international energy relations.

"The existing bilateral arrangements and multilateral, legally-binding norms governing international energy relations have failed to prevent and resolve conflict situations, which makes it necessary to efficiently improve the legal framework of the world trade in energy resources," reads the document, entitled 'Conceptual Approach to the New Legal Framework for Energy Cooperation (Goals and Principles)'.

Indeed, a substantial part of the four-page document is dedicated to transit. The blueprint seeks to introduce the principles of establishing transit tariffs and obliging all parties to ensure the proper fulfilment of transit requirements by their entities.

It introduces the principle of unacceptability of transit interruptions or reductions, promotes responsibility of the parties for losses incurred, and proposes establishing specific bodies to address emergency situations.

Moscow is also pushing for a global system in which the sovereignty of energy-rich nations would be recognised as "unconditional". At the same time, Russia would be free to access international energy markets, and no restrictions should exist for investments in energy-chain links.

In a spirit familiar from recent speeches by Russian leaders , Moscow said it was seeking to promote mutual exchange of energy businesses' assets, and promote non-discriminatory access to Western technologies.

Significantly, the blueprint proposes the "promotion of infrastructure projects of great importance for global and regional energy security". It has become clear from recent statements that Russia wants EU support for its own projects, such as the South Stream gas pipeline.source

My comment: I don't quite get what's the point of this blueprint. They cannot honestly expect that they will have the power to do whatever they like and the rest have the right to oblige. I'm usually on their side, but now, it doesn't make much sense. And what's more, I didn't notice the article to mention remunerations in case of stopping of the oil/gas. Because in the case of Bulgaria, the problem is that we have noone to ask compensantion from, because the contracts simply don't consider a situation as the one with Ukraine. So, if we're talking about a fair deal here, both sides must have both rights and responsibilities and I don't see the responsibility of Russia in this blueprint.

Russia seeks EU backing for gas pipeline

21 April 2009

An energy summit to be held in the Bulgarian capital on 24-25 April is expected to boost the South Stream gas pipeline project favoured by Russian state monopoly Gazprom, the Bulgarian press reports.

A few days ahead of the Sofia Energy Forum, uncertainty reigns as to the level of participation, the daily Standart writes today (21 April).

Russia is trying to introduce language into the final declaration of the Sofia energy summit pushing for the Gazprom-favoured 'South Stream' gas pipeline project to be declared an EU priority, reported the daily Dnevnik, EurActiv's partner in Bulgaria.

The European Commission does not agree with such wording, and prefers a more general commitment to diversification of energy sources and corridors, the daily adds.

A statement by Gazprom's CEO to the Russian press confirmed Moscow's ambitions.

The Gazprom-favoured South Stream project is expected to receive a boost at the Sofia summit, according to Banker, a Bulgarian weekly. The newspaper learned that a political declaration in support of the pipeline was being prepared and should be ready for signature by all the countries taking part in the project (Russia, Italy, Bulgaria, Greece, Serbia, Hungary and Austria).

The political declaration can perhaps be considered symbolic, however, as other practical issues remain outstanding, such as the new contracts with Gazprom and its Bulgarian counterpart Bulgargaz, Banker writes. However, these issues too are highly likely to be resolved during the mandate of the present government, the weekly further elaborates. The cabinet's mandate ends in July this year.

In official statements, the Bulgarian authorities are careful to position the EU's favoured Nabucco project as a priority too, making it appear to be at the same level as South Stream, which is seen as a rival to Nabucco.

Other items on the summit's agenda include shaping "a new European energy policy" and seeking "new international arrangements […] for energy security".

As a consequence, Russia is expected to unveil details of its proposals for establishing a new legal framework between the EU and Russia in energy matters. source

My comment: And what was the result from this conference-precisely none! Well, if you don't count the whole capital being blocked because of the security of dear European officials. Not only that, but Bulgaria and Russia had a major quarrel over Gazprom and Bulgargas, that was resolved few days later, where our prime-minister visited Moscow. But nor Europe, neither Bulgaria won anything from this conference, except for few jokes from mr. Putin, who decided we're not worthy his presence. I must say that I think Russia has to change a little bit their attitude when dealing with Europe. It's obvious they are on the top, but when you press a dog too much, it can bite you. And Europe is not exactly teethless, no matter what some might think. And in the end, bussiness should be done with mutual respect and in a way that both sides will benefit maximally. Otherwise, there are bad side effects which nobody wants.

Azerbaijan and Russia edge closer to gas deal

20 April 2009

Europe's hopes of securing natural gas from Azerbaijan via the Nabucco pipeline were further dampened on Saturday (18 April) when Azerbaijan's President Ilham Aliev said he wanted Russia to serve as a transit route for selling gas to Europe.

During a visit to Moscow, the president of Azerbaijan Ilham Aliev also confirmed his country's interest in selling gas directly to Gazprom.

The meeting between President Aliyev and his Russian counterpart Dmitry Medvedev was expected to improve the chances of a gas deal under which Azerbaijan would sell 16 billion cubic metres of gas annually to Gazprom from its Shakh Deniz gas field.

Baku, which currently exports gas to Georgia and Turkey, says it is looking to new markets – including Russia – and the Azeri president expressed enthusiasm for a deal with Moscow.

"There are no transit countries between us, and this means that quite an effective transport infrastructure is already in place. There is no need for additional investment in building a gas pipeline. All the conditions therefore look very advantageous," said Aliev at the joint press conference, quoted by the Kremlin website.

His Russian host also expressed optimism that a deal could be hammered out soon.

The talks appeared to strike another blow to the EU-favoured Nabucco pipeline project, which aims to decrease the Union's dependence on Russian gas.

Anticipating wary EU reactions, the Russian press gloated that Brussels had better not complain. "The European Union would likely welcome the emergence of a new supplier from the East, albeit one dependent on Russian pipelines, especially since the completion of Nabucco remains in doubt," the Moscow Times wrote today.

At the same time, analysts said the US had started shifting from the policies of previous administrations, which focused on promoting alternative energy corridors Europe, in order to improve its relations with Moscow.

Alexander Rar, director of Russia and CIS Programmes for the Foreign Policy Council of Germany, a think-tank, said "Americans offered to unite 'South Stream', Nabucco and other pipes into a general project under the code name 'Southern Corridor' in order not to create geopolitical contradiction at the moment when we need Russia to solve Iranian problem and other matters". source

My comment: Well, this shouldn't surprise anyone. After all, this is what competition is supposed to mean. And obviously there is enough politics involved.

Obama backs Turkey's strategic energy role

7 April 2009

Speaking before the Turkish parliament yesterday (6 April), US President Barack Obama said America would continue to support Turkey's central role as an East-West oil and gas corridor, and highlighted new economic opportunities offered by clean energies.

Energy offers the United States and Turkey opportunities to "expand markets and create jobs," Obama told the Turkish Grand National Assembly in Ankara during his first visit to Turkey as US president.

Obama told members of parliament that he would "continue to support [Turkey's] central role as an East-West corridor for oil and natural gas," extending a long-standing policy of the White House in supporting Turkey's role as a transit country for oil and gas.

The EU's projected Nabucco gas pipeline, which would see Turkey become a major transit route for Caspian gas to Europe, has long been supported by Washington, although Obama did not specifically mention the project.

The US president instead preferred to turn to the future, promoting renewable energies as a way to combat climate change.

Wider economic cooperation between Turkey, the US and Europe is also crucial for security reasons, Obama stressed, reiterating America's support for Turkey's EU accession bid. "Let me be clear, the United States strongly supports Turkey's bid to become a member of the European Union," the president said amid applause. source

My comment: I don't get it when USA will stop discussion Turkey's eventual membership. Mind your own business, people. Turkey is our own problem. It's not exactly a surprise that European leader acted as bitten about Turkey. In any case, Turkey isn't ready to be a member. And it's not exactly acting as a friend of Europe if we consider the latest Nabucco round of blackmailing. And lol, about the renewable sources in Turkey. Is he serious?

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