The Polish trace in the nascent Energy Community 

Member coutnries of EC
Member coutnries and candidates of Energy Community

13.06.2014 – Faced with the increasing risk of disruption of gas deliveries through Ukraine, new energy branches of the Energy Community are being created, and there is a Polish part in them.

A high-profile group of the Energy Community (EC) under the leadership of the former Prime Minister of Poland, Jerzy Buzek, published a report yesterday, titled “The Energy Community of the future,” in which it demands a revision of the Treaty about the EC. Besides the fact that the Group sees itself as something similar to the European Commission of the energy sector, to which the member countries will willingly delegate qualifications of decisions in the sector, in the document there are notations that are in line with the Polish demands for the creation of a platform for emergency gas purchases.

 Read also: What is left of the Energy Union in the European Commission’s strategy?

The report mentions “the institution that aggregates the demand for the import of raw materials, especially gas.” It is most likely about the market in which the merchants in the weaker negotiation positions will be able to have improved conditions. Securing the fairness of contracts would initially be a group of ad hoc judges and ultimately a new Court, which would resemble the European Court of Justice. Investigative and executive power would be held by the EC’s Secretariat, an extra- European plane of the European Energy Community designed by Jacques Delors and Jerzy Buzek.

These demands are convergent with specific aspects of the Energy Union, which is being pushed forward by Warsaw. Poles demand a transparency of gas contracts and the EU’s supervision in setting and banning clauses in these deals. Aggregation of the need of protecting the weaker players is commonly called “the joint purchase of gas.” The document of Buzek’s group is yet another, after the Energy Strategy of the European Commission, official record, which includes this concept.

From the Polish point of view, it is supposed to resemble Euratom. Similarly to Buzek, who pushes for establishing an “energy” European Commission (his group) and ETS (the EC’s Secretariat?), the Polish government wants to move selected solutions of the Euratom Supply Agency (ESA) to the energy sector. ESA has the sole right to approve contracts in Euratom. It will not agree upon deals, which are incompatible with the Treaty about Euratom. In case of doubts, it can demand the change of records. Poles are pushing for the establishment of the gas ESA, which the countries would notify about every gas contract, its terms and validity period. The gas agency would block the notations that are harmful for clients, such as the infamous take or pay, prohibition of re-exportation, and other clauses, which currently remain secret and are Gazprom’s means of manipulating the countries of Central and Eastern Europe. These sorts of Union’s interventions sometimes have beneficial results, what became clear during the 2010 negotiations with Gazprom, when the EC had to defend the Polish interests.

Poles are also lobbying for the establishment of the market’s regional concentration threshold, which would protect it from a single supplier’s domination. A similar solution functions in Euratom and protects the diversification of uranium suppliers. If such solution was implemented in, for example, our region, Gazprom wouldn’t be able to provide 100 percent of deliveries and would have to share the market with new suppliers, such as with Novatek and Rosienftem, which are promoted by Crimea, and, in the future, with Caspian suppliers and LNG.

The gas ESA would also publish the reports in which, similarly to her nuclear counterpart, it would describe the conditions of contracts, with the prices included, changes on the market, etc. and withhold the delicate data. Such information would allow for creating a real benchmark in gas negotiations. Currently, we don’t know the specific conditions of deals, and Russians could be using it to their advantage, for example, by arguing that gas in Russia is much cheaper than Norwegian one or the United States’ LNG in the future. Due to this benchmark, the required by our diplomats institution of forecasting prices and demands could create a crisis mechanism for the joint purchase of gas. This is the way to understand the Polish demands.

Buzek’s report elaborates on it more. As a part of the mechanism, the high-level Group of reflection is forecasting the establishment of the EC’s High Risk Instrument (ECREF), which would guarantee supplies, from the reserves of gas volumes of the companies and countries at better positions, for the ones, which are harmed by the possible shortage of deliveries. The countries of the Energy Community would organize joint purchases of gas in order to restore the missing volumes only in an emergency situation, not on a daily basis.

ECREF would also connect certain projects of common interest (PCI – strategic investments, such as the Trans Adriatic Pipeline) into investment chains, for which the financial aid would be coordinated. An example of such chain could be the web of interconnectors as a part of the South-North Corridor or the South Corridor, which consists of TAP, the Trans Anatolian Pipeline (TANAP), the South Caucasus Pipeline (SCP) and, in the future, the Trans Caspian Pipeline (TCP).

What is more, Buzek’s Group is declaring the lack of geographical barriers for broadening the European Community. Georgia is already a part of it. The Group is demanding the division into full and affiliated memberships. The affiliated countries – the Caspian suppliers of shale gas, such as Azerbaijan or Turkmenistan – would have the possibility of selective implementation of the EU’s energy acquis, accordingly with their interests. Due to this, they will enter a broader cooperation with the EC, but will keep their strategic advantages.

Read also: Gazprom is working on precluding Europe’s diversification plans

In the first quarter of next year, the roadmap, created by the European Commission and the European Community’s Secretariat, of the implementation of Group’s proposals is to be announced. In 2015, the European Council is to approve specific solutions. The demands mentioned above will require changes of the Treaty about the Energy Community. If the countries agree upon their implementation, the evolution of Buzek’s and Delors’ idea will advance, and, in the future, the EU will consist of another Community – a so-called Energy Union, which Europe needs considering the increasing problems with Russia.

Translation: Marlena Kister

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