roundtable.klar

Illustration: Karin Sunvisson.

Conference reports Energy issues are being dealt with by a variety of actors; governance and cooperation are lacking

The EU wants the Baltic region to have a common energy sector, something the region does not have today. Political governance is weak and the people making the investments have yet to prioritize regional cooperation. This is the view of Michael Bradshaw, professor of human geography at Leicester University, who opened the first Baltic Worlds Annual Round Table on November 24 at Södertörn University in Stockholm.

Published in the printed edition of Baltic Worlds Page 15, Vol 4: 2010
Published on balticworlds.com on januari 10, 2011

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The EU wants the Baltic region to have a common energy sector, something the region does not have today. Political governance is weak and the people making the investments have yet to prioritize regional cooperation.

This is the view of Michael Bradshaw, professor of human geography at Leicester University, who opened the first Baltic Worlds Annual Round Table on November 24 at Södertörn University in Stockholm. The general theme was “The Energy Sector in the Baltic Sea Region: Governance, Sustainability, and Knowledge”.

Bradshaw noted that the global energy sector is facing a number of challenges for the future: Consumers must have a secure energy supply and tariffs must not threaten economic growth, while carbon emissions must be reduced — if they are not, climate change will have an even worse impact on the economy in the long run.

Development of the energy sector, according to Bradshaw, is controlled by the value and priority policymakers assign to economic growth, reliable access to energy, and environmentally sustainable development. Prioritizations are determined by national economic development levels and energy supply.

The countries in the Baltic region differ from one another: some are post-socialist economies that consume a
great deal of energy; others are developed market economies that are more or less energy efficient. Some countries export energy, but most need to import it.

The Baltic region gives a picture, in miniature, of the global challenges of the energy sector, but the region has no common energy strategy outside of EU program declarations. There would be advantages to such cooperation, according to Bradshaw, and Russia should not be excluded.

The task is made more difficult by the fact that many governments in the region have only limited control over energy decisions in their countries. Within the EU’s deregulated energy sector, investments are made — and most priorities set — by corporations. For this reason, someone who wants to study the genesis of Nord Stream, for example, needs to study the companies behind the construction project rather than the states affected.

Tora Leifland  Holmström is a communications project manager at Nord Stream. Previously, she was involved in permit examination in preparation for the pipeline construction, and before that was a political expert for the Swedish Ministry of Agriculture. She reported that the Nord Stream pipeline will cost about 7.4 billion euros, has a planned lifetime of 50 years, and will have the capacity to supply 26 million households in Europe with energy, and with half the carbon emissions produced by consumption of oil and coal.

That the Baltic countries are not an integrated region was apparent during the permit processes. Companies had to comply with the national laws of five countries, EU laws, and international laws involving nine countries.

Russia is not really included in the region and there is some hesitation and sometimes opposition to Europe becoming dependent on Russian gas.

“But such a dependency becomes mutual. Nord Stream will be dependent on revenues from Europe and the Russian state on tax revenues from Gazprom”, said Leifland Holmström.

“Russia is on the Baltic coast, but is often not counted as part of the region politically”, said Nikolai Dobronravin, professor of international relations at Saint Petersburg State University. Dobronravin does not see the Baltic region as a cohesive region and nor could it become one — since Russia does not fit into the picture. But Russia plays a key role in the region, especially in the energy sector.

Dobronravin referred to European voices calling for the diversification of energy supplies to avoid too much dependence on energy imports from Russia. This could mean building of ports and pipelines for importing liquid natural gas and oil from countries other than Russia.

Meanwhile, Russia wants to continue exporting oil and gas, preferably to Europe. But the new gas and oil fields are getting further away from Europe and closer to China. If Europe wants to reduce its energy dependency on Russia, Russia may begin selling to China instead, leaving Europe without the gas in such demand.

“But the gas and oil transports through the Baltic are going to increase even if the energy is not consumed in Europe; this is a risk that demands joint action.”
Short-term, the Russian energy sector is prioritizing secure energy supply and economic growth, not environmental sustainability, according to Dobronravin. As yet, there is no serious discussion of long-term environmental objectives and Russia has no major renewable energy programs in the works like those in China.

Nuclear power is another component of the energy sector in the Baltic region. Susanne Oxenstierna, senior security policy researcher at FOI (the Swedish Defense Research Agency) has surveyed Russian nuclear power initiatives.

On the domestic front, primarily in the European parts of Russia, including Kaliningrad, the country plans to build new power plants and more than double nuclear power production by 2030. Rosatom, the state-owned nuclear power company, is engaged in building seven nuclear power plants and another seventeen are planned. In addition, Russia has thirty-two nuclear reactors in operation, eleven of the Chernobyl type. The reactors of this type closest to the Baltic Sea are in Saint Petersburg — these have been rebuilt to improve safety.

The point of the nuclear power expansion is to enable Russia to export gas instead of using it at home. Nuclear power is also considered an important aspect of the Russian push to modernize its economy. Russia is the world’s fourth nuclear power nation, has an extremely advanced nuclear research program, and is an exporter of nuclear power plants and nuclear fuel — about one fifth of Europe’s nuclear fuel is purchased from Russia and milled and enriched there as well. However, safety is considered a weak spot in Russian nuclear power.

Per Högström, senior administrative officer of the Energy Division at the Swedish Ministry of Enterprise, Energy, and Communications, talked about cooperation among Baltic governments in the energy sector. In that context, he discussed the Baltic Energy Market Interconnection Plan (BEMIP). BEMIP is part of the EU strategy for the Baltic Sea region, the objective of which is to integrate the electricity and gas markets of Estonia, Latvia, and Lithuania with markets in the Nordic countries in order to reduce the Baltic countries’ dependency on Russia. Actions include completion of the NordBalt submarine power cable between Lithuania and Sweden by 2016.
Högström agrees that energy market development is largely under corporate control.

“If we want a deregulated energy market in the EU, then the investments have to be made by market players, on market terms. But the state also plays a role, by initiating projects and issuing permits.” ≈