The Baltic Times
March 19, 2008
Looking at the Baltic energy policy the only thing which is clear is that nothing is clear. Some years ago common energy projects like the new Ignalina power plant looked to become examples of Baltic cooperation, now Baltic countries are moving in more and more different directions. The Ignalina project is still there, but progress there has been so painfully slow and an outcome so unclear that both Latvian and Estonian governments have started looking for alternatives. Estonia is discussing an option to build its own nuclear power plant, Latvia is planning to build two new power plants – one of them based on Russian gas and the other on Russian coal.
Dependence on Russian gas and lack of necessary interconnections in the European direction requires a greater unity between us than we have had up to now. We are under strong political pressure. By playing on the interests of various circles in different Baltic states, it is regrettably quite easy for Russia to divide us. We should also not forget that the Eastern side may soon start experiencing difficulties with supplies, as the necessary investments into new gas fields and infrastructure have not been made.
It’s the same with electricity. It looks at the moment quite tempting to overcome European climate directives buying cheap electricity from Russia. We can of course ask can we really save the planet, but even more practical is to ask how long can Russia provide such cheap energy to Baltic markets. Russian energy systems are under higher and higher tensions. There are doubts can they really provide the necessary electricity even for Russia’s own growing needs.
What must we then do? First – we must be really serious about cooperation. The Baltic countries need a common energy policy and Baltic leaders must deliver it. This demands clear political will. A common energy policy must become a top priority in Baltic cooperation, if we can not achieve real results there, we all will be in trouble. At the same time we can also concentrate on some concrete projects, which are necessary for all three Baltic countries, whatever solution for our energy needs we select. First of them are electricity grids – we need direct connections with Europe – via Finland, via Sweden and via Poland, and the best way to achieve this is to cooperate.
Another important topic is the energy charter. The Baltic states need to upgrade their cooperation to draw their European partners’ attention to the fact that the European Union should not be abandoning the Energy Charter Treaty which represents EU values, free markets and the rule of law. More specifically, this means making the European-Russian cooperation dependent on the ratification of the Energy Charter by Russia. By signing the Energy Charter, Russia of her own free will agreed to its conditions and requirements. Therefore, she must now keep the legal commitments she has undertaken. Pursuant to Energy Charter article 45(1), Russia is legally bound even if the treaty has not yet been ratified by her.
In case of possible cut-offs of gas supplies or threats of that kind, it provides a functioning mechanism of dispute settlement, which will be helpful in cases like Druzhba in Lithuania, for instance. The energy charter is also a better opportunity than NordStream for timely and well priced supply of gas into Europe. When it comes to the Baltic states, it reduces their dependency on Russia. The energy charter also supports open energy markets, which in turn can be used to ease the hold the Gazprom monopoly has both in Russia and Europe. Energy relations in the Eastern direction currently lack rules and norms. Therefore, the EU must in no way back off from the Charter’s requirements nor water them down. It is in the best interests of the Baltic states themselves to take coordinated action in this field and to make joint comments.
Mart Laar, a historian and statesman, served as Prime Minister of Estonia from 1992 – 1994, and from 1999 – 2002. He is currently chairman of the Union of Pro Patria and Res Publica Party (IRL). He wrote this article for The Baltic Times.