The EU has at last taken the first steps to diversify its energy suppliers away from Russia, at least on paper. The European Commission announced its plans - which will be submitted to EU member states for approval - to boost energy diversification by creating six interconnecting energy infrastructures which are essentially large interlinked grids to carry electricity and gas that would spread power to each of the EU states including the areas of the Baltics, the Mediterranean region, and offshore in the North Sea. The most ambitious plan yet at a pan-euro level, the announcement will complement other plans to mitigate climate change and reduce overall energy consumption by 2020.

It is also a call for a unified external energy strategy when dealing with non-EU states, according to the European Voice, a Brussels based newspaper. The commission is calling on EU member states to move away from bi-lateral energy contracts with non-EU suppliers and to have all contracts categorized under an agreed “EU” status.

Diversification in Southern Europe will depend largely on the success of the currently unrealized Nabucco pipeline, backed by the US and EU, set to thread natural gas from Turkey to Austria via Bulgaria, Romania, and Hungary. Nabucco would bring gas from the Caspian to countries which are not under Russian control. However Russia has thrown its own pipeline vision, South Stream, into the mix-South Stream a Russian controlled pipeline that would end in Italy- to create jostling between EU states and to snuff out Nabucco.

On the periphery of the pipeline race is the Nord Stream pipeline, a joint venture between Berlin and Moscow, that is described by Stratfor, an online intelligence service, as a “geopolitical project” to send natural gas supplies to Europe while bypassing Poland and the Baltic states. Stratfor reports that this project is now at risk because Germany fears the backlash of political risks and Russia fears the rising costs for such a long undersea pipeline.

Interestingly, Europe may also have another option in the form of energy imports from Africa. According to the International Energy Agency, Africa is set to triple its gas exports to Europe by 2030.

From the Guardian (UK) (Feb 23, 2008):

The Bush administration yesterday urged the EU to stop dithering over the building of a $6bn (£3bn) gas pipeline from the Caspian basin to central Europe and reduce its growing dependence on Russia’s Gazprom.

“Follow your wallet,” Matthew Bryza, US deputy assistant secretary of state, said, arguing that the troubled Nabucco project made sound commercial sense and would cut Europe’s dependence on Gazprom by up to a quarter.

Bryza’s outspoken comments came after talks with senior EU officials, including energy commissioner Andris Piebalgs, and took sideswipes at the “gigantic rents” [excessive prices] Gazprom is charging Europe for gas. They underline the growing geo-political importance of gas.

“Helping Europe diversify its gas supplies has become extremely urgent,” said Bryza, adding that US backing for Nabucco was in the country’s national interests even though no American companies are involved….

“We want to help Gazprom to move from a monopoly towards more market-based behaviour,” he said. “We want it to be reliable and produce more gas at home in a more competitive domestic market rather than buying up as much infrastructure here in Europe or the cheapest possible gas it can find in Central Asia.”

Related Article: U.S. official says Europe needs alternatives to Russian natural gas, Associated Press, 22 February 2008.