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Dispatch: EU-Russian Energy Politics

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Analyst Eugene Chausovsky explains Russia's motives in calling for an energy dialogue with the European Union to discuss the Third Energy Package.
Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, STRATFOR cannot guarantee their complete accuracy.

Russian Energy Minister Sergei Shmatko said Nov. 15 that Russia and the EU will soon hold an energy dialogue to discuss the EU's Third Energy Package. Given all of the recent developments related to the EU's Third Energy Package, which seeks to unbundle the sales, production and transportation of energy in EU countries. This will be a crucial meeting to watch to gauge the implications for Europe's energy policy.

Russia has long wanted to boost its energy presence in Europe and Russia's plans to that effect have included building relationships with key European countries like Germany and Italy in the energy and economic sphere. This is something that Russia has been working on for many years as the recent debut of the Nord Stream natural gas pipeline to Germany shows. But the financial crisis in Europe has opened a larger window of opportunity for Russia.

Russia has been picking up energy assets in several Western European countries and going after their subsidiaries in Central Europe as well. But there is one major impediment to Russia's energy maneuverings in Europe — and that is the EU's Third Energy Package. While this directive is designed to promote competition and prevent the monopolization of energy industries in EU countries, this as a direct impact on Russia. That is because in several EU countries, and particularly the Baltic States, Russia is responsible for both the production and the transportation of natural gas. So its interests would directly be threatened by this directive.

There have already been several countries that have actively tried to enforce this directive on Russia, such as Lithuania, while other countries have started to implement the process legally, like Slovakia. Russia has seen the writing on the wall and has called for amendments to be made to this Third Energy Package, something that Russia hopes to address in this dialogue with the EU, which could happen in late November or early December.

By calling for a dialogue Russia is hoping that it can block or at least slow down this unbundling process and continue to boost its influence throughout the region. The upcoming dialogue between the EU and Russia will therefore be a key opportunity to gauge the energy politics of wider Europe.

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