What is the Future of the Nabucco pipeline?
Radu Alexandru CUCUTĂ
June 7, 2010
Katinka Barysch's CER analysis on the future of the Nabucco project outlines both the advantages and the problems the project encounters. The author establishes that the political value of the project is nevertheless one of utmost importance. The "flagship" of the EU's approach towards energy security issues might serve not only to advance the EU's interests in this particular field, by reducing many of the member states' dependence on Russian energy imports, but also as a means of developing tighter relations with the EU's Eastern Neighbors and as a mean of enhancing the cooperation with Turkey (a powerful incentive now that the EU accession negotiations seem to be mired in a bureaucratic and political quagmire). Another benefit would be the enhancement of infrastructural interconnection between the Eastern members of the Union that the project would ensure (a situation that may render the most energy-dependent countries less vulnerable to the fallout of future Russian-Ukrainian rows).
The author concedes that although the project seems to be closer to completion in 2010 than it was a year ago, the economic rationale for the development of the project seems to be less pressing, due to the present economic conditions. At present, Barysch concurs that the recession has lead to a lesser demand of gas on the European market and that, due to the US' increased reliance on shale gas, an increased quantity of LNG is available to European consumers. Moreover, the deciding factor concerning the Nabucco project hasn't yet been solved -Azerbaijan, Turkmenistan, Iraq or Iran aren't able or are in the position to become the gas suppliers of the pipeline. The long-term political implications of this situation are also negative - reactions to Nabucco's continued procrastination and the eventual completion of its main competitor, Russian backed South Stream will once more reignite the debate about the effectiveness of the EU's foreign policy initiatives (and in particular it's stand on energy supply security) and on the economic merits and feasibility of the Nabucco project itself.
Barysch also highlights several contradictions of the EU stand on the matter. Whereas she concludes that a firmer support of the "big" European players (France, Germany, Italy) might be beneficial for the future of the Nabucco project, Barysch also outlines the fact that the ambiguity of the enterprise (private actors investing in the pipeline with the timid financial and political support of the EU) might prove concerning. In addition to that, the report emphasizes the fact that none of the four possible suppliers of the pipeline (Azerbaijan, Turkmenistan, Iraq and Iran) have the capacity to become parts of the project in the near future. The pipeline may be built long before gas may flow through it.
Barysch makes a case for the continuation of the project not necessarily because of its immediate effect on European gas consumption and supply or foreign EU policy, but because of its future potential. The project may prove a credible argument that can back the EU's Eastern foreign initiatives and may prove an incentive in its seemingly blocked relation with Turkey, in addition to its direct economic impact. While South Stream may not be the tough competitor of Nabucco some observers point to (because of the high costs of the enterprise, Russia's lack of gas resources and the engineering problems this massive undertaking poses), the fact is that the Nabucco project hasn't advanced past the same difficulties it encountered two or three years ago.
There are no foreseeable suppliers of the pipeline. The same old problems affect EU's relations with all the four targeted supply countries (and the biggest problem is that in most cases, although a positive ending might seem predictable, the stakes at play are larger than the Nabucco project itself - Iran's nuclear stance doesn't depend, for example on the success of the project, inasmuch as Iraq's internal divides are not really affected by an additional source of revenue the Iraqi communities may have to divide). Nabucco's success depends on the positive solving of several problems it is incapable of influencing.
Secondly, it is very difficult to portray the initiative as an endeavour neutral to Russian interests. As long as energy supply security depends on limiting the member states' overreliance on Russian gas exports and as long as a political and economic debate over the merits of Nabucco and Southstream is still at the foremost of the international agenda, there are very few chances of falling back on the purely technical and economic arguments. After the EU has decided to securitize the field of energy, there are very few alternatives of recanting this position.
Last, but not least, it is highly problematic to consider that the eventual success of the Nabucco project might lead to the appearance of a more coherent policy of the EU towards Russia. The project itself is only one of the debated aspects of EU policy concerning relations with Russia. It is not the cause, rather an effect of the divisive national policy interests of the member states. Consequently, only a change of those particular interests (a change in the way EU members perceive their interests towards Russia and in the way they value the EU foreign policy).
