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Summary of Week 5

During the Cold War period, Soviet natural gas supply to Western Europe was stable even as US-Soviet tensions were high.

In the 1990s-2000s, the European Commission pushed for the liberalization of gas market and electricity markets through three stages. The year 2009 was a turning point after which Russia’s unfair gas prices and other contractual characters such as long-term contracts, Take-or Pay, and destination clauses began to weaken with the deepening of US shale gas revolution.

It is unlikely that EU member states will soon converge politically on a truly shared gas vision and integrated gas market in Europe.

Russia’s strategic partners and client countries in Europe have an interest in resisting gas market integration. A case in point is the recent signing of Nordstream 2 between Russia and Germany. From Russia’s standpoint, the issue of energy security in EU–Russia energy relations is overwhelmingly oriented towards security of supply.

There is a distinct lack of a conception of energy security as security of exports and demand. Gazprom might consider a strategy to flood Europe with cheap gas in 2016 to kill off US LNG. Gazprom can produce and export gas to Europe at a much lower cost than LNG from across the Atlantic, and this approach would mirror Saudi Arabia’s strategy of keeping oil production elevated in order to protect market share.

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Global Resource Politics: the Past, Present and Future of Oil, Gas and Shale

Hanyang University