Ebook: Energy Security in the Wider Black Sea Area – National and Allied Approaches

This book is a result from the Advanced Research Workshop “Energy Security in the Wider Black Sea Area – National and Allied Approaches”, conducted in the frame of the NATO Science For Peace and Security (SPS) Programme and with the support of the Emerging Security Challenges (ESC) Division.

It aims to provide policy recommendations to contribute to the formulation of a strategic vision for the development of the Black Sea region and of NATO in the field of the energy security.

The workshop was focused on energy security from the perspective that it will remain a global challenge in the long run. Hence, the ARW discussed related topics, such as energy security policies, transnational energy projects, common (EU) strategies for energy security, which were blended with cross- cutting issues, such as critical infrastructure protection, public- private partnership, etc. The ARW thus sought to improve dialogue between NATO member states and NATO partners in an area of increasing importance for the Alliance.

One other contribution of the ARW is broadening of the international perspective in the field of the energy security. The participants in the Workshop came from international organisations, national institutions, international organisations, universities, industry and NGOs.

Thus, a balanced mix of experts was in place that ensured that the issues will not be discussed one- sided. In addition to that, a balance was sought in terms of geographical representation so that producers, suppliers and transit countries and NATO and Partner countries were present to have the necessary precondition for value adding dialogue in place.

The workshop has its role for improving international and national inter-agency cooperation.

This book collected the scientific reports of the participants from 12 countries and the main issues that were discussed during the Workshop included:

Big energy security picture

Regarding the general situation with respect to security and energy, Poptchev stressed that globalization, technology and the dynamics of energy trade brought diversification to the fore for both consumers and suppliers. He argued that diversification could turn into an economic or a geopolitical challenge, in particular in the gas sector.

Vashakmadze further stressed that the EU needs diversification of supplies and routes and elaborated on supplier side issues (Caspian gas abundance) and consumer side solutions (EU's Southern Corridor initiative).

For his part, Osheyko proposed a set of measures to improve the environment in which large- scale projects are implemented, including to create a unified information field on the current and prospective projects in the Black Sea region, including those under the Russia-EU format in order to provide the public with up-to-date and objective information about the situation in the Black Sea region.

The Role of EU-Russia Dialogue

According to Poptchev, that is currently characterized by the lack of strategic understanding on energy; bickering over the Third Liberalisation Package; and failure of EU to devise an effective policy on Russian energy. Now, it is important that the EU turned a new page based on pragmatism and priority negotiation of the energy aspects of New EU-Russia Agreement.

Southern Corridor

Vashakmadze stressed that if European gas buyers, European governments, the European Commission and international organisations do not succeed in coordinating their efforts in securing the development of the Southern Corridor at a scale which creates a win-win situation for the supplier countries and the EU, the gas market in the EU might tend to shrink.

Opposite scenario can be anticipated if Southern Corridor is functional and effective in terms of capacity and reliability. He noted the strategic significance of concurrent developments - White Stream in parallel with pipeline(s) via Turkey. Further on, Vashakmadze provided arguments that the EU need two entry points for gas supply, in contrast to Poptchev's view that only one project will most likely be selected.

Protection of Critical Infrastructure

The participants agreed that the scope of critical infrastructure that needs to be protected with respect to energy, includes: Oil/gas fields, Ports, Power plants; Pipeline transport; Maritime transport (oil tankers, LNG carriers). In terms of national approaches, Lenes presented the Romanian experience, in particular the establishment of the Romanian Association for the Protection of Critical Infrastructures and Related Services – ARPC, with the aim to bring together specialists from different fields, so as to contribute to the understanding and harmonization of specific norms and operating procedures for the protection of critical infrastructures and related services, in Romania, as well as at regional, European and international levels. She also stressed Romanian experience in serious gaming and infranomics. A governmental perspective to the issue of CIP was presented by the Bulgarian Ministry of Economy and Energy, including implementation of EU directives and further joint action plans. Vanek elaborated more on the technical side of CIP, namely what technologies could be applied to increase level of security.

The Role of NATO

What NATO could do in such an environment was among the key issues discussed. Proposed solutions concerned political measures, such as: awareness raising and information sharing in EAPC formats geared towards establishing strategic cross points between energy security concerns and vulnerabilities in the economic and overall security of nations and regions; discuss confidence-building and stabilization frameworks that could be provided for the duration of radical energy sector reforms. Critical Energy Infrastructure Protection (CEIP) should be seen as a component of a broader NATO policy on energy security as an emerging challenge: intelligence gathering and information sharing; pre-positioning of heavy moving and lifting equipment close to maritime choke points; coordination of national and regional CEIP measures – the WBS area is ideal for international frameworks in CEIP.

Alternative Ways to Energy Security

Presenters like Winkler emphasized the role of the increase of domestic renewable energy production (wind, solar, bioenergy) for improving the overall energy security situation. He stressed that this, however, requires substantial investments, which in the current economic situation may not be in place.

These exchange of views and ideas was possible as a result of the efforts of the NATO-country Co-director of the workshop VADM (Ret) Emil Lyutskanov, BuN, Senior Fellow of the Centre for Black Sea Security Studies and the Partner-country / Mediterranean Dialogue-country Co-Director Leila Alieva, President of the Center for National and International Studies. They maintained a constant direct communication with the governments and partners from the academia and the NGO sector. They selected the papers, collected in this book, which were edited by Assoc. Prof. Mila Serafimova. The compliers of the book hope it will inspire further discussions in the field of the energy security and will clear up the national and Allied approaches to the topic.

Emil Lyutskanov, VADM (Ret), BuN

Senior Fellow of the Centre for Black Sea Security Studies, Sofia, Bulgaria

Leila Alieva

President of the Center for National and International Studies, Baku, Republic of Azerbaijan

Mila Serafimova, Ph.D.

Associate Professor, National Defence Academy Leadership Department, Sofia, Bulgaria

Energy security is not a modern concern and is a common and strategic issue for every economy in the world. It consists of complex tasks with variety of solution targets, which can be based on short- and long-term conceptual approaches. On the other hand, nowadays the problem has significant differences among various countries and regions and can change its content even in a short term period. The paper begins with alternative concepts of energy security and concludes with personal conceptual view of the author to the problem and its solution. Dependencies between energy security and various other factors are analyzed. Based on the conclusions, the paper finally proposes an optimal conceptual control model for energy security for efficiency and sustainability. As a result, an “open energy” concept is offered for achieving a near-perfect energy security.

Following its independence from the Soviet Union, in 1990s Azerbaijan started to implement an independent oil and gas strategy, which led to an extraordinary amount of international investment flowing into the oil and gas sector. Today, Azerbaijan's best in class energy infrastructure is critical not only for country itself and the South Caucasus and Caspian regions, but also for the Europe, where some of the final consumers are. NATO could be important in the protection of energy resources and their transportation routes in the region. Increased level of NATO-Azerbaijan relations from cooperation in the frame of the Partnership for Peace (PfP) program to the execution of Individual Security Agreement would be in the mutual interest of the parties, as well as in the interest of energy consumers in Euro-Atlantic region.

This article focuses on the EU-Russia energy diplomacy after the disruption of gas supply in January 2009. Russia's policy is strategic, focused, and consistent. EU still does not have a common strategy on that issue. Even though there is a general consensus on the need for secure gas supply and some practical steps in that regard have been taken, European efforts are not yet consolidated. As a result, bilateral prevails over multilateral in EU-Russia energy relations and for the EU there is the growing challenge in becoming more dependent on Russian gas. The research identifies a number of security implications of the Russian pipeline diplomacy: the “divide and rule” policy towards European Union members and “near abroad” and its influence on the EU and NATO decisions, the Georgia crisis and the Ukraine case. In conclusion, this research argues that the EU needs to develop and implement a common energy policy in order to guarantee its future as a global actor. To achieve this, it is recommended that Brussels starts considering its energy relations with Russia as interdependent ones, taking into account Moscow's reliance from financial and infrastructural point of view.

Energy-related issues gained a prominent place within the NATO's new strategic concept declared during the Lisbon Summit (November 20, 2010). The resource nationalism and the energy terror, two underlying security menaces emanating from the New Energy Geopolitics, are believed to have prompted the Allies to device this (Seventh) Strategic Concept. Lisbon Summit to alleviate, if not remove, these security challenges tasked NATO with a set of duties. Turkey is a would-be fourth energy artery of Europe and a melting pot of these two energy related risks, thus, stands for an excellent litmus test for NATO's new energy role. However the Alliance could deliver a formidable contribution to Turkey's energy security under this double-barrelled challenge, the Turkish state's acute reliance on Russian energy wealth seems to greatly diminish the scope of such partnership.

The analyses in this report started with the question: “Was the 2008 Russia-Georgia war an Energy war, or energy was an important, but only one of the reasons of this war?”. For the past decade before the war Georgia has been championed as a reliable country through which new pipelines, safely controlled by Western companies, could bypass both Russia and Iran. On the face of it, the war has made a mockery of that claim. But war ended with a few damages for the regions energy infrastructure and the new question arise – will the so-called “New Realities” in the region, whose recognition Russia is insistently demanding, help to ensure future Energy Security in the Black Sea and even wider region?

Complex regional geopolitics combined with the rich natural resources conditioned Azerbaijan's approach to energy security. Bordering three regional powers – Iran, Russia and Turkey- Azerbaijan managed to utilize its geographical position and abundant hydrocarbon resources to its own benefit by rising as a powerful actor in energy security both of the Caspian and Europe. Azerbaijan plays a strategic role in energy diversification of the EU as a producer state by conducting independent energy policy in the challenging security environment of the region. The country's national approach to the energy security can be understood in the context of state building objective and hierarchy of threats to national security. Unresolved Karabagh conflict, ambitious neighbors, undefined Caspian legal status, military asymmetry in the Caspian, have direct or indirect impact on energy security and puts a major burden on the state producer providing for the energy security. Consequently, although unlike oil diplomacy, the gas policy of Azerbaijani leadership is more commercialized, as some national security objectives have been achieved, Azerbaijan will continue to harmonize relations with the other states through balancing gas deals. The cautious approach to NATO in a difficult balancing act is most likely to be replaced by the speedier integration in Euro-Atlantic Council, as the rising tensions in the region and security deficit urge for consolidated and combined efforts to promote energy security. The inclusion in the energy security concept social and political impact of energy development in the country – producer wil help to reduce the ambivalence associated with the NATO role in energy security.

The growing interconnection of the world and steep development of technologies increase the demand for large and complex critical energy infrastructures. In parallel, the task of optimal security of such infrastructures becomes a challenging task. Comprehensive area surveillance and effective mobile asset monitoring are two main tasks requiring non-trivial reasoning and planning. State of the art advances in mobile robotics provide means to optimally conduct these tasks using unmanned aerial vehicles (UAV) and a number of algorithms and techniques was developed to be able to deploy multiple UAVs able to act autonomously and perform high-level tasks specified by an operator. In seaborne transportation infrastructures the large space prohibits usage of UAVs and another means of security of oil and gas transport has to be sought. We present a brief overview of techniques used in the domain of contemporary maritime piracy, where the vulnerable assets need to transit pirate infested waters. In the center stands a multi-agent simulation which provides means to capture main structure of the problem and thus is able to evaluate countermeasures proposed by domain experts.

Based on joint analysis, security and energy cooperation strategies for the wider Black Sea area could be developed, with prior agreement that their respective negotiation and implementation should be tackled in separate “non-energy” fora. Critical Energy Infrastructure Protection (CEIP) should be seen as a component of a broader NATO policy on energy security as an emerging challenge: intelligence gathering and information sharing; pre-positioning of heavy moving and lifting equipment at points close to maritime choke points; coordination of national and regional CEIP measures are all relevant measures to the wider Black Sea area.

This article describes the upcoming energy projects in the «Russia - EU» format: the gas pipeline «South stream», the Burgas-Alexandroupolis oil pipeline and the Belene Nuclear power station. After a quick overview of the projects short analysis of them in the cross-section of sustainable development and a number of proposals are given.

European model of organization of gas and electricity sectors has started to be introduced in Wider Black Sea region. One of the countries which has committed to implement 3rd energy package is Moldova. Article presents its gas and electricity sectors and main challenges in the area of energy security. Additionally tries to foresee what will be the consequences of implementation third energy package by showing what will happen if package is: a) not implemented, b) partially implemented or c) implemented in most radical form.

The article provides rationales to the notion that the share of gas in the future EU energy mix is to be determined, among other factors also by the prospects of diversification of ‘pipeline gas’ supply and the resulting perception about the stability of supply and prices in future. The best, if not the only source of such diversification is the Caspian gas supply, but in order to serve for the purpose it needs to be of a strategic magnitude. EU has started to look for diversification options to mitigate thedominant supplier effect on the market, but with problems accumulating with ‘Nabucco only’ approach, EU have switched to more complex and comprehensive multi-project ‘Southern Corridor’ scheme with stated strategic goals of delivering 45-90 bcm of gas annually. An important difference of the new approach is the introduction of notion about the synergy and risk reduction effect of having routes across Turkey and across the Black Sea in parallel. Consequently separate sets of competing projects have been identified for both directions: along with well-known projects via Turkey, the Black sea projects like White Stream, AGRI and Bulgarian CNG project has been given political and financial support by the EC or in latter cases by White Stream has been included in the TEN scheme and was granted the status of a EU priority project of the Common Interest. Numerous factors, expected and unexpected have hindered the progress in the past years, but the path taken lately provides for securing success. That includes MS mandate for EC for negotiating trance-Caspian pipeline solution, identifying TCGP as a major Southern Corridor project, the CDC developments. Suggested TANAP development has planted confidence on finally launching a project via Turkey, absence of which was also preventing a start of advanced development of the Black Sea route. Implications for Black Sea area energy security discussed, exploring the role of NATO.

Ukraine has quite considerable potential of various kinds of sustainable energy, which currently remains mostly idle. We analyze general structure of the energy consumption in Ukraine, sustainable energy production potential of various regions of the country and prospects of substitution of traditional energy sources with some sustainable ones. It is shown that significant part of the traditional energy consumption, which involves imported energy carriers can be substituted with domestic sustainable energy.