Poland's Energy Union gathering momentum

By bne IntelliNews May 27, 2014

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Despite initial skepticism, Polish Prime Minister Donald Tusk's Energy Union plan is starting to gain some traction, including in Berlin, EU officials suggested on May 26.

Tusk revealed the six "pillars" to his planned energy union on March 29, shortly after the annexation of Crimea by Russia. The main thrust of the idea is to present Moscow with a single EU gas purchaser in order to prevent it using energy as a weapon to pick off individual member states, in particular at the eastern end of the bloc. The immediate response around Europe was less than enthusiastic, with many pointing out that such a union would break competition rules. 

However, according to Reuters, the persistence of the Polish leader is starting to gather support. Unnamed EU diplomats claimed to the newswire that the idea has momentum, and that even German Chancellor Angela Merkel has not totally ruled it out. "We have not got a clear 'no' in Berlin," one diplomat said. "Some of the issues have to be reflected on."

Despite opposition expressed by the likes of the Czech Republic - not to mention Brussels point man on energy - the initiative has become Tusk's pet project. He put it at the heart of his Civic Platform party's campaign in the May 25 European elections, at which it won a creditable draw with the populist opposition. Meanwhile, the bloc-wide success of the right in the vote has an early supporter - Jean-Claude Juncker - thrusting ahead in the race for presidency of the European Commission.

Still, an Energy Union will need no little support before it can gather the required momentum to push past the opposition within the bloc. The likes of the UK - and likely some of the eastern member states - will resent any bid to increase the centralization of power in the EU. Gunther Oettinger, the EU's Energy Commissioner, remains unconvinced. "Gas is a product, not a policy weapon for the EU," he said on May 15. 

Yet as Reuters reports, there are other signs of gathering support. EU leaders are set expected to debate the idea at on May 27 and the idea will also feature in a report on energy security due from the European Commission the following day. The next major test is an eagerly awaited decision by the European Commission on the future of the bloc's gas imports, to be announced in June. 

Tusk's six pillars include a gas solidarity mechanism and diversification of gas supply to the EU. Shale gas also gets a mention, as does the "rehabilitation of coal" as a source of energy, part of an attempt to boost Poland's ailing coalmining industry. The most revolutionary proposal in Tusk's initiative is the idea of joint gas purchases, Robert Tomaszewski, an energy specialist at Polityka Insight, a think-tank in Warsaw told bne in mid-May. 

Orders would be supervised by an agency modelled on the Euratom Supply Agency, or else by a consortium that would buy gas on behalf of companies. "This would strengthen EU countries' position in negotiations with Gazprom, which would lose its ability to give different prices for its European customers," he explains.

"Quite a lot of member states share the objective, but seem to have doubts whether this is feasible in terms of trade and competition law," an unnamed EU official told Reuters. Dieter Helm, a professor at Oxford University, suggests the central gas buyer idea is not necessarily incompatible with the laws of the EU single energy market, if the gas were auctioned.

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