Curbing Russian Gas Dependence: EU Targets Energy Contracts

Written by | Thursday, February 11th, 2016

The European Union yesterday (10 February) unveiled plans to strengthen its position in examining energy contracts of EU Member States with third countries outside the block. The plan obviously focuses on curbing the EU’s energy dependence on Russia as Brussels struggles to use its legal means to secure energy supplies for 28 EU countries. The block moreover wants to be able to review all contracts in advance to decide whether they comply with its rules. Currently, the Commission can only review energy deals after they are signed. Brussels also wants access to information on commercial deals signed between Member States and energy firms in case the company has 40 percent or more market share in the given country.

EU Energy Commissioner Miguel Arias Canete said in his Monday speech that the aim of the proposal “is simple: to prevent and mitigate possible security of gas supply crises.” He added that the plans would “improve transparency” and allow the block to “assess the security of supply situation” for energy. The EU is already looking into the alleged unfair prices imposed by the Russian energy giant Gazprom, which are against the EU’s fair-trading rules. The latest plan is therefore generally seen as a way of preventing Gazprom from getting too much market share and as such it has already further fueled tensions between Brussels and Moscow.

The Commission, however, argues that the plan would also apply to major producers in Norway or Algeria albeit it is clear that Gazprom would be affected. The Russian state-run giant had been already previously accused of hindering competition in Central and Eastern Europe, where it has a dominant position. In 2014, EU Member States imported more than half of their energy needs from outside the block with Russian supplies covering about a third of that demand.

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