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As the United States copes with the consequences of the BP Deepwater Horizon oil spill in the
Gulf of Mexico, it is time to reevaluate its energy security strategy for the future. Equally
relevant, however, is the energy security of its close Atlantic ally: the European Union. The
United States and the European Union have been economically and financially interlinked for
decades, together accounting for nearly 45% of global GDP.1 Since the gas disputes of 2006, the
European Union has taken steps toward creating a new and reliable energy security strategy that
will make its 27 member states less vulnerable to gas and oil supply shocks from partner
countries. In order to ensure its own economic security, the United States needs to bolster these
efforts by strengthening energy cooperation with the European Union.
Barriers to Cooperation
8 Leigh Phillips, “EU oOn Track To Meet Renewable Energy Target,” EU Observer, March
12, 2010.
9 “EU Sees Solar Power Imported from Sahara in Five Years,” EurActiv, June 23, 2010, Energy
Supply section.
10 Select Committee on Energy Independence and Global Warming, 110th
Congress (2008) (Testimony of Amy Myers Jaffe, Wallace S. Wilson Fellow for Energy Studies,
Rice University), June 11, 2008.
11 Congressional Research Service, “The European Union’s Energy Security Challenges,”
January 30, 2008.
12 European Union Delegation to the United States, “New EU-US Energy Council to Boost
Transatlantic Energy Cooperation,” November 4, 2009, accessed September 27, 2010,
http://www.eurunion.org/eu/index.php?option=com_content&task=view&id=3539&Itemid=58
A key factor in EU-US relations is Russia – the largest exporter of gas into Europe, with a
40.8% share of the market in 2007.13 This presents an especially complex situation for the United
States since it is divided between supporting its ally – the EU – and cultivating a productive
relationship with its former enemy and strategic partner – Russia. There are a few particularly
important points of contention with regard to both European and US energy security. The first is
relations with Central Asia – the origin of gas resources for both Russian and European pipeline
projects. The Caspian Sea/Caucasus region is the source of dueling projects, each aiming to oust
the other from the oil and gas distribution market. Russia views Nabucco as a direct threat to its
monopoly while the US is trying to court the country into engagement, driving it away from the
hostile atmosphere of recent years and reassuring it that it is a viable, equal partner in the
international scene.
Another challenge is that not all EU member states have addressed energy security with
equal urgency. Germany is particularly dependent on natural gas imports from Russia. By the
mid-2000s, its energy imports reached 62% and are projected to rise to more than 70% by 2020.14
While Germany has been actively restructuring its energy policy in response to the 2006 Russia-
Ukraine gas dispute, it has not taken concrete steps to wean itself from Russian natural gas.
Germany supports the EU’s strategic energy policy and the Nabucco pipeline project, but the
alternative is unlikely to substantially affect German dependence. The Nabucco pipeline project,
moreover, has not yet secured contracts with any supplier countries that would enable gas to fill
the pipeline.15 Russia has already signed contracts with Azerbaijan for an older pipeline,
increasing its influence over the rich Shah Deniz gas field and questioning the viability of
Nabucco.16
Central Asia is not the only contentious energy region; the Arctic Ocean has also proven
to be a hotspot for oil drilling. The Arctic ice shelf is said to house 22% of the world's
undiscovered oil and natural gas resources.17 Russia has a large border with the Arctic and many
of the Arctic's waters are contested between Russia, Norway, Canada, the United States, and
Denmark. The United States has not been as active in this region, but projections estimate that
about 36% of these resources are in North American provinces.18 Russia, therefore, is likely to
become even more critical to European energy security and its disputes regarding international
Arctic waters may involve the United States as it too looks for additional sources of oil and gas.
1. Reaffirm American Support. Even though the US has not neglected EU energy security,
it has adopted a temperate approach to supporting its allies. The Senate has held several hearings
2. US-EU Energy Council. Since its inception in November 2009, the US-EU Energy
Council has not taken further significant steps, leading one to doubt its effectiveness and the
credibility of the bilateral agreements. The EU Delegation to the United States declined to
comment on the Energy Council. The State department has also not responded to requests for
information on the Council’s activities. But if the Council is utilized to coordinate US-EU action
on energy security, it could play a significant role in coordinating U.S-EU efforts to strengthen
transatlantic energy and economic security.
3. Promote energy efficiency. Russia is not energy efficient but wants to improve. Gas
flaring during oil production, in particular, is harmful to both the environment and the economy.
The Accounts Chamber of the Russian Federation has estimated that Russia lost $5.7 billion in
revenue from gas flared into the air in 2009.19 The country has already taken steps to reduce its
waste: in 2009, Prime Minister Vladimir Putin signed a decree “setting the target of 95 percent
APG utilization by 2012.” 20,21 The EU and US both have an interest in sharing their experience
and expertise with Russia to achieve this goal. Greater energy efficiency benefits Russia, its
citizens, and the exchange of information and technology between it, the US and the EU.
Promoting energy efficiency would not be perceived as threatening by Russia since this would
increase energy revenues by improving Russia’s oil and gas output capacity. Ultimately, such
US-EU assistance would build confidence and strengthen relations with Europe’s key energy
supplier.
The same approach can be applied to the Central Asia region, where transatlantic
cooperation in promoting energy efficiency can lead to increased production and revenue for
Azerbaijani, Kazakh, and Turkmen gas production, making them more economically prosperous
and competitive. This aligns well with US and EU interests in the region and would not exclude
Russia since it would encourage (much like the official US stance) the Caucuses to be
economically competitive in the oil and gas market and to diversify their exports. The EU has
already established the INOGATE financing program, which works to finance energy efficiency
projects, as a part of its engagement policy with Central Asia. The United States could formulate
a similar policy and encourage investment in energy efficiency projects in the region.
19 Adam Newman, “Energy efficiency: Russia’s hidden reserve,” O&G Next Generation,
March 24, 2010, accessed September 27, 2010, http://www.cisoilgas.com/news/energy-
efficiency-russias-hidden-reserve/.
20 APG: associated petroleum gas.
21 Adam Newman, “Energy efficiency: Russia’s hidden reserve,” O&G Next Generation,
March 24, 2010, accessed September 27, 2010, http://www.cisoilgas.com/news/energy-
efficiency-russias-hidden-reserve.Adam Newman, “Energy efficiency: Russia’s hidden
reserve,”Ibid