EU Looks to Cut Down Blocks in Gas Exchange
Published By : 20 Mar 2015 | Published By : QYRESEARCH
EU leaders stated their intention to work in unison to break down the challenges to the energy market in the region, particularly in light of the Crimea crisis and the important role Russia plays in the energy politics of Europe. The move consisted of a call for stronger national gas market regulation, particularly that of Russia.
The European Union receives a massive one third of its total gas consumption from Russia. Several of the European Union’s countries are in fact totally reliant on Russia’s state-owned gas company Gazprom. Russia has been known to use this power to their benefit; earlier this year, Russia cut its gas supply to Slovakia by half after the latter started supplying gas to Ukraine for winter storage. The unrest in Crimea has once again raised questions about Russia’s role in the energy dynamics of Europe and the possibility of further gas cutoffs.
The European Commission announced Thursday its plans to create a peaceful network of gas supply within the 28 member states of the European Union. The European Commission is the executive body of the European Union. This is in response to the condition of Gazprom’s contracts with some countries, which disallow the usage of unused gas and allow the Russian gas giant to overcharge for the same.
According to European Council President Donald Tusk, the formation of this “energy union”, as it is being called in regulatory circles, would help supply gas to every country and every last citizen in the EU.
Major resistance to the move came from Hungary, which recently renewed a cost-effective contract with Gazprom, Germany, the Netherlands, and Finland. The opposition from the latter three was based primarily around the issue of private gas companies having to share trade secrets about their dealings with Gazprom. However, an assurance that commercially important policies would not be made public turned the three in favor of the energy union.