Energy conference told: "We cannot leave the Baltic States vulnerable"

  • 2007-10-11
  • By Mike Collier

LEADING THE ATTACK: Bryza set the tone with a strong attack on Gazprom

VILNIUS -- The first day of the Vilnius Energy conference got under way Oct. 10 with U.S. and British speakers voicing strong criticism of Gazprom's energy policy in the Baltic States.

After a welcome speech from Lithuanian prime minister Gediminas Kirkilas in which he stressed that the conference should be viewed as part two of the conference that took place in Krakow earlier this year, the conference started in earnest with an address from U.S. State Department spokesman Matthew Bryza. Bryza wasted no time in pointing an accusing finger at Russian energy company Gazprom, laying the blame for much of the energy insecurity fear stalking Europe at Gazprom's door.

"Gazprom privides about 25  percent of total European gas supplies," Bryzka said, before outlining the alternatives to reliance on the Russian supplier which centre on development of gas fields in Azerbaijan and Turkmenistan.

Central to Bryzka's future vision are two new pipeline projects, one taking a Turkey-Greece-Italy route, the other [the so-called 'Nabucco' project] taking a Turkey-Austria-Bulgaria-Romania-Hungary route.

Bryzka argued that developing these routes was not necessarily an attempt to freeze Gazprom out of the market, but would provide a viable alternative supply and thus ensure that Gazprom would have to participate in the market as a commercial company rather than a political tool.

"It is a reality. That pipeline is happening. It will be possible to deliver gas from Azerbaijan all the way to Greece. We are convinced that Azerbaijan alone has sufficient reerves to fill the Turkey-Greece-Italy pipeline and provide the first phase of Nabucco pipeline." He desribed Gazprom claims to the contrary as "absolutely untrue" and "disinformation."

"Later phases will require more gas," he added, suggesting that supplies could eventually come from Iraq as well as other sources to create "A ring of infrastructure around the Black Sea as an alternative to Russian supplies."

With regard to the Baltic states in particular, Bryza urged the region to look to Norway as a possible short-term supplier and to retain ownership of strategic assets instead of selling them to Russia as a precondition for gas supplies.

"There has to be competition or forever a monopolist will act like a monopolist," he concluded.

Bryza's compatriot Bruce Jackson then took up the baton and used it to continue beating Gazprom. Linking energy security directly to democracy, he said: "If we found that Belarus and Burma were insecure in their energy supplies we wouldn't be having this meeting. Russia threatened the energy security of Ukraine not just at the time of the [recent] election but because of the outcome of the election."

"The Russian energy sector is a creation of the state. A predatory energy supplier can manipulate energy risk by threatening to cut off supply," Jackson asserted, before warning that Russia was in effect attempting to create a series of "semi-captive" economies in Eastern Europe and calling on the U.S. and EU to look at a "massive increase in foreign aid, perhaps in a joint initiative."

If Bryza and Jackson offered a straightforward challenge to Russian dominance, British academic Alan Riley opted for a more lighthearted but in some ways even more damning indictment of Russian policy.

In a presentation that included a picture of a muscle-bound Vladimir Putin in a 'wife beater' T-shirt that he described as "the president of Russia crossed with Marlon Brando in On The Waterfront," and which drew giggles from the assembled dignitaries, Riley drew attention to Gazprom's "reputation for having shadowy daughter companies."

"If the Russians are going to be short of gas, the first places they will cut supply will be Georgia and the Baltic states," he said.

"We cannot leave the Baltic States and Lithuanian in particular in such a vulnerable state. The EU needs to realise this."

His suggested solution can be summed up in one word: reciprocity. It may sound like another piece of vague euro-speak but it boils down to a simple enough concept. If the Russian government does not stop its monopolistic practices and allow foreign investors to buy into Russian companies, the EU will do likewise and would not only prevent Russian companies buying new European assets but would even force it to sell existing assets.



So it seems it's not only gas prices that can be raised 's the stakes can, too.