Republic of Bulgaria Ministry of Foreign Aairs N DOCENDO DIPLOMATIC DISCIMUS INSTITUTE Е Energy Diplomacy W S FOREIGN AFFAIRS RESEARCH PAPERS May 2016 8 Contents Introduction: Energy Diplomacy and the Challenging Dynamics of the Global Energy Security Dr. Lachezar Matev .......................................................................................................................2 Governing the differences in the European Energy Union: EU, regional and na- tional energy policies Jacques de Jong, Thomas Pellerin-Carlin, Jean-Arnold Vinois ........................................ 13 The Energy Union and natural gas industry going into the heart of the Balkans Pavlin Stoyanoff .......................................................................................................................... 41 On the European Energy Security in the context of the refugees’ crisis Slavcho Neykov ........................................................................................................................... 54 Where Does the EU Stand Today in Meeting its Members Energy Supply Security? Prof. Nurşin Ateşoğlu Güney .................................................................................................... 65 Opportunities for Bulgaria according to the Energy Union strategy Atanas Georgiev ......................................................................................................................... 75 Along the Energy Streams: Geostrategic Competition in South East Europe Martin Vladimirov ...................................................................................................................... 84 Challenges facing Gazprom and the Russian natural gas policy Dr. Yanko Yanakiev ..................................................................................................................... 97 The Future of Energy: Predictions and Challenges H.E. Ali Asghar Soltanieh ........................................................................................................109 Introduction: Energy Diplomacy and the Challenging Dynamics ... Introduction: Energy Diplomacy and the Challenging Dynamics of the Global Energy Security Dr. Lachezar Matev The launch of this new edition of the Foreign Affairs Research Papers is a persuasive example of the Diplomatic Institute’s (DI) strong commitment to topical problems like energy security and energy diplomacy. It is once again an evidence of Institute’s consistent approach to the examination of fundamental foreign policy issues of particular significance drawing in leading national and international expertise to all forms of their activity. More than 5 years of unswerving work and several publications on the topic, in which policy to tackle climate change, sustainable energy policy and energy diplomacy has been in the focus of the DI thematic and organisational work, leave no doubt that the subject remains one of the key priorities in its activity. The launch of this paper presents a good opportunity to commend the team for its relentless work, perseverance, innovation, and perspective-thinking in this sphere. More importantly, the DI has already managed to propel this topic and to bring it to the forefront of attention in their collaboration with the administration, businesses and academia both in Bulgaria and abroad, taking the issue to the core of their common agenda. 2015 marked a significant expansion in the scope, geography and forms of their cooperation and organised events. In particular it is worth mentioning the ambition to raise the awareness of the energy security agenda and the importance of energy diplomacy, as well as the political and expert levels of ongoing events with such a focus. Among them are several international programmes, covering the countries from South Eastern Europe and Ukraine. Perhaps the culmination of this approach was the Conference on Energy Security and Energy infrastructure in SEE, organised in collaboration with the Energy Management Institute and attended by participants from more than 30 countries from Europe, Asia, Africa and South America1. The forum was addressed by, among others, the Vice President of the European Commission for the Energy Union Mr. Maroš Šefčovič, the Prime minister of Bulgaria Mr. Boyko Borisov, the President in office of the Energy Community and Minister of Energy and Industry of the Republic of Albania Mr. Damian Gjiknury, the Secretary General of the Regional Cooperation Council Mr. Goran Svilanović, , the Advisor to the Vice President of the Islamic Republic of Iran, EBRD, World Bank, Euroelectric, Eurogas, business representatives etc. There was a principle agreement resulting from the conference debate on the necessity of strengthening the strategic guidance on energy diplomacy and closer cooperation in the region reconciling interests of the individual players2. 1 http://conference-bg.com/, last accessed on 18.12.2015 2 Key messages from the conference, http://www.emi-bg.com/en/index.php?id=873,last accessed on 18.12.2015 2 Introduction: Energy Diplomacy and the Challenging Dynamics ... Some important factors defining the changing energy environment The dynamic changes in the global energy environment bring in serious geopolitical challenges to the agenda of all states, regional organisations, and entities worldwide. The energy domain is highly topical given the EU’s dedicated drive to establish an Energy Union and the emphasis on energy security in view of persisting global and regional dynamics and instability: the Syria war, the mounting refugee crisis, the asymmetric threats and terrorist attacks on energy infrastructure as a reminder of unrelenting geopolitical challenges. Likewise ongoing indiscriminate attacks and atrocities perpetrated by ISIL/Da'esh in Syria and Iraq and the expanding geography of its actions; the tensions in the larger Middle East; Ukraine and the continuing slump in oil prices and global oil oversupply all point to the importance of shaping a robust energy security policy. Adding to this the current volatile energy-pricing environment, Iran’s anticipated return to the energy markets after the July UNSC resolution3 on lifting of sanctions, the global concern for the development of feasible alternatives and the need to promote further carbon-free solutions give good reason for the continuing presence of energy security high on the agenda as key policy issue. The complexity of the energy security problems is undergoing dramatic changes corresponding to the political and economic processes on a global scale and to the risks management challenges. I have argued in previous publications4 for the evident need to broaden the energy security concept and to develop a wider vision, as well as for the policymakers to adopt a consistent strategic approach to this issue. It is notable to witness that many of these have found their incarnation in the global climate deal reached in December in Paris. As the largest source of greenhouse-gas (GHG) emissions, the energy sector must be at the heart of global action to tackle climate change. The COP215 deal is a unique historic peak of diplomacy, including energy diplomacy. The UNSG defined the new climate change agreement as a ”monumental triumph”6, as an agreement that demonstrates solidarity and “is ambitious, flexible, credible and durable.” The urgency of the risks and need for this brand new attitude and action, found its synthesized description in the US President’s address to the delegates: “We are the first generation to feel climate change and the last that can do something about it.” 7 It is a common understanding that the December COP21 Paris agreement8 sets a long-term vision for sustainable development while sending a strong message to businesses and policy-makers placing clean energy on an irreversible pathway 3 http://www.un.org/press/en/2015/sc11974.doc.htm, last accessed 18.12.2015 4 Matev,L. (2013) Energy Diplomacy, Foreign Affairs research papers 5, p.4-8 5 United Nations Framework Convention on Climate Change, Conference of the Parties 21,(also UN Climate Change Conference Paris 2015 ), http://www.un.org/sustainabledevelopment/cop21/ 6 http://www.un.org/sustainabledevelopment/blog/2015/12/un-chief-hails-new-climate-change- agreement-as-monumental-triumph/, last accessed 18.12.2015 7 COP21: Full speech by Barack Obama at the opening of UN Climate Conference in Paris, http://www. ibtimes.co.uk/cop21-full-speech-by-barack-obama-opening-un-climate-conference-paris-1531251, last accessed 18.12.2015 8 The agreement text, https://unfccc.int/resource/docs/2015/cop21/eng/l09.pdf 3 Introduction: Energy Diplomacy and the Challenging Dynamics ... and creating the framework for a global energy transition. The sustainable climate and energy policy of the EU and its leading role were a guiding force for many of the changes in the global energy framework. The European Union has played a key role in brokering the Paris historic agreement, where 195 countries, parties to UNCCC, adopted the first-ever universal, legally binding global climate deal9. The ambitious and balanced agreement, the first major multilateral deal of the 21st century, sets out a global action plan to put the world on track to avoid dangerous climate change by limiting global warming to well below 2°C. It is extremely important that the aspiration for a more ambitious goal has been kept in the agreement with the promise to endeavour to limit global temperatures increase to 1.5C. Very important for the success were the targets of the biggest polluters