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Securitatea Energetica.Qxp Iulian Chifu Adriana Sauliuc Bogdan Nedea ENERGY SECURITY STRATEGIES IN THE WIDER BLACK SEA REGION Editura Curtea Veche Bucureºti 2010 © Iulian Chifu, Adriana Sauliuc, Bogdan Nedea Editura Curtea Veche Descrierea CIP a Bibliotecii Naþionale a României Energy security strategies in the wider black sea region / coord: Iulian Chifu. - Bucureºti : Curtea Veche, 2010 ISBN 978-973-1983-45-5 I. Chifu, Iulian (coord.) 94(47) Tipãrit la „Curtea Veche“ Trading S.R.L. CUPRINS Energy security strategies in the Winder Black Sea Region. The most probable crisis. Foreword . 5 Part One: The fundaments of Energy Security at the geopolitical, regional and institutional level . 9 1. Energy Security and the Caucasus Knot . 9 2. NATO and Energy Security . 35 3. Energy Security and the EU . 47 Part two: Energy Security Strategies in the Wider Black Sea Region . 61 Energy Security Strategies in NATO’s countries . 61 1. Energy Security in Romania . 61 2. Energy Security in Bulgaria . 105 3.Energy Security in Turkey . 133 Energy Security in Europe’s East . 165 4. Energy Security in Republic of Moldova . 165 5. Energy Security in Ukraine . 191 6. Energy Security in Russian Federation . 239 Energy security in the Caucasus . 277 7. Energy Security in Georgia . 277 8. Energy Security in Armenia . 311 9. Energy Security in Azerbaijan . 353 ENERGY SECURITY STRATEGIES IN THE WIDER BLACK SEA REGION 5 Energy security strategies in the Wider Black Sea Region. The most probable crisis. Foreword Project on Energy Security Strategies This project aims to investigate, evaluate and compare the existing energy security strategies and equivalent documents at the level of the countries situated in the Wider Black Sea Area. It also looks into the capacity of those countries to face the four most probable crisis in the area linked to energy security, at what respect they do have the perception about those possible crisis, they’ve made the planning and prepare to cope with such crisis. The problem of energy security is in the forefront of the research and concerns of the states in the region and the approaches are debated inside the European Union and NATO. Two schools of addressing energy security are the basic ones, with several nuances in different states: one is referring to the alternative sources and alternative routes, of delivering the supplies of oil and gas, meaning the network of pipelines in the region, alternative projects and support for those projects. On the other hand, the second approach is considering the interdependence of the suppliers and consumers in both the upstream – with participations in the production of the consumers – and in the downstream - with equal participations in the distribution of the suppliers. In order to avoid this conflicting approach, the current study focuses on the existing Black Sea Region countries strategies, and we did try to look, in the cases of crisis with an impact, and look at what level the crisis could 6 Iulian CHIFU, Adriana SAULIUC, Bogdan NEDEA harm a country, meaning basically considering if the particular crisis affects the Economic Welfare, of has reach the moment of harming the Domestic Safety – urban services of utilities and day to day life of the citizens – or it is far more complicated and could harm the Security of the state - affecting its capacity to defend itself - or even the very existence of this particular state. Through this angle of approach, we want to convert the existing strategies – result of the perception of those states of the threats to their energy security – in this paradigm who sees the Primary Energy Security in Ensuring military and security functionality, the Secondary Security in supporting the Critical domestic services and the third one in maintaining the economic vitality. Our study wants to focus also on the sources and rational of the formulation of those policies, if they exist, than on the planning and feasibility of those strategies, on the correctness of the result to the perceived and designed problem for each country. This individual studies allows a comprehensive comparative study of those strategies. The final result will evaluate the capacity of facing four types of crisis noted in the form of general threats and challenges in the respective strategies: - short run catastrophic effects on disruption of supplies - disproportionate price effects - sustainable raised of the energy product prices for a long period of time and - reduced investment or the cut of the FDI-Foreign Direct Investment. Focusing on general defined approaches to energy security is a matter of evaluating the sustainability of the states from the region but we also look into the level of preparedness, realism in the strategies and capacity to react effectively to those problems. Methodology We did made the full study through an investigative approach using sociological methodologies. Basically we did use a full analysis on the documents of those countries, and we did use people on the ground to check ENERGY SECURITY STRATEGIES IN THE WIDER BLACK SEA REGION 7 on the functionality of those strategies, meaning their relevance as well as the way the provisions are applied by the nine countries from the Wider Black Sea Region in practice. Than, the second stage included interviews organized in every country by the local experts together with the experts of the Conflict Prevention and Early Warning Center Bucharest, in order to have first the real perception of those issues as well as to evaluate the capacities of all those countries to elaborate and apply those strategies. The third level of our program involved an international conference held in Bucharest, 8-9 of November, debating the main findings of the country reports by involving all the team and some eminent international experts in energy security and a large expert public. The result of this debates proved the viability of the research on those countries from the Wider Black Sea Region, gave added inputs and integrated the results in a regional approach, as well as in a common format, maintaining the particularities of each country. The last stage was reserved to the unified texts, editing and integrated the reports in the current book. The book is structured in two parts, the first dealing with the main findings and the whole study and the core issues as well as the way that institutions like NATO and the EU see energy security and are involved in those issues, an important fact since in the region we do have member countries and all the Wider Black Sea Region states have relations with both of the organizations. The second part is aimed at making the countries assessment, but we choose to do it also making the insertions at a sub-regional level, in the Caucasian Region, NATO countries and the Region of the New Europe’s East. The main findings of the book are underlining the vulnerabilities of all the nine state, at different stages, to the most probable four crisis, their interdependence and the relevance of the Caucasian Knot that is proving the real major role that Georgia holds on the Wider Black Sea Region relations, balance and regional cohesion. It is also important that this balance could be brake if there will be no external actors – the EU, NATO, the US – being also involved in the region and bearing important interests in the region. 8 Iulian CHIFU, Adriana SAULIUC, Bogdan NEDEA The equilibrium, stability and sustainable security of the region, in both energy security and hard traditional security means, could not be ensure if Georgia as an actor would not be in place, the Southern Corridor maintained for transporting energy resources from the Caspian Region and External actors being maintained interested and involved in the region. For the current books worked some dozen people, the most important contributors assuming the different chapters. The integrative effort involved first and foremost the team of three coordinators, editors and co-authors that I had the privileged to lead. We also had the support of an English language editor for our book. Let me thank all those contributors, the Conflict Prevention and Early Warning Team as well as the Black Sea Trust of the German Marshall Found that supported this huge and extensive work, hoping that the result could support a clear involvement of the EU and NATO in supporting the energy security of those countries since the security of the countries from the Wider Black Sea Region is intertwined and interdependent with the security of the NATO and EU countries. Iulian Chifu Director CPCEW ENERGY SECURITY STRATEGIES IN THE WIDER BLACK SEA REGION 9 Part One THE FUNDAMENTS OF ENERGY SECURITY AT THE GEOPOLITICAL, REGIONAL AND INSTITUTIONAL LEVEL 1. ENERGY SECURITY AND THE CAUCASUS KNOT Iulian Chifu Energy Security in the Wider Black Sea Region is defined according to the two main schools of thinking that exist at the international level: the first approach is about alternative routes and alternative sources of supply – or alternative clients for those resources – and the second one involves the interdependence theory, concerning the capacity of involving in the upstream the distribution owner and the customer country and in the downstream the producer country. If the transit countries are also involved in the interdependence, a good energy security arrangement is likely, according to this school of thinking. In the region there are major producers – Russia, Azerbaijan, important transit countries – Georgia, Turkey, Romania, Bulgaria, Russia also and consumer countries – Georgia, Turkey, Armenia, Ukraine, Republic of Moldova, Bulgaria and Romania. Some countries do have energy security strategies, some have pieces of such strategies or elements of it in various laws, plans and strategies, some do not perceive at all energy security as a problem, so they have an uneven way of addressing this issue.
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