Energy security: running on empty?
You can come at energy security from many different angles. But one jumped out at me as I was thinking how to start this editorial.
I looked down at the day’s edition of the Financial Times and saw a front page quote relating to potential energy problems arising from the Ukraine crisis. ‘We have a responsibility to stand with our partners in difficult times,’ said a Western businessman.
Nothing major there. It’s a statement that has been made across the NATO Alliance by multiple politicians and diplomats since Russia’s Crimean annexation. But what made this statement special was that this person wasn’t talking about security partners. He was talking about business partners.
The statement was made by Bob Dudley, chief executive of BP (British Petroleum). He said this in Moscow, shortly after BP signed an estimated $300 million shale oil deal with Russia’s state-owned company Rosneft. BP owns just under 20% of Rosneft.
And this is not an isolated example of mixing of security and business interests. Rosneft has joint ventures with several other western energy companies, including ExxonMobil and Statoil.
This example shows how the West is sometimes not singing from the same hymn sheet in responding to the crisis. For example, why some countries with heavy investments and strategic interests in new energy infrastructure projects like the South Stream pipeline may not be as enthusiastic about sanctions as other NATO nations who want sterner responses.
But it also shows why this is so difficult.
Elected governments are there to provide security, but also to improve economies. These can often go hand in hand. But the latest crisis has shown that there may be conflicts in trying to attain both at the same time. For example, how can governments explain to their voters that more expensive fuel bills (which may well be a consequence of the crisis) are part of making the country safer?
In this edition of NATO Review, we look at who is set to win or lose (in terms of energy) from the change in the security landscape. We ask what role NATO can realistically play, in an area dominated (in the West at least) by private, independent, commercial companies. And we look at possible solutions – albeit medium term ones – that Europe can look to, so that it’s energy dependence on Russia can continue decreasing.