Christopher Pincher is a member of the Energy and Climate Change Select Committee and the Member of Parliament for Tamworth.
Energy policy, once the Cinderella of any election manifesto, has now moved to centre stage of British and European diplomacy. Unfortunately, the reason for this transformation is no fairy tale – Vladimir Putin is no fairy godmother. Certainly that was something Ukraine’s presidential contender Petro Poroshenko and his new supporter Vitali Klitschko where at pains to point out when they met MPs at Westminster this week.
The crisis precipitated by the second Ukrainian revolution, and exploited adroitly (some say) by the Russian leader, has laid bare the imbalance in Europe’s power supplies, particularly those of Eastern Europe which is heavily reliant on Gazprom for the raw material to fuel its power stations. Even Germany, supposedly the green giant of continental energy consumption, gets 40 per cent of its gas from Russia. Putin is not blind to the cards this deals him when playing poker with the international powers for the Crimea. Russian petro-dollars have not only paid for the refit of its military machine, including the Black Sea fleet anchored at Odessa, but also act as the provisional wing of its foreign policy.
So Europe must diversify its energy supply to beat the hand held by Russia. That urgent necessity is not something Britain can ignore. Although we may not be directly supplied by Putin’s gas (73 per cent of our supplies come from Norway) our European markets most certainly are reliant on Russian gas and so it is in our interest that those markets are not held to ransom. The Prime Minister is absolutely right therefore to seek the widest agreement for a rapid expansion of the energy supply into Europe. And he is right too to identify the South Caucuses as an important area of gas and oil provision. Crucially, the supply routes and infrastructure already exist (and has recently been expanded) to ship gas across Anatolia and into southern Europe. That means it will be easier and quicker to increase supply from these sources than from many other places. And given the Shah Dinez gas field in Azerbaijan (an operation led by our own BP) is the second largest in the world, there is no shortage of supply.
The increased infrastructure carrying Trans-Adriatic Pipeline (TAP) gas from the Trans-Anatolian Pipeline (TANAP) onwards from Italy into Europe, and the development of a further “Nabucco West” line to carry gas across Turkey through Bulgaria, Romania and Hungary to Austria’s Central European gas hub are just two initiatives we can take to reduce the dominance of Russia.
Importantly, Azerbaijan is willing and able to organise and fund such pipeline networks channelling oil and gas to Western Europe without going through Russia. The Baku–Tbilisi–Ceyhan oil pipeline (BTC), which opened in July 2006, exports oil from Azerbaijan, and up to 600,000 barrels a day from Kazakhstan, along a one thousand mile route from Baku to the Turkish Mediterranean port of Ceyhan and onto Europe. The Baku–Tbilisi–Erzurum pipeline (BTE) transports natural gas from the Shah Deniz gas field in the Caspian Sea to Turkey.
As resources from the Shah Deniz II field come on stream, there will be enough gas to be pumped onwards to other European destinations. Together this network of pipelines forms the Southern Corridor which the European Union has been so anxious to build. That anxiety must now be galvanised into action. In time, gas from other countries in the Caspian Sea basin – and even from Kurdistan in Northern Iraq – could be pumped via Azerbaijan to the West. Indeed, in addition to being a producer, Azerbaijan looks set to become the leading transit hub for gas from across Central Asia.
Other sources of energy can, of course, play a part in this diversification strategy. Notably the expansion of sensible renewables across the continent (Germany has made a major error in deciding to switch off its nuclear stations) and shale gas, if properly exploited, will be part of the mix. But most people, from climate sceptics to the most enthusiastic greeners, accept that gas has a major role to play at least to the medium term in delivering our energy needs. That is why we must diversify our gas sources without simply relying on Glencor to tanker LNG to European port terminals. And that must mean embracing and escalating the southern corridor pipeline development. Britain and the EU should work much more closely with South Caucuses providers to realise this plan. And Britain specifically must continue to champion the role of BP in the Caspian basin. We cannot effectively support the Ukraine and oppose Russian weltpolitik without first evening up the stakes in realpolitik. Quite literally, we need the energy to do it.