Khapter 7 external Energy Politics The establishment of the ECSC and Euratom in 1957 marked the £rst modern example of a collaborative 'external' energy policy in peacetime by any state, let alone six historically warring parties. Yet despite growing to include 28 countries in little over half a century and subsequently integrating energy matters between them, developing and sticking to a common position on energy relations with states outside the EU remains one of the most divisive issues in European politics. As two observers of European politics noted, nergy is both 'an issue of integration and disintegration' and one at may 'turn out to be the ultimate litmus test of [the EU's] polit-I and economic unity' (de Jong and van der Linde 2008). This chapter examines Europe's external energy policy in a global context and explains how it is using diplomacy and specifically rule export to ensure security of supplies from abroad with marked, but mixed success. Most work on the EU's external energy policy places emphasis on EU-Russian energy relations, the Energy Community, the role of the EU in international organizations, the building of a southern energy corridor, or the increasing role of supranational institutions (see e.g. Beyli 2012 Konstatyan 2012, Youngs 2011). Our approach differs slightly, in that we look at the EU and its energy needs and relations as a subset of the global competition for energy resources. Although the EU is not a consolidated unitary actor in the area of external energy relations, its external energy goals should 'be pursued in a spirit of solidarity among Member States' (Art. 194 TFEU), and therefore, it is helpful to understand when, where, and how this solidarity either does or does not function, and how the EU approaches trying to mitigate the latter. In so doing, we close the loop between the three dimensions of energy policy identified in Chapter 1 and show how essential, and yet distracting, the external dimension is to achieving comprehensive energy security. The time frames required for member states to reach a consensus and implement common external policies rarely keep pace with the 201 202 Energy Policy of the European Union External Energy Politics 203 rapid political and market developments that occur within and between external suppliers (Schubert 2006). This is a chronic problem for the EU, whose effects manifested across multiple gas delivery shortages resulting, among others, from: disputes between Russia and Ukraine; from shortfalls in t,NG deliveries due to a spike in demand from Japan following the Fukushima disaster (Japan relies on LNG imports for virtually all of its natural gas supply and pays a premium, e.g. 35-50% above average EU prices over the first quarter of 2013); or as cheap coal flows to Europe from a US surplus due to the lattcr's internal success in producing unconventional natural gas. The fact is that the EU faces stiff competition from other large consumer countries on the one hand and is subject to market forces beyond its control on the other, both of which affect the availability and pricing of key fossil fuel resources. At the core of the EU's external energy strategy is the need to secure the stable inflow of the resources it needs. In an international context, those needs translate into long-term reliable access to oil, natural gas, coal, and uranium. Of the four, it is the struggle to secure reliable access to and transport of oil and natural gas that have the most substantial effect on Europe's long-term energy security. A Public Consultation Document from the Commission notes that the 'EU energy system is not isolated' and '[f]or the next decades, access to hydrocarbon resources will remain of strategic importance' (European Commission 201 lh). The EU imported over €400 billion in oil and gas in 2012, which is more than double the average annual import cost between 1990 and 2011 (European Commission 2014) and indicative of its vulnerability to supply and price shocks. In its 2011 Communication, The EU Energy Policy: Engaging with Partners Beyond Our Borders, the Commission identified four objectives to ensure its energy supply (European Commission 201 lg). First, it wanted to improve internal coordination by establishing an information exchange mechanism on agreements between member states and their suppliers. The Commission argued that this would strengthen the external dimension of the EU's internal energy market and allow it to make agreements with third-party countries, including Russia, at the EU level. Second, the Commission wanted to strengthen its external energy supplier partnerships by establishing standardized rules for EU relations with suppliers and transit countries, including legally binding nuclear safety standards - what may also be called rule export. Third, it wanted to mainstream energy in its development policy. Fourth, it wanted to rank its energy partners, and thus treat them accordingly with appropriate instruments, by proposing to set up a Strategic Group for International Energy Cooperation in order to centralize discussions and help foster solidarity. The first two of these four objectives are real policies with measurable outcomes that could affect EU energy supply security. It is difficult to identify an immediate impact of the latter two, however. The fact is that EU external energy policy is best explained in terms of its dependence on and relationships with foreign suppliers, and particularly, the need to reduce or dissipate the former and improve the latter. This chapter begins with a brief overview that sets the context within which the external dimension for energy operates, including the core issues and obstacles it faces. Most notable among them is the need to achieve supply diversity and reliability and put solidarity into practice in light of an incomplete internal energy market. We then look a little closer at the relationship between sovereignty, solidarity, and energy resources before describing the EU's most important external partners, venues, and engagements, in particular the Energy Community and the EU's special bilateral energy relationships. We then turn to the thorny politics of pipelines and the maturing LNG options, examining the infrastructure in place and its consequences for policy. We round off the chapter with an examination of four geopolitical challenges that will affect, if not shape, the continued evolution of EU external energy policy. Setting the context The following subsection sets the context for understanding the EU's external energy policy and, based on the premise that there is a need to acquire additional resources from abroad, explains why the Union's external energy dimension is fraught with economic, geopolitical, and even ethical risks. The international energy market is imperfect. It is subject to speculation, political interests, and machinations, which add volatility to prices and, on occasion, disrupt the smooth flow of supply to consumers. Therefore, Europe's common external energy policy needs to be understood in geopolitical terms. International coal, uranium, and oil markets are relatively stable and globalized. Oil prices tend to be more volatile, but oil has not been subject to major 204 Energy Policy of the European Union supply disruptions since the late 1970s. Although natural External Energy Politics 205 increasingly being sold and transported via ship (31% of all traded gas worldwide and 26% of EU imports in 2012), the ETJ stj)j receives the vast majority (76%) via pipeline (BP 2013, Ferrier 2013). Even if the LNG market matures such that supplies are suffi cient to decouple the price of gas from oil - a circumstance that the EU is trying to help bring about by liberalizing its gas market using regional hubs - the sheer volume of gas consumed in Europe predicates that the EU will continue to depend on pipelines, and the suppliers and transit states connected to them, for the foreseeable future. Acquiring energy resources of any type entails complications Renewables such as wind and solar energy are widely distributed but costs and capabilities vary widely based on geography and climate. Fossil fuels are geographically concentrated, environmentally messy, but they also are fixed and reliable. Coal and uranium both used for electricity generation, can easily be transported in large quantities by ship or rail. Oil is shipped by tanker or, when geographic proximity permits, by pipeline. As there are many different suppliers of petroleum, the international market for oil is highly competitive and prices are market driven. Until the recent advent of technologies allowing gas to be liquefied and shipped from distant locations, natural gas was subject to regional politics. Shipping gas via pipeline from source to destination inexorably links specific suppliers to specific markets based on long-term contracts and fixed prices. Consequently, countries heavily dependent on imported natural gas tend to be geographically and politically limited in their options to find alternative suppliers. Nowhere is this more evident than in Europe. Indigenous reserves, the geographic distribution of external sources of gas and oil, technology, and the willingness of the EU's competitors to cooperate are all factors that affect the EU's ability to secure its foreign fossil fuel resources. Geography colours the EU's strategic energy interests and options. While EU members Denmark, the Netherlands, Germany, and the United Kingdom together sit upon around 2.2 trillion cubic meters (tcm) of proven natural gas reserves (BP 2013), those reserves amount to only 4% of the world's total. At current production and consumption ratios, if the four were required to provide the Union with all its needs, they would exhaust those reserves in less than a decade. Europe simply has no choice. It must look outside its borders for natural gas. Three factors determine Europe's ability to import those resources: the international reach of its pipeline network, the quantity and capacity of its LNG import terminals, and the competition it faces for the sources to feed those pipelines and ships. To meet these needs the EU looks to Russia, the Middle East, the Mediterranean Basin, and places as distant as Central Asia and as difficult to operate in as the Arctic. Europe's nearest gas suppliers are aligned along its frontiers: Norway is to the north-west, Algeria across the Mediterranean, and Russia to the east. Plans are afoot to create a fourth corridor to the south-east to acquire Caspian and eventually Iraqi, and even Iranian, resources, both of which are constrained by political rather than technical issues. Deposits in the Arctic are still undeveloped and their dimensions remain largely uncertain, as the very territory itself and resources it holds are in dispute. The world's remaining natural gas reserves are distributed across the globe, in some cases in large quantities, and slowly becoming available as LNG. The EU is a unique energy importer because it oscillates between decades-old attempts to agree on a common external energy policy on one hand and national interests and egoism on the other, the result of which is a series of overlapping arrangements to import supplies. That redundancy actually acts as a positive factor for EU security of supply. However, the lack of unity hinders the realization of a single internal energy market and creates economic advantages and disadvantages, diminishing Union-wide returns on any oversupply. It also shapes the external relations of individual member states. Austria, for example, imports natural gas from Russia via Ukraine (4.7 billion cubic meters in 2012), and then exports the vast majority westward, for a profit, benefiting its neighbours, but at the same time tying its economic fortunes to its relationship with Russia. Austria started importing Russian gas in 1968, long before it joined the EU, yet its case is emblematic of the energy divide found within Europe, one shaped by geographic proximity to land-based suppliers or maritime access. Coordinated and used for mutual benefit, these internal divisions can actually enhance the EU's security of supply, but left unused or, worse, misused, it can also be the source of internal disputes over both external policy and internal solidarity. The EU's internal divisions demonstrate the importance of geography in understanding the larger international energy game. The resources Europe requires are not evenly distributed around the 1 206 Energy Policy of the European Union External Energy Politics 207 globe. Australia and Canada are the world's primary suppliers of uranium ore. Coal is available in large quantities in the US, the EU Russia, India, Indonesia, and China. Most of the world's proven oil reserves, however, are located in the Middle East (with vast reserves of unconventional oil found in the US, Canada, and Russia); and most of the planet's natural gas comes from Russia, Qatar, and Iran, and increasingly from the US, with vast, but yet untapped, quantities in China. Europe is highly dependent on foreign suppliers for each of the primary resources. Uranium ore and coal, both used for power generation, do not pose nearly as many problems as oil and gas, because the suppliers of these resources are stable and reliable, as are the means to ship the minerals to and within the EU market. Nevertheless, the EU's commitment to reduce greenhouse gas emissions, and its earlier shift away from oil for use in power generation in response to the 1973 Arab oil embargo, only increased its dependence on its less environmentally damaging substitute, natural gas. Oil, meanwhile, remains essential for the transport industry. EU dependence on foreign-supplied oil and natural gas in 2012 was a staggering 87.4% and 65.3%, respectively, in 2013 (Eurostat 2015). It was also concentrated. Russia alone accounted for more than a third of the EU's oil imports, and Russia, Norway, and Algeria combined to supply 71 % of its gas imports. According to ENTSOG, while 'no Zone had a supply dependency on Norwegian, Algerian, Libyan or Azeri supplies over 20% [...] a range of Zones [were] reliant on Russian gas with 10 Zones having a supply dependency of 60% or more in 2013' (ENTSOG 2013a: 9). Yet as bleak as this picture may appear when it comes to oil, the EU has actually diversified its gas suppliers since 2006, when the same three suppliers accounted for almost 85% of EU gas imports. This is in part due to the economic downturn that began in 2007 and growth in LNG deliveries to EU terminals, which in 2011 accounted for 19% of its gas imports (Ratner et al. 2013). Also, because the international market to buy and ship oil is dynamic and globalized, sudden and extreme oil shortages are few and far between. Price volatility is part of the market, but as long as global production capacity exceeds demand, short- and medium-term access to supplies remains relatively secure. To hedge the risks of significant or prolonged supply disruptions, member states also maintain a minimal amount of strategic oil reserves that, in theory, should cover up to 100 days' worth of missing imports. Although 1 no similar arrangement formally exists with natural gas, gas hubs and storage facilities do exist, and in early 2014, national inventories of gas equalled between 60 and 90 days' worth of demand (Gloystein and Kahn 2014; European Commission (2009e)). Awareness of the risks to its gas supplies inspired the member states to increase their cooperation, and there has been good progress since 2004. For example, the EU established a new legal framework (Directive 2004/67/EC) to safeguard gas supplies (EP/ Council 2004a) and created two new high-level bodies, the EU Network of Energy Security Correspondents (energy experts from the member states) and the Gas Coordination Group. Following the gas supply crises of 2006 and 2009, the EU passed another regulation (994/2010) on the security of gas supplies (EP/Council 2010a), which aimed at harmonizing standards and setting out rules for crisis planning, as well as a coordinated response, in the event of future supply disruptions. Building upon the general principle that member states should diversify routes and sources of supply, the regulation called upon the member states to ensure that 'transmission system operators shall enable permanent bi-directional capacity on all cross-border interconnections' between the member states unless they request an exemption or make an alternative proposal for bi-directional capacity concerning the reverse direction (European Parliament and Council 2010a: Articles 6.5 and 7). It set a 3 December 2013 deadline to 'adapt the functioning of the transmission systems in part or as a whole' in order to enable those reverse flows. To meet these new requirements, the regulation also stipulates that the member states at least have to consider increasing their storage capacities. However, it was not made a requirement as in the case of oil. As of early 2014, EU law still did not require member states to maintain strategic reserves of natural gas. Thus, during emergency shortages, existing or ad-hoc arrangements have to be quickly implemented, making use of the member states' autonomous potential to store and move gas between them. Complicating matters, Russia delivers most of its gas supplies to Europe via a pipeline network built in the days of the Soviet Union. Designed originally to interlink the now defunct COMECON economic block, with the added value some years later of getting hard currency from Western Europe through exports, those pipelines cross independent states to reach the borders of the EU, adding another type of player to the calculation, the energy-transit state. Disputes between Russia and Ukraine, the latter being the primary 208 Energy Policy of the European Union export corridor to Europe, have led to significant disruptions to EU supply and complicate solidarity-based responses to Russian intran sigence in multilateral organizations or its security activities in the Caucusus. The most significant crisis occurred in 2009 when between 7 and 20 January, Russian gas supplies to Europe were completely shut off. While some EU member states could rely on other sources as well as reroute some of their own surpluses eastward, Slovakia, Poland, Hungary, and Romania were suddenly cut off in the cold of winter, a circumstance which Europe has endeavoured to avoid in the future (European Commission 2009). The recurrent Russia-Ukraine energy dilemma is indicative of the risks of energy interdependence, and in particular the politically sensitive issue of pipeline politics. Pipeline politics revolve around the routes pipelines take from source to destination. It is not merely a matter of supply. Since pipelines cross borders, national sovereignty is affected, and construction requires large amounts of money and long-term planning. While suppliers and consumers both want to maximize direct access, minimizing costs for consumers and maximizing profits for suppliers, transit states through which the pipelines flow take cash fees or i- kind supplies, raising costs and reducing profits. When disruptions occur along a transit route, everyone loses. The choice of routes affects national incomes and consumer supply security. As a result, international competition over which lines to build, which routes to follow, and which volumes of supplies to deliver are often the source of heated negotiations (at both the government and commercial levels), and have provided the basis for bilateral cooperation and competition. Such was the case when Russia and Germany agreed to jointly build Nord Stream, a project that, despite original opposition, has proven to be a positive addition to Germany's security of supply. In addition to physical pipelines and their routes, the EU also needs to consider a complex set of economic, technological, and political issues that directly or indirectly affect its security of supply of gas and oil. Any external energy strategy involves investments in new energy technologies, the construction of deep-water ports, upstream exploration and production, downstream distribution, environmental considerations, competition for supplies, and common regulatory frameworks. Equally important is the economic and political conditions of its major suppliers. Many of them (Algeria, Norway, and Russia in particular) rely on energy exports to the EU for substantial shares of their GDP and, with the notable External Energy Politics 209 exception of Norway, they tend to lack transparency, and suffer from corruption, domestic inequality, and political instability (Schubert 2006). Consequently, the EU not only faces material risks associated with geographical access, it also faces legal and ethical dilemmas over governance standards, transparency, and economic development in each choice of supplier. For the EU and its energy companies that means guaranteeing the security of its foreign direct investments in the upstream sectors of key energy partners such as Russia and prospective ones like Azerbaijan. To that end, the EU employs traditional economic statecraft at the bilateral and multilateral level. Through the former it has secured supplies from Azerbaijan and established better communications and information exchanges with Russia; through the latter it has worked to export its internal energy market rules, primarily through the Energy Community. Energy geopolitics also includes struggles for regional domination and spheres of influence. The EU's struggle to diversify its sources and suppliers place it right in the middle of the some of the world's longest running and thorniest venues of international competition. For example, not only does the Caspian region possess oil and natural gas in abundance, its position sandwiched between powerful neighbours Russia, Iran, and China makes it the perennial target of political manoeuvring. The US is no less involved, as it sees Central Asian independence as a bulwark against Russian expansion and Iranian influence. Early twenty-first century activity in the region is strikingly similar to The Great Game of the nineteenth century, when the UK and Russia drew up the region's borders. Access to African energy resources is no different, as Chinese, Russian, American, Indian, and European companies compete fiercely to secure deliveries to their respective domestic markets, generate revenues, and control physical access to resources headed to other markets. Moreover, because many of Europe's competitors operate state-owned energy conglomerates, the quest for energy resources is not a mere matter of market economics, but rather a geopolitical game of Monopoly. One of the large global players, the United States, broadly shares the EU's international energy goals, particularly as pertains to establishing universal norms and laws, and soon may develop into a natural gas supplier (EIA 2014, IEA 2013). China is a powerful competitive consumer also actively seeking to secure resources abroad. It is doing so by integrating its state-owned companies into 210 Energy Policy of the European Union the global supply chain, of which the likely outcome is an additio to rather than a drawdown of supplies in the market, because t\\ distance between mainland China and its companies' remote activ^ ties makes exclusive deliveries too expensive. However, Russian investments appear to be less oriented towards adding supplies t the global market than at maximizing Moscow's share of existi global trade, an approach that meshes with Vladimir Putin's notion of a Russian renaissance. What is particularly troubling for the EU is that both Russia and China prefer a multipolar rather than non-polar world, where regionalization trumps multilateralism and energy is a central component of their respective strategies (Die Welt 2008, Isachenkov 2003). A multipolar world without a commensurate increase in global norms and rules would not bode well for advocates of global governance, and could easily endanger institutions such as the Energy Community. Russia's hard-handed tactics in Georgia and Ukraine may be an indicarion of what is to come. Meanwhile China singled out energy as a fundamental component of its security environment (PRC 2006, 2009: 4). Instability and uncertainty about North Africa's regimes also plays a role in shaping the EU's external energy planning. Political unrest is prevalent across the Maghreb. If and when violence erupts, key components of national energy infrastructures could be disrupted or destroyed. In Algeria, this could affect gas supplies to Spain and France. In Egypt it could reduce or even halt shipping traffic through the Suez Canal, a waterway of tremendous value to European energy security. Post-war Libyan unrest has already led to a several month-long halt in gas exports to Italy in 2013. Added to the political uncertainty is the economic one, brought on by the region's future domestic demand, which is expected to eat into energy exports (Westphal 2011). Prior to the oil crises of the 1970s, privately owned international oil companies (IOC) controlled most of the world's oil reserves. Today, private, commercial energy companies control very little of the world's physical oil and natural gas resources and have to compete with state-owned energy companies from Russia, China, and India, among others, for access to resources, ownership of pipelines, ports, refineries, and distribution facilities. It is almost impossible to separate the actions of Russia's Gazprom or China's CNOOC from the foreign policies of their respective governments. All of these factors, from political instability to the increased role of External Energy Politics 211 j-statc commercial enterprises, from the potential for new discoveries to structural changes in the international energy market, ffleans that the EU must diligently pursue a multilateral legal framework for the exploration and delivery of fossil fuel resources. Finally, similar underlying motivations drive both the EU's external energy policy and those of its suppliers. Whereas the EU focuses on security of supply - reliable delivery from multiple sUppliers with 'transparent and non-discriminatory security of supply policies' (Council 2004) - its suppliers, seek security of sales - reliable, long-term commitments by multiple customers purchasing on long-term contracts, and investing in upstream exploration and infrastructure with as little market regulation and meddling as possible. Thus, security and diversity are equally important to planning for both parties. They simply come with different priorities. On the price side, exporters want prices just high enough to stabilize their income and, often, their national budgets, but low enough to offset downward pressure in demand. Buyer diversity translates into greater consumer competition for resources, adds upward pressure on demand, and increases revenues, which in turn drives a deep wedge between EU member states as well as between the EU and its primary competitors. In summary, the global energy game is one of long-term investments and strategic positioning. Poor planning or a lack of commitment can leave countries vulnerable and dependent upon the vagaries of international politics. Consequently, every EU energy initiative on the global stage is under relentless stress. These conditions help explain why the EU focuses its external energy policy on integrating suppliers, consumers, national interests, and geopolitical forces in regional, and ultimately global, multilateral legal frameworks designed to mitigate political obstacles and maximize the market benefits for its participants. Sovereignty, solidarity, and energy resources Centrifugal forces hamper the EU's pursuit of a common external energy policy. Issues such as sovereignty, trade relations, foreign dependency levels, the absence of a global legal framework for the exploration and trade of energy resources, and the anarchic nature of the international political system all combine to weaken European solidarity. Consequently, the EU's outward approach towards energy more often resembles a set of independent islands than it 1 212 Energy Policy of the European Union External Energy Politics 213 does a unified block. Of all the forces that test FU solidary national sovereignty is the most powerful, and energy is one of tb. issues at its core. Vital to economic growth and national security governments loath relinquishing such powers as the control of mining rights, transit permissions, customs and border controls protection of critical infrastructure, and even market regulation' The member states have transferred some energy competences to the EU's supranational institutions, particularly as pertains to market oversight. However, because the member states retain full autonomy over their respective national energy mixes, each state also maintains independent relationships with foreign suppliers in the form of bilateral agreements, in many cases taking the form of long-term supply contracts. These competing foreign relations exacerbate existing internal divisions over external policies and hamper the Commission's efforts to formulate a unified external approach to energy. Member states vary significantly in size and level of dependence on particular energy supplies (see also Chapter 1 on the EU's energy portfolio). Natural gas provides a case in point. The EU's largest energy markets are located in Western Europe. France and Italy import large amounts of natural gas from multiple external sources largely because of LNG and proximity to North Africa. In both cases, however, natural gas does not constitute the largest share of their primary energy needs. The same is true of Germany, which imports from Norway, Russia, and the Netherlands (to a lesser extent also Denmark and the UK). The opposite is the case in many of the Eastern and Baltic member states where the economies are significantly smaller, but foreign dependence on a single supplier is dangerously high (in some cases approaching 100%). Moreover, some states are more dependent on natural gas for their electricity generation than others. Those that currently rely on coal to generate their electricity are under pressure to increase their power-generating share of natural gas or rcncvvables to meet emissions targets. Variances in Europe's domestic energy mixes and the incomplete nature of the internal energy market all but guarantee fundamentally different priorities for each member state. Thus, the very forces that should unite the member states actually divide them. While matters of sovereignty and trade dependence pull member states away from each other, changes in the international energy environment over the last four decades considerably complicated matters. In 1972, one year before an Arab oil embargo sent £liropean countries dashing for alternatives, OECD Europe generated more than a quarter of its electricity with oil (IEA 1997). pollowing the embargo, Western European states and the US moved to remedy their dangerous dependency, banding together to establish the International Energy Agency in an attempt to coordinate the demand side of the market, and began switching fuels and building emergency stocks. Most increased their use of coal and some turned permanently towards nuclear power. One example of the latter was France, where oil accounted for as much as 49.3% of electricity generation in 1972 (Daintith and Hanch 1986), whereas by 2006, oil accounted for a mere 1% of French electricity generation. Yet, France's shift to nuclear was not uniform across the EU. The risks associated with oil dependency, combined with the existential danger of nuclear accidents, impelled many EU countries, including those that would join later, to turn to natural gas. This had the positive effect of diminishing the European electricity market's dependence on Middle East oil. However, most EU members ended up exchanging foreign dependence on one source for another. Large discoveries in the North Sea provided a reliable alternative at first, but as production peaked and demand increased, Russian exports grew in importance. The EU's slide into external dependence for natural gas accelerated in the late twentieth century, as environmental concerns and fears of global warming pushed Europe to increase its share of natural gas in power generation as a means to reduce harmful emissions. By 2011, oil's share of EU electricity generation had declined to almost 2%, while natural gas had risen above 22% and constituted 35% of gross inland consumption (European Commission 2013b). Still, it would be difficult to argue that the EU is substantially more secure today than in the past, and its energy crises keep returning like clockwork. If the 1970s was defined by Europe's dependence on Middle Eastern oil, the early twenty-first century is defined by its dependence on Russian gas. Much focus is placed on the security of supply, but it is actually the insecurity about existing supplies and specific suppliers from abroad that is the driving force behind the pursuit of a common energy policy. Although gas and oil are very different products in terms of their downstream delivery and consumption, past experiences involving oil are useful in understanding the importance of gas. The history of oil teaches us that international security conditions can change rapidly, and more often than not, the EU will have little to no ability to prevent serious disruptions. This was true 214 Energy Policy of the European Union External Energy Politics 215 in 1956 during the Suez Crisis, the 1970s with the Arab oil embargo the 1980s' tanker wars in the Persian Gulf, and more recently with Russia over Ukraine (gas) and sanctions on [ran have kept vast gas resources that could flow to Europe buried underground. The EU must diversify not only the mix of fuels it uses but also the suppliers and transit routes in order to maximize the security 0f its external energy supplies. While integration of member state networks is moving forward, the task remains incomplete. This all but forces individual states to coordinate their own imports bilaterally with the nearest or most accessible suppliers. Along its eastern frontier, this translates into relations with Russia. Along its southwestern stretch, this means Algeria, and to the northwest, Norway. Therefore, competing EU energy interests divide along geographic lines according to respective dependence, another fact that divides Europe rather than unites it. Europe's past energy crises demonstrate the need for emergency planning. Maintaining multiple suppliers and routes, a large domestic storage capacity, fuel-switching plans, a high-capacity infrastructure, and being part of an internal market are each essential elements of such planning. The first two (suppliers and routes) are external in nature. The remaining four (stockpiles, fuel-switching plans, infrastructure, and the creation of a fully unified internal energy market) are matters of internal EU politics. None of these issues exist in a vacuum. For Europe to formulate and execute a coherent external energy policy, it needs to resolve its internal issues. Externally, the EU is expanding the outer boundaries of its internal market through diplomacy and rule export. It uses multilateral agreements and programmes such as the Energy Charter, Black Sea Synergy, and Euro-Mediterranean Cooperation, as well as institutions such as the Energy Community, the WTO, and the International Energy Agency to pursue a common set of standards for protecting investments and deliveries. It is trying to integrate the national energy grids and economies of its neighbours and suppliers directly into the European system of governance. This is particularly germane in the context of pipelines, where transit agreements, fee structures, ownership rights, and transparency issues all play a vital role in Europe's energy security. The EU's strategy has been largely successful along its periphery, but it is not free of obstacles. While EU influence is strongest along its borders, it is uneven. For example, European companies and politic5 dominate North African energy production, but do not do so in Russia, the Caucasus, or Caspian Littoral. Algeria criticizes Europe's strategy of demanding transparency, open access, full ownership, and market liberalization in exchange for aid as amounting to unacceptable meddling (Schubert 2007). Pushing Turkey to accept a role as transit state (as opposed to importer/ exporter) challenges Ankara's cherished role as arbitrator between fast and West, not to mention cutting away the country's profits. Russia sees the Caucusus within its sphere of influence and considers control of its own mineral resources as a matter of national pride and security and, thus, objects to EU efforts to push for open access into its domestic energy market or make independent energy agreements with Ukraine. The EU has had some success in Central Eurasia, but its efforts also inspired Russia to propose an alternative (first the South Stream pipeline, and when that failed, then the Turkish Stream) in order to secure its primary role as the EU's premier supplier of natural gas. The circumstances with Russia are special and unique along the EU's periphery. Neither Norway nor the countries of North Africa are dominated by one foreign power, as is the case of those countries that were part of the former Soviet Union. EU attempts to influence affairs in the Caucasus were set back in 2008 when Russia invaded Georgia, and again in 2014 when unrest in Ukraine led to a not-so subtle military intervention and annexation of the Crimea by Moscow. Disruptions along Russia's East European gas and oil supply routes through Ukraine and Belarus demonstrate Europe's weakness in responding to Russia's drive for regional hegemony. Each of these examples illustrates a poignant problem for the EU, namely that pursuant to its external energy needs, the EU finds itself matching into geopolitical challenges rife with troubles, four examples of which we provide towards the end of this chapter. External actions: Europeanization, diplomacy, and rule export EU external energy policy matured substantially in the early twenty-first century. Supranational institutions are increasingly taking the initiative in the field of energy, particularly as pertains to setting targets. The EU is even supplanting the member states as the principal initiator of external energy policies (Beyli 2012). For example, in 2011 the Commission published a Communication on security of 216 Energy Policy of the European Union energy supply and international cooperation - The El] Ener Policy: Engaging with Partners Beyond Our Borders - where it laid out four main priorities 'to further develop an external enern policy' (European Commission 201 lg), and in November 2011 the Council approved a similar set of priorities (Council 2011). In brief the common priorities suggested by the Commission and set by the Council were to: (1) strengthen internal coordination of external energy policy, (2) strengthen EU cooperation with third-party countries, (3) deepen energy partnerships, and (4) support developing economies. To strengthen coordination, the Commission and Council set out to institutionalize an information exchange of bilateral agreements that member states either already have or negotiate with third-party countries, and to create the possibility for the EU to directly negotiate with third parties, particularly in the area of strategic infrastructure projecrs. They also proposed to increase both the number and quality of meetings of the Energy Council in order to prepare a consistent and coordinated message for all high-level meetings of international organizations. To strengthen EU cooperation with third-party countries, they agreed to utilize multilateral instruments to extend the application of the EU's regulatory framework by enlarging the 'the Energy Community Treaty to neighbouring countries' (Council 2011: 4), including Turkey and 'faster integrating Ukraine into the Energy Community' (European Commission 201 lg: 5). They also identified the Southern Corridor, the Eastern Corridor, and the Mediterranean Basin as 'priority areas for energy projects', and recognized the dual needs to extend the existing early warning mechanisms (EWM) for possible disruptions or dips in supply, and to expand cooperation in research and development of future-oriented energy technologies. To strengthen its energy partnerships, the member states agreed to expand where possible and establish where necessary energy partnerships with North Africa, the Middle East, the Caspian, and the Black Sea; and committed to resolve outstanding issues with Russia under the framework of its Partnership and Cooperation Agreement (PCA), including access to energy resources and infrastructure, investment protection, and non-discriminatory pricing of energy resources. Finally, both the Commission and the Council documents promote the idea of supporting developing economies through a basic set of principles such as reciprocity, transparency, investment protection, and sustainable development of third-party energy sectors. They argue External Energy Politics 21 7 that doing so will diversify suppliers in the market and, by tying EU cooperation in the energy sector to institutional and legal reform, help contain the negative environmental consequences that the requisite increase in exploration and production will generate. Together, these actions represent the bulwark of contemporary EU external energy policy. The Commission spearheads most external energy policy actions with heads of government playing their part as well. Although its role remains quite limited, the EU's External Action Service is increasingly getting involved in some of the second-level discussions and dialogues (Van Vooren 2012). In May 2013, the European Council instructed the Council to review developments regarding EU external energy policy, and in December, the Council issued a follow-up report that reaffirmed the 2011 Council conclusion as constituting the first comprehensive EU external energy policy (Council 2013). As a result, the Commission and the member states increased both the quantity and quality of cooperation on subjects relating to external energy matters. Energy became a regular topic of the Strategic Group for International Energy Cooperation (SCIEC), which had already put on its agenda energy relations with China, Ukraine, North Africa, the US, and Russia. The SGIEC, established in 2012 on the recommendation of the Commission in its Communication on security of energy supply and international cooperation (European Commission 2011g), brings together representatives from the member states and 'relevant EU services' to ensure better coordination of the EU external policy issues and strengthen the negotiating position of the EU in international fora by developing a common message on EU cooperation with third-party countries. Commission representatives now raise energy issues at virtually every international forum and integrate the topic into more Council formations, including those not related to energy. As a result, there appears to be a better understanding of common principles and priorities among the member states. In fact, since 2011, the Commission has made significant progress on several external energy fronts. It signed Association Agreements with Moldova and Georgia, both of which contain key energy provisions. It progressed in negotiating an agreement on electricity networks and market interfaces between the Baltic member states and Russia and Belarus (Council 2013). It initiated adding a Protocol on electricity to the EU-Switzerland Free Trade Agreement, 218 Energy Policy of the European Union External Energy Politics 219 and negotiated a legal framework for a trans-Caspian natural ga pipeline system with Turkmenistan and Azerbaijan. It ajSQ concluded a Memorandum of Understanding on energy coopera tion with Algeria, and, in December 2013, initiated talks on forming an Energy Community with the members of the Union for the Mediterranean (UfM). In terms of key partnerships, the Commission solidified its working relationships with the US, China, and OPEC, and engaged Russia through the EU-Russia Permanent Partnership Council (PPC) on Energy and the EU-Russia Energy Dialogue. An outgrowth of the latter was the March 2013 EU-Russia 2050 Roadmap', in which the Commission set itself the lofty goal to bring Russia and the EU together in 'a common, subcontinent wide, energy market' by 2050. The Roadmap is, however, non-binding. Given that it will 'require the gradual approximation of rules, standards and markets in the field of energy', such goals may prove overly optimistic (see European Commission and Russian Federation 2013). Perhaps the most visible sign of progress towards a common external energy policy was getting approval for the controversial proposal to set up the exchange mechanism on intergovernmental energy agreements. When initially proposed in 2011, member states were sceptical. It seemed like a direct challenge to their sovereignty, a matter of competence reserved for the member states. However, as a sign of the growing solidarity - at least in terms of coordinating external supplies - the Council and Parliament passed Decision 994/2012/KU obliging member states to submit their already existing legally binding agreements that have 'an impact on the operation or the functioning of the internal energy market or on the security of energy supply and their new agreements, once ratified' (European Commission 2013g). The Commission now plays an oversight role in the bilateral energy relations of the member states, controlling whether their agreements adhere to internal market rules. It can now not only provide assistance during bilateral negotiations but also order ex ante revisions. By the conclusion of 2013, the Commission had already evaluated more than a hundred separate agreements. All of these developments point to clear progress in the external energy domain. The EU in 2014 is much closer to speaking with one voice than it was in 2010. However, solidarity is a goal and a process, not an irreversible fact or irrevocable principle. The fact remains tnat there is much more still to do than has already been done. For example, in terms of speaking with one voice, the EU needs to increase the consistency and coordination of the messages its representatives deliver and the outcomes its negotiators pursue jn dealings with international organizations. In its review of the Commission's progress, the Council argued that this can be achieved by preparing what it calls 'lines to take' (Council 2013). Still, establishing a common voice is not a replacement for shared interests or principles. Coordinating, and even consolidating the latter two, requires significantly enhanced interaction at the EU level between the relevant authorities and representatives of the member states. To an extent this has already been achieved, but it is incomplete. The Strategic Group for International Energy Cooperation, for example, met only six times in total between 2012 and 2013, and although the Transport, Telecommunications and Energy Council (TTE) meets on average six times a year, external energy issues are not always on the agenda, which is an easy opportunity lost. Despite progress on the Caspian front, there is an urgent need to further develop strategic energy corridors and, in particular, to fund key projects of common interest (PCI), such as the Trans-Anatolian Pipeline (TANAP), that open new access routes to gas and oil. This latter point takes on special meaning when one considers the effort and political weight thrown behind Nabucco, a project that, despite Brussels' support, ultimately had to be truncated to a line entirely within the boundaries of the EU. Equally important, the EU needs to find ways to capitalize on new discoveries, such as those in the Levant Basin and the Black Sea, either through financing, expanding the Energy Community southward, or creating a Mediterranean Energy Community. The latter option is problematic because Israel and Lebanon have no official relations and disagree over who has rights to develop newly discovered offshore fields. On the broader regional scale, the EU needs to continue to expand the Energy Community's reach and depth, use its Neighbourhood Policy in general, and the Eastern Partnership (EaP) (European Council 2009) and the Union for the Mediterranean specifically, to extend the coverage of the EU's energy acquis, as well as make certain that any final arrangement it reaches with the US on transatlantic trade, the so-called Transatlantic Trade and Investment Partnership (TTIP), includes an energy chapter. 220 Energy Policy of the European Union External Energy Politics 221 Main partners, venues, and engagements Diplomacy and economic statecraft are the primary tools through which the EU secures its external energy interests. Those interests translate into actively trying either to export or extend the coverage of its internal energy rules through bilateral agreements, multilateral institutions, and international fora, such as the Eastern Partnership and the Union for the Mediterranean. The same is true with its 'energy dialogues', which it maintains with Russia (since 2000), Brazil (since 2007), China (2005), Japan (2007) and OPEC (since 2004), and through its bilateral relations with important energy partners such as Algeria, Iraq, Turkey, Ukraine, and the US the latter of which established a ministerial-level Energy Council in 2009. The Presidents of the European Council and the Commission, as well as the DG Energy, frequently take part in bilateral summits. Furthermore, EU representatives of various levels work regularly with counterparts in major international venues including the IE A, IAEA, the International Renewable Energy Agency (IRENA), the ECT, G8 and G20 summits, the International Energy Forum (IEF), IPEEC, and the UN; they even attend ministerial meetings at OPEC, and regularly communicate with representatives of the Gulf Cooperation Council (GCC) through the EU-GCC Energy Experts Group. In 201.3, such efforts with the IAEA led to a Memorandum of Understanding on nuclear safety that created a framework for cooperation in areas such as emergency preparedness. Yet, of all the different venues in which the EU operates to secure its energy interests, one stands out: the Energy Community. The Energy Community The European Council identifies the Energy Community as one of the EU's most successful foreign policy frameworks (Council 2013). Its entry into force in 2006 was the culmination of years of EU effort to strengthen the rule of law on energy issues among the EU's main energy-supplying partners, particularly as pertains to trade and investments. It is an agreement between the EU and its southeastern neighbours, several of which were slated to become member states (2006/500/EC). The idea behind it began in 1991 when Dutch Prime Minister Ruud Lubbers proposed establishing a European Energy Community. It took its first form with the 1994 signing of the Energy Charter Treaty (ECT) and the Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA). The EU approved the treaty and protocol in 1997 (Council 1998) and both entered into force in 1998. Since then, the treaty was amended once (2010) to include some trade aspects and, in 2012, its secretariat approved a plan for consolidation, expansion, and outreach (CONEXO) with the objectives of, inter alia, expanding its geographic reach by convincing states with observer status (such as China) to accede to the treaty. As of early 2014, the ECT had 54 signatories, including the EU and Euratom. On the basis of the working relationships established through the ECT, the EU agreed with nine parties (Albania, Bulgaria, Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Romania, Serbia, and Kosovo) in 2005 to create the Energy Community. Romania, Bulgaria, and Croatia have since joined the EU, while Moldova and Ukraine became full members in 2010 and 2011, respectively. The Energy Community is a diplomatic success story for the EU, a model example of both what the F.U wants to achieve in its external policy as well as how it goes about pursuing its interests. The purpose of the community is twofold. First, it aims to 'organize the relations between the Parties and create a legal and economic framework in relation to Network Energy', which it defines as 'the electricity and gas sectots falling within the scope of the European Community Directives 2003/54/EC and 2003/55/EC1' (Council 2006c: 19; see 2006b for the related Council decision). Second, it should guarantee stable!markets and a common regulatory framework to deliver continuous energy supplies to and between its participants. In essence] the Energy Community extends the EU's acquis cotnmunautaire on energy, environment, competition, and renewables to its south-eastern neighbours, a perfect example of rule export. It establishes the principle of mutual assistance in times of stress and through key governing institutions, coordinates policies between them. It is in many regards a legal extension of the EU, and a necessary prerequisite for further enlargement. Energy Community decisions are made by its Ministerial Council and Permanent High Level Group (PHLG), which prepares materials for the ministers, and each consists of two EU representatives. It has a secretariat, which reviews the implementation of community decisions, and an Energy Community Regulatory Board (ECRB) consisting of regulators from the contracting parties and officials from the European Commission who coordinate an 222 Energy Policy of the European Union External Energy Politics 223 exchange of information (and in some cases establishes regulations) on regional gas and electricity markets. The Energy Community has tallied several achievements since coming into existence. Beyond its geographical extension to include countries outside the Balkan region (Moldova and Ukraine) national legislation of its participants are now largely in line with EU law. The treaty was also strengthened to include F.U legislation on security of supply, energy efficiency, energy labelling, and renewable energy, and its participants began implementing the EU's third package on the internal energy market and the EU's 2009 directive to maintain emergency oil stocks. Most important of all, however, was the October 2013 decision by the Ministerial Council to extend the duration of the treaty for a further ten years (Energy Community 2013). Additional bilateral and multilateral efforts The EU's diplomatic activities in relation to energy also include efforts to form coordination groups among countries along its periphery. These are often, but not exclusively, made through the auspices of the EU's Neighbourhood Policy, which it launched in 2003 in order to smooth relations with its neighbours in light of the 2004 enlargement. Among the most relevant to energy are the Euro-Mediterranean Energy Partnership and the various energy aspects of its partnerships and cooperation agreements (PCAs). As of March 2014, the EU maintained PCAs with Russia, the countries of Eastern Europe, the Southern Caucasus, and Central Asia (Council/Commission 1997, 1998a-b, 1999, 1999a-e, 2009). PCAs cover a broad range of political and economic reforms that aid in the transition to a market economy. To varying degrees they also contain energy chapters. Through the Euro-Mediterranean Energy Partnership, (EURO MED; now known as the Union for the Mediterranean, or UFM), the EU promoted the Mediterranean Solar Plan (20 GW of regional solar power generation capacities by 2020) providing access to over €5 million through its Neighbourhood Investment Facility (European Commission 2009f), adding a technical assistance programme in 2010, and approving an additional €5 million in 2012 (European Commission 2012g). The EU's ongoing efforts to support 'the gradual establishment of a Mediterranean electricity regional market' constitute an essential component of its efforts to diversify its energy supply (European Commission 2014c). The EU likewise supports projects between the EU and the Littoral states of the Black and Caspian Seas, particularly via the Interstate Oil and Gas Transport to Europe platform (INOGATE), which it funds via the European Neighbourhood and Partnership Instrument (ENPI). Vforking within the frameworks of the Baku Initiative (which was finalized in 2006 and seeks, among other things, to harmonize regional energy markets and spur investments) and the Eastern Partnership (a venue for trade discussions and travel agreements), INOGATE provides a framework for cooperation in the areas of oil and gas, electricity, renewable energy, and energy efficiency between regional partners. Since its inception in 1996, INOGATE has completed some 70 projects, including ones closely related to EU energy security, such as promoting best practices and technologies used to detect, measure, and reduce gas losses from pipelines (European Commission 2006d). On the oil front, the EU helped set up the Joint Oil Data Initiative (JODI), a database of oil market players and transactions, as a method to bring transparency to one of the least transparent markets in the world. JODI is now a permanent reporting mechanism with 90 member economies, representing 90% of global oil supply and demand, that is, a platform that substantially enhances stability in the international oil market, particularly for investors. As the EU shares a number of common principles with the US (open, transparent, and competitive global energy markets), and because it is not dependent on the US for oil or gas, its energy cooperation with Washington is a great deal simpler than it is with its immediate neighbours. In 2009, Washington proposed and Brussels agreed to establish the EU-US Energy Council to coordinate efforts on energy security, policy, and research and development in new technologies, including the sustainable development of biofuels and biomass, new materials, and Smart Grids (EEAS 2009, 2009a). They also agreed to cooperate on building up the Euro-Mediterranean Gas and Electricity Ring, as well as help create a new Southern energy corridor to the FU. Its meetings include the US Secretaries of State and F.nergy and the EU Commissioners for External Relations, Knergy, and Science and Research, as well as the acting Commission President and High Representative. Although the number of specific energy-related agreements are so far few (e.g. energy appliance labelling), energy cooperation between the EU and the US led to the early development of discussion on raw 224 Energy Policy of the European Union materials and energy as part of their bilateral TTIP talks. The true measure of EU-US energy relations, however, stands to change in the coming decades as the US continues to press forward with the development and export of liquefied natural gas, which, if it comes to fruition, could substantially enhance the EU's long-term energy prospects. The EU's most important bilateral diplomatic efforts focus on Russia through the EU-Russia Energy Dialogue. Its success has been limited. Launched in 2000, the Dialogue focuses on improving the investment climate in the Russian energy sector, and to secure and expand infrastructure in order to ensure continued production and delivery of sufficient supplies to the European energy market Despite the relatively high-level communication and quantity of interactions, however, the process resembles what one expert called 'travelling without moving' (Talseh 2012). As part of the Dialogue, the EU and Russia established bilateral fora (e.g. the EU-Russia Partnership for Modernisation (2010), Council (of the European Union) (2010)), a shared agenda for economic reform, and building a sustainable low-carbon economy. The EU and Russia also cooperate in the Gas Advisory Council and regularly exchange vital energy-related data through an early warning mechanism (see below). The Gas Advisory Council, which held its first meeting in November 2011, brings EU and Russian gas companies and experts together to assess and make recommendations for the long-term cooperation in the area of gas supplies. At their 8 meeting in November 2013, the two parties concluded, inter alia, that in order for the F.U to 'meet its 20-20-20 targets', Russian gas supplies 'may not decline in any scenario' (GAC 2013). Meanwhile, following the 2009 gas disruptions resulting from a pricing dispute between Moscow and Kiev, the EU and Russia established an early warning mechanism to identify risks before they occur and ensure rapid responses in the event of emergencies (European Commission 20()9g). The degree to which the arrangement works, however, remains untested. In February 2011, the two updated their agreement to provide for joint actions to be taken in the event of an emergency, including setting up special monitoring groups and notification procedures. Like its predecessor, however, the agreement is not binding and 'does not constitute an international agreement or other legally binding document', an emblematic and recurrent problem in the energy relationship between the EU and its most important supplier (European Commission 20111). External Energy Politics 225 pipelines and their politics pipelines delivering natural gas and oil to the FJJ constitute its most Important economic lifeline. The politics and economics of routes, distances, and capacities are some of the most complex and important features of an energy policy's external dimension. Unlike shipped commodities, pipelines create long-term, semi-permanent relationships between suppliers and consumers that lock them, de facto, into a marriage of convenience. Indeed, as one energy observer astutely noted, 'control of pipeline routes is almost as important as the control over the resources that flow through them' (Karbuz 2010). Once a pipeline route is up and running, it quickly becomes a lifeline that is difficult and risky to cut, and there are always winners and losers in the game. For example, by building the Nord Stream pipeline, Germany secured a reliable supply of up to 55 bem (eventually) of Russian gas per annum for half a century, but in the process reduced the relevance of Ukraine, bypassed Poland, and added considerable constraints on German foreign policy, and thus that of the EU, vis-a-vis its relations with Moscow. The most important factor in determining a pipeline's economic and political value is its maximum capacity, because upgrading reception terminals or adding storage facilities is far less expensive and complicated than laying new lines. Used to maximum capacity every day of the year, the EU's existing infrastructure of natural gas import pipelines could deliver approximately 13,400 GWh per day (or circa 405 bem of natural gas every year) (ENTSOG 2013; see Table 7.1). Existing LNG terminals can add another 192 bem of natural gas to that calculation, for a grand total of circa 597 bem per annum (see Table 7.2), more than enough to meet all of the EU's 2012 annual gas consumption needs (circa 435 bem). These maximum capacities obviously are never fully realized. Gas demand rises and falls with the weather and the competitive price of alternatives, such as cheap coal. Pipelines regularly close down for maintenance. In its Ten-Year Network Development Plan (TYNDP), ENTSOG notes that it evaluates pipelines and related projects on the basis of the adaptability and resilience of the European gas system, the dependency of the EU's gas zones on specific supply sources, and the capability of the network to enable supply diversification (ENTSOG 2013a). At issue, then, is not so much import capacity, but rather the distribution of delivery capacities, which creates political and economic 226 Energy Policy of the European Union Table 7.1 EU gas import infrastructure (2013) Country of Origin [via transit state] (popular names) Technical, physical Capacity capacity (GWh/d) (bcm/y) (ENTSOG) From NORWAY (Vestcrled, Flags NLGP, Fuka & Sage, Europipe I & I, Norpipc System, Zeepipe, Franpipe, and Langcled South) From NORTH AFRICA (Maghreb-Europe, Medgaz, Transmed, and Green Stream) From RUSSIA [Directl (Multipile Offshoots of Northern Lights and Yamal-Europc I, Nord Stream) From RUSSIA [via BELARUS] (Yamal-Europe I and Northern Lights) From RUSSIA [via UKRAINE] From TURKEY 4,234.4 2.155.0 1.601.1 1,410.8 4.022.2 60.5 Grand Total 13,484.0 128.44 65.36 48.56 39.53 122.00 1.83 405.72 Notes: Conversion from GWh/d to bem = GWh/d * 0.0831/1,000*365 based on IGU (2012) Natural Gas Conversion Pocketbook. Figures exclude gas capacity fur incoming lines designed solely to transit gas elsewhere, such as Turkey. Source: ENTSOG (2013) risk. Simply stated, EU pipeline politics is more about who delivers how much at which price, rather than the urgent need to get more. Europe's pipeline infrastructure is characterized by the geographic location of the reserves to which it connects. These include the North Sea gas and oil fields, various Russian fields, Caspian and Central Asian fields, and the reserves of North Africa and the Middle East. The resources in these regions are accessed via three large corridors. One that runs southward from the Norwegian and North Seas to the UK, Scandinavia, and the continent. A second o ft. O 3 •j- E u •£. * 1 Ort 3 O-t-i tal To '■V