Time for an EU energy union, says Polish PM

BRUSSELS - The European Union must create an energy union to secure its supply and reduce its dependence on Russian gas, Poland's Prime Minister Donald Tusk i has said.

Tusk's energy blueprint, set out in an article in the Financial Times on Tuesday (22 April), would establish a single European body that would buy gas for the whole 28-nation bloc. This would end a system that currently sees the different countries negotiate their own deal with energy giant Gazprom, the government-backed firm which dominates Russia's gas market.

Meanwhile, "solidarity mechanisms" between EU countries would kick into action if countries were threatened with being cut off from gas supplies.

The question of energy independence, which was already one of particular concern to the EU's eastern European countries, many of whom complain that they are overcharged by Gazprom, has become more prominent as a result of the ongoing Ukraine crisis.

Last month, Russia doubled the price of the energy it sells to Kiev, increasing the pressure on the already cash-strapped government in Ukraine.

Meanwhile, Baltic country Lithuania is suing Gazprom, arguing that it pays 35 percent more for its gas than Germany.

Gazprom is currently subject to a probe by the European Commission's competition department over its dealings with eight EU countries, including Lithuania, and could face a multi-million euro fine for abusing its position as the dominant force in the gas market.

"Today, at least 10 EU member states depend on a single supplier - Gazprom - for more than half of their consumption," noted Tusk.

However, Tusk's view is not shared by the bloc's energy commissioner, Gunther Oettinger i who has stated that gas deals between EU countries and Russia will not be affected even if economic sanctions are imposed on Moscow because of its role in destabilising Ukraine.

"From my many talks with Gazprom, my impression is that our Russian partners will fulfill their contractual obligations and want to supply the gas," Oettinger told a German Sunday newspaper.

"I am against scaling back or even cutting our gas links with Russia in the coming years," he added.

Tusk also calls for EU countries to be allowed to exploit existing supplies of fossil fuels and the so-far untapped resources of shale gas.

Poland has been one of the most enthusiastic countries about shale gas exploration. However, uncertainty about the volume of gas deposits on European soil and public disquiet about the practice of hydraulic fracturing - needed to access the gas - means that Europe has not seen anything approaching the shale gas boom that has transformed the US energy market.

"No nation should be forced to extract minerals but none should be prevented from doing so - as long as it is done in a sustainable way," Tusk said.

Data published by EU statistics office Eurostat's indicates that imported gas accounted for 65.8 percent in 2012 up from 63.4 percent in 2009. Of this, Russian gas accounts for 30 percent, up from 22 percent in 2010.

Most European energy policy making is currently in the hands of national governments.