Modern threats and prerequisites of formation the concept of energy security of eu countries

The concept of energy security of any country or the region in many cases is defined by those threats of energy security that any country or the region faces up largely.

The existing classifications of energy security threats (energy risks) in scientific literature and the state documents divide the energy risks on such factors as that can be the reason of energy resources deficiency as a primary one andthe consequences of taken place theenergy delivery failures as the secondary ones. Therefore, for example, the risks of physical or technical character can be the primary reason of energy carriers’ deficiency and further the arising economic, social and ecological threats of the whole energy security are rather the consequence of deliveries failure in any cases. Special value on division into primary and secondary reasonsof energy risks in practice for their prioritization is essential when forming energy strategy of the state. 

The prerequisites of formation the European Union’s concept of energy security and the related increase of the energy security importance when forming energy strategy of EU countries in the market of gas at the beginning of the 2000s in many respects were defined by growth of the largest suppliers’ share in supply of gas to the EU  market, and also an entrance of the Russian company“Gazprom” to the capital investment of the gas transmission and distributive companies in Europe in 1990-2000.

If in 1990s, the share of deliveries of three largest export countries of gas in the EU market (Russia, Norway and Algeria) made about 49% of gas consumption by the European Union countries, gradually by the middle of the 2000s this indicator increased to 55% [1].

Thus, for these three mentioned above countries is indicated more than 80% of gas import to the EU, including for Russian sharemore than 40% were sharing to the end of the considered period of time [2].

The Russian company “Gazprom”with the purpose for increasing the volumes of gas supply, ensuring its stability and entry into the market of the European consumers since the beginning of the 1990s, sought to receive control over gas transmission and distributive assets in European continent largely. The first joint venture for gas supply to Germany market was created in 1993 in cooperation with the German company “Wintershall” (sister- company of the German“BASF”) and named as“Wingas” where “Gazprom” got 35% of its share. By 2000s, the company owned a wide network of the main pipelines in Germanyand one of the largest underground  gas storages. Consequently, the “Wintershall” and “Gazprom” founded one more joint venture namedas  “WIEH” where the shares consisted of 50% respectively each one.

“Gazprom”has expanded its presence in other markets of EU countries too. By the middle of the 1990s, the  company got the shares in a number of joint ventures with the European companies: for example, in France “Fragaz” (50% - “Gazprom” and 50% of “Gaz de France”), in Finland “GasumOy” (25% - “Gazprom” and 75% of “Neste”), in Italy “Volta” (49% - “Gazprom” and 51% of “Edison”) and “Promgaz” (50% - “Gazprom” and 50% of “SNAM”) etc.

In 1995, the Russian company also got the 10% of the “Interconnector” international consortium where it had to lay the pipeline fromGreat Britain to continental Europe on a bottom of the North Sea.

In the 2000s, “Gazprom” has continued to realize the strategy of its entry into the market of gas in Europe that has been promoted in many respects by process of liberalization of European gas industry. In 2006, the agreement on strategic partnership was  signed with the Italian company “ENI” that granted for the Russian company the right to carry out direct sales to Italian consumers around 3 billion cubic meters a year. Besides of that, it was succeeded to reach agreements in Austria on acquisition of 50% share of the “Central European Gas Hub Company” that was the operator of large gas-distributing knot inthe Austrian Baumgarten.

At the same time, such activity of the Russian gas exporter has faced the increasing vigilance of EU countries from the point of view of regional energy security threats and the related growing resistance from the  governments and regulators of these countries. At the beginning of the 2000s, the “Gazprom” could not get a number of assets in Germany, Romania and Hungary. In 2006, the government of Great Britain blocked the planned transaction on acquisition by “Gazprom” of the “Centrica Company” occupying about 20% share of the market in retails of gas in the country [3].

The European commission issued the document named as “Towards an European strategy for the security of energy supply” in 2000 that laid the foundation of ensuring energy security strategy of the EU at that time and for the future perspective. The essence of the energy security concept in framework of this document is given in the section 1.1. that reveals the formation of system the energy security threats of EU in detail [4]:

•  physical  threats,  namely as  exhaustion  of energy resources,  failures  of deliveries  in  a view  of accidents or strikes, geopolitical crises or natural cataclysms,
•  economic threats, i.e. the negative consequences for national economies because of the prices of energy resources instability,
•  social threats, as namely consequences of social character because of price increase or lack of energy resources supply,
• ecological threats, resulting from production, production or consumption of energy resources and the electric power (techno-genic accidents, emissions of the polluting substances in the atmosphere).

The authors of the monograph “EU Energy Security in the XXI Century” [5] offer the system of energy security threats applicable for the European Union countries and the expressing relationship of cause and effect  for various types of energy risks of the import country and energy resources wherethe primary threats of energy security are the reasons of secondary and tertiary risks of energy supply system by and large.

In framework of primary risks,it is allocated into two subgroups that in turn share the various types of risk factors:

• social and economic threats resulting from the organization different types of person’s activity, economic, political and social:
• economic factors having direct or indirect influence on country’s energy including economic growth and growth of the population, share of monetary incomes/expenses from export/import the energy resources and the electric power in the total export/import income/expenses of the country as a whole, trade relations and the level of competition for energy resources with energy resources consuming countries;
• geological production factors, namely it estimates of internal stocks in absolute and relative values (the relation of stocks to production) and reliability of these estimates;

• political factors, namely external (international military operations), internal (civil war, revolution), terrorism, violation of rights and person’s freedoms, membership in international organizations (for example, OPEC), international political alliances etc.;
• social factors connected with living conditions, social well-being and justice, and also cultural values;
•  technical threats include the risk factors having influence on normal functioning of energy producingobjects and infrastructure namely are:
• natural cataclysms,
• accidents taking place because of the personnel or as a result of the equipment’s faulty works,
• intended destructions resulting from the social including labor, or political

Being a consequence of the events resulting from the emergence primary threats of energy security, the group of secondary risks includes:

•  risk of the termination of energy resources supply,
•  risk of health harm infliction of the person and private property,
•  risk of harming environment.

The group of tertiary threats of energy security includes instability of the prices and vulnerability of an energy system and partly a consequence of secondary risks emergence. So, for example, actual or even the potential termination of energy resources supply to the country can significantly raise the prices of it that can affect eventually considerable social and economic well-being in the country by and large. The vulnerability of energy production in frameworkof this classification of threats system of energy security is considered not as a risk of it or that level it is rather as direct element of any social and economic system defining the extent of influence of  secondary risks.

It should be noted that at the current stage of world energy system development– theincreasing value for  regional and global energy security in general gets geopolitical, but not geological factor in a view ofpolitical and social instability in many key regions-suppliers and transitory states of energy resources: the countries of Middle East, North Africa, and also Ukraine.

The threats of energy security at the level of the country or the region in many respects depend on the created energy system, the existing tendencies of its transformation, prevalence of it or that type of the fuel used for energy power generation in transport and industry. These factors of influence in many respects define the created system of energy resources supply, the size of operational expenses, possible depth external influences.

The carried out analysis of prerequisites the formation of the energy security concept of EU countries allowed to create the following understanding of energy security threatsin the European Union, forming the  modern  energy security concept of the region:

•  high level of import dependence in oil and gas industries. The level of dependence in oil is made by about 87%, in gas - 66% [6]. According to European Commission Forecast [7], these indicators will grow, but the main vigilance is connected mainly with complex political situation in key supplying countries and transitory countries of energy resources;
•  active actions of foreign suppliers in some types energy resources on an entry into the markets of European consumers;
•  high level of the competition for energy resources to the fast-growing countries, mainly India and China;
•  high prices of energy resources with positive dynamics of growth;
•  political instability in a number of supplying countries and transitory countries ofenergy resources;
•  complexity of the environmental issues solution in framework of the region and achievements of the related purposes in crisis conditions.

1. Eurostat Statistics Database [Electronic resource] / Eurostat – European Commission. – –Mode of access: http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/themes
2. EU Energy in Figures – Statistical Pocketbook 2014 [Electronic resource] / European Commission. – Brussels, – P. 26. – Mode of access: http://ec.europa.eu/energy/publications/doc/2014_pocketbook.pdf
3. Пусенкова Н.Н. Российский «Газпром» в газпромовской России [Электронный ресурс] // История новой России – – Режим доступа: http://www.ru-90.ru/node/1320#_ftnref40
4. Towards a European strategy for the security of energy supply: Commission Green Paper of 29 November 2000 COM(2000) 769 [Electronic resource] / eu. – 2000. – P. 64 – 65. - Mode of access: http://europa.eu/legislation_summaries/energy/external_dimension_enlargement/l27037_en.htm
5. Energy Security for the EU in the 21st Markets, geopolitics and corridors / J.M. Marin-Quemada,
6. Garcia-Verdugo, Escribano (eds.). – Abingdon, Oxon: Routledge, 2012. – P. 120-123.
7. EU Energy in Figures – Statistical Pocketbook 2014 [Electronic resource] / European Commission. – Brussels, – P. 26. – Mode of access: http://ec.europa.eu/energy/publications/doc/2014_pocketbook.pdf
8. EU energy trends to 2030 [Electronic resource] / European Commission,  Directorate-General for Luxembourg, - P. 31. - Mode of  access: http://ec.europa.eu/energy/observatory/trends_2030/doc/trends_to_2030_update_2009.pdf