Title: Europe's Strategic Dependence on Russian Energy | The Heritage Foundation
Headings: Europe's Strategic Dependence on Russian Energy
Europe's Strategic Dependence on Russian Energy
Ariel Cohen
Director, CENRG and Senior Fellow, IAGS
Energy Dependence on Russia
Implications for European Energy Security
Policy Implications for the United States
Authors
Ariel Cohen
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Content: Russia is attempting to lock in demand by signing long-term bilateral and multilateral contracts with European countries. Moscow prefers to deal with the EU member states separately rather than as a group so that Russia can price-discriminate among its customers, charging each country as close to its full paying potential as possible. Gazprom has negotiated long-term supply contracts with most Western European countries, including France, Germany, Italy, and Austria. Russia has contracted for portions of Central and Eastern European demand that are much greater than that of Western Europe. Newer EU members, such as Slovakia, Bulgaria, and the Czech Republic, are almost entirely dependent on Russian gas. More recently, during President Vladimir Putin's May 2007 visit to Austria, the Austrian government agreed to a major deal with Gazprom. OMV, a partially state-owned Austrian energy company, signed a long-term gas import deal with Gazprom. [ 12] Under the agreement, Gazprom subsidiaries GWH and CentrexEurope Energy and Gas will begin to deliver gas directly to Austrian consumers in 2008. Current imports from Russia account for approximately 70 percent of Austrian gas consumption. [ 13] Gazprom is scheduled to deliver 6.8 bcm of gas in 2007 and 9 bcm in 2009. [