Fri, Jan 23, 2009 - Page 6 News List

Europe makes plans to avoid repeat of gas crisis

AFP , VIENNA

European countries vowed on Wednesday to avoid a repeat of the crisis that saw crucial gas supplies cut off for 15 days because of a row between Russia and Ukraine, as they counted the cost of the dispute.

As Russian gas began flowing back into the millions of homes left without heat in the depths of winter, governments pledged to seek ways of preventing similar crises in future, after the cut-off highlighted the danger of over-dependence on a sole supply source.

“The current gas crisis has made it clear that we cannot allow ourselves to reject any source of energy,” German Economy Minister Michael Glos said, hinting at a possible U-turn on his government’s stated policy of phasing out nuclear power by 2020.

The EU relies on Russia for almost a quarter of all the gas it consumes, notably for heating and for powering certain industrial activities.

Poland, which fared best during the crisis because it continued receiving more than 80 percent of its Russian gas via Belarus, unveiled plans to build “one or two” nuclear power plants by 2020.

Poland has no nuclear plants at all and generates 94 percent of its electricity from coal.

Polish Prime Minister Donald Tusk said plans to build a new port for gas tankers would be brought forward, as would liquified natural gas (LNG) supply agreements with Qatar and Kuwait.

In Romania, President Traian Basescu called on the EU to unite to defend its energy interests.

“United action would enable the EU to better defend its interests and ensure an alternative” to Russian gas, he said.

He cited the EU-backed Nabucco gas pipeline project, a 3,400km pipeline between Turkey and Austria that will transport up to 31 billion cubic meters of gas each year from the Caspian Sea to western Europe.

Ministers from the six countries participating in the project are to meet in Budapest next week. And the project’s leaders believe the crisis will provide sufficient momentum to clear key hurdles this year.

Hungarian Prime Minister Ferenc Gyurcsany — currently on a trip to Oman and Qatar in search of alternative energy supplies — hit out at Russia and Ukraine, accusing them of holding Europe hostage to what was effectively an internal pricing dispute between Moscow and Kiev.

Despite depending on Russian gas for more than 90 percent of its supplies, Hungary was able to fare reasonably well thanks to its substantial reserves of some 3.5 billion cubic meters, he said.

Serbia, however, had to call on emergency supplies from its neighbors.

Poor planning meant that Serbia’s reservoir in Banatski Dvor, which would have helped buffer the country against the worst of the crisis, was almost empty when the Russian gas stopped coming.

Serbian industry estimated that 59 companies had been forced to scale down or completely shut down production, running up losses of 2.9 million euros (US$3.8 million) per day for the companies themselves and as much as 5 million euros for the economy as a whole.

In Slovakia, Prime Minister Robert Fico estimated that industry had been losing 100 million euros a day last week.

And Economy Minister Lubomir Jahnatek said Bratislava would seek joint EU action for possible compensation from Russia and Ukraine.

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