Transatlantic Politics

Guess what: these pretty windmills have no impact in reducing CO2 emissions. At least not in Europe, world leader against climate change.

This is what the German Green Party secretely acknowledges, in emails obtained by Spiegel Online.

Here is how it goes: the EU has set up this emission trading system. Heavy pollutors and energy companies can buy them. It’s supposed to be an incentive to switch to eco-friendly technologies.

But in fact, the actual amount of CO2 stays the same, no matter how many wind turbines the Europeans erect.

Not to mention the fact that in Germany, for instance - leading country in renewable energy technologies - the more companies make the switch to renewables, the cheaper CO2 certificates get. So in fact, the incentive is the other way around, giving energy companies a reason not to invest in such costly technologies with no impact.

It’s the economy, stupid!

That is exactly what happened in recent trading. A certificate to emit a ton of CO2 cost almost nothing. As a result, there was very little incentive for big energy companies to invest in climate friendly technologies.On the contrary. Germany was able to sell unused certificates across Europe — to coal companies in countries like Poland or Slovakia, for example. Thanks to Germany’s wind turbines, these companies were then able to emit more greenhouse gases than originally planned. Given the often lower efficiency of Eastern European power plants, this is anything but environmentally beneficial.

Indeed, when it comes to climage change, investments in wind and solar energy are not very efficient. Preventing one ton of CO2 emissions requires a relatively large amount of money. Other measures, especially building renovations, cost much less — and have the same effect.

"Do the Greens think that this problem (of climate change) will solve itself if we just screw solar panels onto our rooftops?" says one e-mail.

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Liberal politicians are the worst kind everywhere in the world. With parliamentary elections coming up on November 30, Romanian Liberal Party - currently in government - is flirting with the idea to get a lucrative deal with Gazprom and a quick gain, even if it means to sacrifice the country’s energy independance on the long run.

Liberal minister of economy and finances, Varujan Vosganian said on Thursday that Romania is open to South Stream, a Gasprom pipeline project designed to discourage European attempts to build a pipeline known as Nabucco, that would bring Caspian gas directly to the EU market via Turkey, thus bypassing Russia.

Romania has been the last country involved in Nabucco so far resisting Russian pressure to sign up for South Stream. Yet a Gazprom delegation is expected in Bucharest next week, amidst various media reports that the Russian monopoly is about to offer Romania to join its project.

While the Romanian president Traian Basescu still declares his backing for Nabucco and calls upon European leaders to speed up the process, the liberal government it is at odds with signals "openness" towards Gazprom, with the Ministry of foreign affairs mediating a meeting last week in Moscow between Romanian gas officials and the Russian monopoly.

Now, the economy minister’s wording suggest that gas politics might shape up the electoral debate in the run up to the elections.

The social-democratic opposition already called upon the Government to hold "direct talks" with Moscow in order to get a better gas price and dismissed the president’s "deep freeze" policy towards the Kremlin which was "disastrous" and only drew prices up.

Yet it is at least naive to think that direct talks with the Russian giant will put Romania in a better position. The debate is false, because unlike Hungary and Bulgaria, both Nabucco countries which signed up for South Stream as well because they are  over 85% dependent on Russian gas, Romania imports only a third of its total gas consumption from Gazprom, the rest being produced internally.

As Vladimir Socor from the Jamestown Foundation puts it, Romania is "only the latest addition to Gazprom’s list of candidate countries for the proposed South Stream."

The offer to Romania appears designed to increase Russia’s leverage vis-à-vis countries that have already signed up for South Stream and are now negotiating the commercial and financial terms separately with Gazprom. The Russians propose to include more countries in South Stream than the pipeline could possibly reach. By the same token, Russia offers to include more countries than it could possibly supply from Russian gas reserves in the years ahead.

Gazprom is tempting the maximum possible number of countries, playing them off against each other with the prospect of individual package deals around South Stream. Package deals would include supply contracts, transit revenue, and storage sites that could confer on this or that recipient country the coveted status of a gas-trading “hub.” Mostly aware of Gazprom’s limited gas export potential in the years ahead, the countries are vying to wrap up supply contracts ahead of their neighbors and to make the most out of any possible transit and storage opportunities.

For The Economist, all this works only because the European Union "is asleep on the job".

Bizarrely, Europe’s leaders publicly maintain that the two pipelines are not competitors. They have given the task of promoting Nabucco to a retired Dutch politician who has not visited the most important countries in the project recently (or in some cases even at all).

The main reason for the lack of private-sector interest is lack of gas. The big reserves are in Turkmenistan, but Russia wants them too. Securing them for Nabucco would mean a huge, concerted diplomatic push from the EU and from America. It would also require the building of a Transcaspian gas pipeline.

Yet as long as EU countries still give in to the temptation of bilateral deals with Russia, Nabucco, though twice cheaper than South Stream, has increasingly less chances to be completed.

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Following the Russian military invasion, Georgia might soon be left out from the vital energy corridor now trasiting its territory, if Azerbaidjan comes to terms with Armenia over the frozen conflict in the Azeri region of Nagorno-Karabakh.

According to  Iranian Ambassador to Baku, Naser Hamidi-Zare, Iran is willing to mediate between Armenia and Azerbaijan over Nagorno-Karabakh.

“Iran proposed to mediate between Azerbaijan and Armenia in the resolution of the conflict” Hamidi-Zare said, adding that Tehran has held discussion on this issue with both parties of the conflict.

Why the sudden interest in Tehran for this very old conflict? Apart from an obvious image gain if it were to succeed in the mediator role, Iran wants to counter the US influence in the region. Early plans of the now functional Baku-Tbilisi-Ceyhan oil pipeline took into consideration another route, through Azerbaijan and Armenia, right on the border with Iran (see map). But with the US sanctions over Iran and the frozen conflict right in the middle of the shortest route from Baku to Turkey,, Georgia was then seen as a safer alternative.

But following the brutal "unfreeze" of the 2 Georgian frozen conflicts in South Ossetia and Abkhazia, now recognized as independent republics by the Kremlin, Azerbaijan is already hesitant in committing fully its exports through Georgia, rerouting some of these through Russia. And if its conflict with Armenia was to be solved, guess where the shortest route for its large oil and gas supplies would be? Exactly. Through Armenia.

Another key player in this whole energy game is Turkey, so far at odds with Armenia over a historical event it won’t recognize - the genocide against Armenians during World War 1 and over the Nagorno-Karabakh conflict, Ankara being a strong supporter of Azerbaijan.

Diplomatic ties were broken off between Armenia and Turkey in 1993, as a sign of support for Azerbaijan. But in the aftermath of the Georgian conflict, Turkish President Abdullah Gul made a historic visit to Erevan, the pretext being a football game between the two countries. And during the UN plenary in New York on September 26, Turkish Foreign Minister Ali Babacan sat down with his Armenian and Azeri counterparts in an attempt to move forward the discussions, so far championed by US envoy to the region Matthew Bryza.

Armenian media hope that Turkey’s increasing distance from the US and closer ties to Russia could work in its favour over the frozen conflict, and could end-up rerouting future Caspian-EU energy links through its territory instead of Georgia. Turkey is favoring both Russian and Iranian gas to be transported by the planned Nabucco pipeline, which is to reduce Europe’s dependancy on Russian gas. The US has so far insisted that Azeri gas and possibly gas from Turkmenistan would suffice for the pipeline.

Yet the Georgian conflict sees regional powers such as Turkey and Iran regrouping and arguably reinforcing their positions on the energy front. Russia can only encourage this.

P.S. According to EUObserver, an alleged Armenian-Russian connection during the Georgian conflict was highlighted in the European Parliament by the chairman of the Foreign Affairs committe Jacek Saryusz-Wolski, who asked EU’s foreign policy chief Javier Solana in a public hearing on 10 September if Russian bases in Armenia were used to launch missiles at Georgia during the conflict. Mr Solana said he could not confirm the information.

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Wake up, Europe! 

Europe should care about the Russian invasion of Georgia if for no other reason than to protect its own interest in reducing energy dependency on Russia. Europe doesn’t care that Georgia is a NATO ally nor that it maintains the 3rd largest contingent in Iraq.  That’s well known (and sad). 

So at least be selfish, Europe!   Guard your vital oil and gas pipelines that cross through Georgian territory (and bypass Russia) which are endangered by the Russian bombings…or risk becoming even more beholden to the Russian Bear.

Ed Lucas, author of The New Cold War, writes in the The Times:

But on top of that is a vital Western interest. The biggest threat Russia poses to Europe is the Kremlin’s monopoly on energy export routes to the West from the former Soviet Union. The one breach in that is the oil and gas pipeline that leads from energy-rich Azerbaijan to Turkey, across Georgia. If Georgia falls, Europe’s hopes of energy independence from Russia fall too.

The Georgian Foreign Ministry reported that Russian aircrafts have completely destroyed the harbor of Poti, in the immediate vecinity of Supsa, a vital oil terminal.

Supsa is vital for Europe, especially since the Baku-Tbilisi-Ceyhan pipeline (the only alternative route to Russian-controlled oil and gas pipelines) has been disrupted on August 6 in Turkey by the Kurdish militia PKK. Since then, oil transports have been rerouted from Tbilisi to Supsa.

If Europe is serious about its efforts to reduce its energy dependency on Russia, it should better protect its only existing alternative pipelines which transit Georgia.

Update:

The Azeri oil company SOCAR announced it has halted exports from 2 Georgian ports - Batumi (close to Supsa) and Kulevi, a brand new oil terminal inaugurated in May and very close to Poti, the harbor leveled by Russian planes. Now SOCAR is considering rerouting all its oil exports via the Russian pipeline to Novorosiisk, although the capacity of this pipeline is about 10 times smaller than the Baku-Tbillisi-Ceyhan pipeline. So much for the oil exports to Europe, via Georgia and Turkey. Not to mention the grim perspectives for the gas exports that Europe was hoping to get from gas-rich Azerbaidjan and Turkmenistan via Georgia and Turkey.

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Bucharest, Romania:  The final fronteer.

It was the first NATO summit where the US failed to get what it publicly asked for - granting Ukraine and Georgia a next step in the NATO-accession process, the so-called "Membership Action Plan" or MAP.  MAP does not mean automatic NATO membership and can take 5-10 years to complete because the requirements laid out in MAP are dependent on the reformist drive of the respective governments. In the battle over whether to grant MAP to Ukraine & Georgia, French President Sarkozy, whom Bush qualified as "the last reincarnation of Elvis", suddenly switched sides and joined the opposition led by German chancellor Angela Merkel, who was against MAP from the very beginning.

After bitter quarrels at a working dinner hosted by the Romanian president Traian Basescu, the leaders of Old Europe prevailed. Bush and Brown got a measly compromise - a second chance in December, when NATO foreign ministers could decide to give MAP to the two former Soviet countries. But German Foreign Minister Frank Walter Steinmeier already qualified as "unconceivable" the prospects of changing his mind by December, when, in his view, there will only be a "first assessment". Followed by a second, third, etc. until Ukrainians and Georgians give up hope of ever joining NATO.

The real winner of the NATO summit in Bucharest was none other than Vladimir Putin. It was he who delivered the final speech on the last day of the summit, it was he whom Germany and France were thinking of as these two stalwarts of "Old Europe" fought to keep Georgia and Ukraine out of NATO. Self-confident and pleased that "our concerns were heard", Putin gave the audience at the Summit a condescending discourse which seemed as if the West was already at his disposal and he, the "Tsar of the Kremlin" didn’t feel the need to bully his loyal servants.  If the result of the NATO Summit are any indication, Putin was right.

During the closed-door NATO-Russia Council in Bucharest, Putin threatened the statehood of Ukraine in the event that it would become a NATO member.  Putin noted that "there are 17 millions Russians there" and that "Ukraine is a patchwork of territories from other states". But in the following press conference he refrained himself form directly attacking Ukraine or Georgia. The argument against NATO enlargement, in Putin’s public speech, was that "NATO is not a democratizer", but "a powerful military block whose appearance on our borders will be considered by Russia as a direct threat to our country’s security.

He also stressed that no threat - from terrorism to proliferation of WMD, from cyber attacks to energy - can be tackled without Russia. NATO was set up during the Cold War against an "evil empire" - the USSR - "but it remains to be seen who was right then", Putin said. That statement alone should set off alarm bells among military strategists and historians throughout the West. 

Putin also mentioned Iran and that, although Russia opposes a military nuclear program, it is "fully committed to honor its contractual obligations in terms of civilian technology and fuel for the civilian Iranian nuclear program".  No comment.

So what will be the future of NATO after Bucharest, after Russia got a veto right through its advocates in the NATO Alliance, especially Germany?

Hopefully Russia will make another mistake, the way it cut off gas to Ukraine in 2006 and let German consumers shiver. And hopefully we’ll have a strong leader in the White House next year. One who knows Russia from the Cold War and sees the new threat it has become. One who doesn’t look Putin or Medvedev in the eyes and thinks he has "seen into their soul", as George W. Bush famously stated after meeting with Putin. That would be the only hope for the transatlantic community. It cannot rely on a reincarnation of Elvis in France and a jello-like chancellor in Germany, too weak to break the will of her half-socialist, pro-Russian government. 

It is a sad indication of where the power truly lies in Europe when Bush and Sarkozy, both hawkish on foreign policy in general, are not able to secure the nomination of two former Soviet satellites to one of the most important military blocs in the world.  Perhaps, in the end, Putin smiles because he knows the truth:  Putin has also looked into the West’s eyes to see its soul and has found that the West is lacking both a soul and a backbone. 

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