UK Energy Supply: Security or Independence? - Energy and Climate Change Contents

Supplementary memorandum submitted by Katinka Barysch

What alternatives are there to Nabucco to address the energy security concerns of Central and Eastern Europe?

—  could these concerns be addressed by building more (and more flexible) interconnections between Western and Eastern Europe?

—  if so, would this be cheaper and less politically contentious than Nabucco?

In principle, the energy security of the CEE could be equally enhanced by linking them to the large Central European gas networks (Germany/Austria/Italy ) which would allow them to ship in gas coming from the Dutch fields, the North Sea, Russia via Nord Stream, the British LNG terminals as well as Northern Africa via Italy/Spain/France. As the 2009 gas crisis showed, there are some interconnectors already that allowed gas to flow from west to east in an emergency situation. But it was nowhere near enough.

The European Commission is currently pushing EU member-states to enhance both their infrastructure and their preparedness to emergency situations (through storage etc). Progress is slow and piecemeal and I am not sure it will be sufficient to considerably enhance CEE energy security.

The construction of new west-east pipelines might well be cheaper than building Nabucco. But the CEE gas markets are probably too small to make the construction of such a pipeline infrastructure viable (since they can so easily be supplied through existing pipelines through Ukraine). Nabucco would target not only the CEE but also the main European markets via Baumgarten so has completely different economics. But the main point about Nabucco is that it could give the EU access to a completely new source of gas which has much bigger benefits in terms of energy security (and geo-politics since we profess to take an interest in the stability of the Caspian and Central Asia) than any west-east pipeline.

July 2011

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Prepared 25 October 2011