It is too late for regrets. With Europe worried that Moscow could cut off gas deliveries to Ukraine, which would trigger price volatility and supply risks throughout the continent, the failure of the Nabucco pipeline project stands out.
Created to carry Caspian gas into Europe by bypassing Ukraine, Nabucco would have given Europeans and Americans a much-needed sense of supply security — though the pipeline would have carried its capacity of 31 billion cubic meters of gas annually only near the end of this decade. Instead, Europeans are left scratching their heads and searching for alternative energy supplies.
Russia, meanwhile, is likely to remain Europe’s chief natural gas supplier through at least 2020, despite the anticipated growth of diversified gas shipments to Europe, including liquefied natural gas (LNG) from the vast U.S. shale-gas resources.
The problem is that Europe and the United States virtually fell asleep during the past decade. They forgot their 1990s strategic goal to cut European dependence on Russian gas. The European Union also failed to recall Moscow’s tendency to use its gas reserves as a bargaining chip in negotiations. Russia is, after all, a reliable supplier to the wealthy and powerful Western European markets, which are more liberalized and diversified than those in Central and Eastern Europe.
But the time has come to digest the lessons of the Nabucco failure. We need a serious political and geopolitical agenda to give clout to the European Union and U.S. talk about greater European gas-supply diversification. We also need to put an end to Russia’s intimidation tactics.