Energy: Brussels Told to Pursue Azerbaijan Pipe Dream

The EU must redouble its efforts to build the $12bn Nabucco gas pipeline and reduce its dependence on imports from Russia in the wake of the Georgian crisis, its energy commissioner said yesterday.

The conflict in the Caucasus has led many experts to dismiss Nabucco, the planned 3,300km pipeline from Azerbaijan to Europe via Georgia and Turkey. But Andris Piebalgs said the aim of diversifying energy sources and routes was even more important now.

"We need more political engagement to remove all the political obstacles to Nabucco to bring gas from the Caspian basin to the EU," he said in the face of evidence that the ambitious project to bypass Russia is foundering.

Gazprom, the Russian gas monopoly, has already offered to buy Azeri gas at world prices and has put its weight behind two alternative pipelines, Nord Stream and South Stream, to Europe.

Piebalgs won backing from Nabuo Tanaka, executive director of the International Energy Agency, who said alternative import routes would enhance the EU's energy security and reduce its dependence on Russia. Russia provides 42% of the EU's overall gas imports and 30% of its oil but accounts for up to 80% of energy imports in some countries.

Moscow and Gazprom have succeeded in dividing the EU by signing bilateral supply deals, notably with Germany, Italy and Austria, and by persuading member states to take part in its own sponsored transnational pipelines even when they are already involved with Nabucco.

But Tanaka, presenting the IEA's first review of EU energy policies, said Russia's dependence on Europe was much higher, with the EU taking 70% of its oil and gas exports. "It's more and more important to have a single European energy market and a single EU voice," he said. "In the long run countries conducting relations on a bilateral basis will lose out."

The 220-page IEA report adds: "Speaking with one voice and acting in a consistent and unified manner will be crucial to moving towards closer relationships between the EU and the external suppliers on which it will increasingly depend in the future."

The ultimate aim of the six partners in the Nabucco project and the EC is to import gas from the Middle East, including Iraq, via the pipeline.

The IEA also urges the EU to step up its efforts to promote renewable sources of energy if it is to reach its 20% target of consumption by 2020 and combat climate change. Tanaka said that an extra $45tn (£25tn) of investment in renewables and other green technologies would be required globally by 2050 if the world were to cut carbon emissions by a half - the EU's own long-term goal. This would be on top of the $22tn required globally to reach interim targets.

The agency endorsed the EU's "bold and innovative" energy and climate change policies but said continued use of nuclear power "is almost certainly going to be necessary" to achieve its goals.