Energy is of a vital importance in our lives and is probably one of the most important players in economic growth. Until 1970, energy was cheap and easy to obtain.
After the oil crisis in 1973, this situation has gradually changed and most countries have begun facing energy problems. Energy security has become the main issue of foreign policy all over the world. Nowadays there are no easy-to-exploit oilfields. Therefore, very deep waters and unconventional geographies are the new frontiers for oil and gas companies. At the same time, the costs of switching to other resources are very high.
The South-East of Europe and the Black Sea area is a very important zone because it is located geographically close to over two-thirds of the world’s oil and gas resources, especially those in the Middle East and the Caspian Sea. This transit area forms a natural energy bridge between source countries and consumer markets taking into account that the European Union is the second world gas market.
Energy security, together with food security, financial security, and trade security is part of a wider concept of national and individual security issues, namely economic security. However, achieving a certain level of security depends on the state’s ability to deal with the internal resources and to gain or maintain access to external economic resources.
The notion of energy security depends to a great extent on the regional and global context and on the position occupied in the economic circuit. Hence, consumers and energy-intensive industries ask for reasonable prices and feel fear for the interruptions in supply. Large oil producing countries consider the security of demand and incomes from the exports as an essential part of any discussion regarding the term of energy security. On the other hand, oil and gas companies claim that access to new reserves, the ability to develop new infrastructure and stable investment regimes are critical elements in assuring energy security.
However, for the European Union, the issue of energy security and particularly gas security represents a key point in any important energy debate. Actually, the EU which is formed of 28 member states is the largest world energy consumption, all of these states being dependent to a certain extent hydrocarbons imports, especially from the Russian Federation.
Although the EU policy militates against dependence on Russian gas, we are witness to a paradoxical phenomenon. Thus, in 2017, Gazprom announced a significant increase in gas exports to Europe, according to Financial Times. (At the end of 2006, the EU ranks second, after the US, with an oil consumption of around 14,995 million barrels per day and third, after the US and the Russian Federation, with a natural gas consumption of 18,869 billion m3 /year. (US Energy Information Administration, 2014).However, the data for 2012 presented that within the EU, the oil was the energy source with the largest quantity of imports having the highest import dependence share with about 90%. Natural gas ranks second with 66% on import dependence, followed by coal with 62%.In this line, it has been estimated the dependence on energy imports will increase from 50% at present to 65% in 2030 (European Commission 2014)
It is worth mentioning that Europe has faced serious issues in gas supply due to the conflict between Russia and Ukraine. As I have already pointed out, Europe’s supply is made by a pipeline’s network transiting Ukraine so that any disruption to Ukraine’s gas supply implicitly affects the rest of the European countries. Moreover, Russia has a slippery policy when it comes to its natural gas and uses very often the energy as a currency in diplomatic relations, and, as a result, prices are quasi non-unified, at the discretion of Gazprom. Considering all these challenges, European importing countries have turned their attention towards other viable alternative solutions. In this regard, a very often analyzed solution has been around gas supply from the Caspian Sea area, given the political situation created by gaining the independence of Caspian countries from the former Soviet Union. (Russia’s gas exports to Europe rose 8.1 percent last year to a record level of 193.9bn cubic meters (bcm), despite rising competition and concerns about the country’s dominance of supply (Henry Foy, ‘Russia’S Gas Exports To Europe Rise To Record High’ Financial Times 2018 https://www.ft.com/content )
This is the general context in which two essential alternative solutions intervene: the first is referred to the discovery of important offshore gas reserves in the Black Sea around 2012 most of them within the Romanian boundaries.
The second aspect is related to a new potential gas supply for Europe from the Caspian Sea region, by building a pipelines-corridor passing through Bulgaria, Romania, Hungary and Austria and further supplying mainly Central and Eastern Europe, as well as Western European countries through gas interconnections.
The linkage between the construction of this energy corridor and future gas exploration in the Black Sea is extremely close. The explanation is very simple: the pipeline will pass almost 200 miles from the Black Sea shore. Considering that through the Romanian pipeline network the connection is possible, that is why it is so important to analyze BRHA. Moreover, both projects are designed to transport non-Russian gas to Europe. In addition, it is superfluous to point out that in the absence of any current possibilities, the Black Sea gas can have no impact. The positive impact of these discoveries will only be given in the presence of the possibility of capitalizing on these natural resources by using them. In the same way, the gas pipeline has no current utility as it is not connected to any gas source.
Flavius Preoteasa LLM International Energy Law & Policy
