The European Commission doesn’t rule out that already this year the Energy Charter Treaty can be amended with Russia’s wishes taken into account. The head of the European Commission representation in the capital of the Russian Federation, Fernando Valenzuela, made a statement to this effect last week in Moscow, reports Interfax.
“In 2010, the Energy Charter Treaty, the way it works, should be reviewed. Amendments reflecting the interests of the parties may be introduced,” he said at a press conference, pointing out that the Energy Charter Treaty is the best foundation to discuss questions connected with the energy sector. “It’s natural that we would like to see Russia as an active participant of this agreement,” added Valenzuela.
Let us remember that in August 2009, Russia refused to ratify the version of the Treaty adopted in the 1990s, which was intended to facilitate a “climate supporting mutual dependence in the energy sector, based on trust between the countries.” The Russians consider the Treaty a threat to their interests, since it limits opportunities for Russian companies to penetrate into the European market, provided that this penetration threatens the energy security of the EU members.
A bit earlier, in April 2009, Russia suggested an alternative to the Energy Charter Treaty. As The Day reported then, this document presupposed expanding the list of energy resources: not only oil and gas, but also nuclear fuel, electric energy, and coal. Russia also suggested expanding the list of countries and including the world principal energy players, including the USA, Canada, China, India, and Norway.
The rules of solving conflict situations and additional responsibility of transit countries were an especially important item in the new document for Russia. In the transit agreement Russia suggested a detailed prescription of the conflict resolution procedure. “In the current Treaty there is no efficient mechanism of sanctions capable of making any country think twice before stopping the transit of Russian gas,” said the vice-speaker of Russian parliament Valery Yazev at the time, obviously implying the Ukrainian-Russian gas conflict.
However, as the Russian press singled out, experts expressed doubts regarding the prospects of adopting the Russian version of the Energy Charter Treaty. Their Ukrainian colleagues supported this opinion. “Russia and the EU have different viewpoints, different understanding of this problem: the European Union considers the legal framework from the viewpoint of protecting consumer interests, while Russia, from the viewpoint of the countries exporting energy resources. And it seems to me that after the scandal in January, the EU won’t reach a consensus with Russia. Although support for some countries is possible,” Volodymyr Omelchenko, an energy expert with the Razumkov Ukrainian Center for Economic and Political Research, pointed out in an interview given to The Day.
Moreover, Russians were not saying the truth when they claimed that the current Treaty does not presuppose responsibility for transporters, noted Omelchenko. “The current version of the Treaty says that transit countries are forbidden to abuse their status. But it’s clear that Russia, as an energy resource exporter, is not interested in transit countries capable of asserting their rights.”
At the time, in April 2009, Ukrainian experts were pleased by Russia’s interest in the Energy Charter Treaty. They noted that it was in Ukraine’s interests. “It is necessary that Russia should finally join the Energy Charter Treaty. Until then the rights of Ukraine as a transit state will not be ensured,” said Omelchenko.
Should the same strategy be supported now as well? What positive and negative impact on Ukraine can the amendment to the Energy Charter Treaty have with regard to Russia’s wishes? Finally, are any changes to the Treaty advantageous for Ukraine? The Day has asked its experts to answer these questions.
COMMENTARY
Ivan DIYAK, advisor to the head of the National Joint-Stock Company Naftohaz Ukrainy:
“Certainly, it’s not very profitable for Ukraine. I suppose the Energy Charter Treaty is good enough even now. So we shouldn’t allow Russia to lead us by the nose – let them sign the current Treaty. Regarding the Russians’ requirements, for example, the transporters’ responsibility, this is one more ‘stranglehold’ on Ukraine. Moreover, Russia doesn’t want to allow anybody to approach its market. That is why Russia didn’t ratify the existing charter. Roughly speaking, Russia plays the fool, offering additional conditions to everyone, while sticking to its interests. In addition, there can be a situation when the Energy Charter Treaty is finally changed and signed by Russia, but its parliament won’t ratify it. Russia is temporizing. Isn’t it strange that the largest gas supplier doesn’t sign the Energy Charter Treaty? All this is being done to preserve the Russian monopoly.”
Bohdan SOKOLOVSKY, energy security representative of the president of Ukraine:
“Russia repeatedly claimed its readiness to negotiate a revision of the normative and legal framework for Europe’s energy security in the context of the Energy Charter Treaty. At present, I can’t predict whether this claim will be fulfilled and whether the mentioned amendments indeed will be introduced.
“But it would be good if Russia made a compromise and amendments would be made to the Energy Charter Treaty to satisfy the interests of all European states. However, negotiations of this kind have been in progress for too long, and it is difficult to speak about any positive forecasts.
“Ukraine is a party to the Energy Charter Treaty. For us these international energy rules are a part of our legislation. The Energy Charter Treaty is an absolutely civilized form of cooperation in the sphere of energy security. It is clear that if Russia became a party to the Energy Charter Treaty, too, i.e., ratified these rules in its country, this would bring positive things to everyone: Ukraine, the Russian Federation itself, and other parties.”
Valerii BOROVYK, head of executive board, the Alliance “New Energy of Ukraine”:
“It depends on the changes. If Russians change major items on free access to sources of transportation, internal and external networks, items on free competition, etc., this can influence Ukraine. But will we be able in this situation to influence the decision to amend the Treaty? As of today, I think the answer is no – because Ukraine has joined the Energy Charter Treaty just recently. However, on the other hand, will the European community introduce these changes? There has been only a statement to say they may be introduced.
“Can Ukraine negotiate with Russia alone on some provisions? I guess not in the present political condition. Now there is nobody in Ukraine to talk about it with Russia.”
Oleksandr TODIICHUK, president of Kyiv International Energy Q-Club, lecturer at International Management Institute (Kyiv):
“If a compromise is reached, amendments to the Energy Charter Treaty will mean meeting Russia halfway. The Russian Federation calls itself a natural monopolist in supplying gas and oil. And from the viewpoint of a monopolist they require a softer position on the part of the European Energy Charter Treaty. However, at the same time, the Russian Federation, in case of certain changes, will have to acknowledge free access to the pipeline and other provisions of the charter, which will become beneficial for all participants, including Ukraine. For us free access to the pipeline is the most important thing. Because today we can make gas supply contracts with Turkmenistan, Uzbekistan, but we cannot get access to the Russian pipeline. This was actually one of the harshest conditions set forth by the Russian Federation in order to keep its monopolist positions.”
