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Russia would ratify amended Energy Charter Treaty - Kremlin aide

01.01.70

PARIS, April 26 (RIA Novosti) - Russia will ratify the disputed Energy Charter Treaty with the European Union only after the document has been amended to Moscow's satisfaction, a Kremlin aide said Wednesday.

"We share the tenets of the Energy Charter Treaty, and will be ready to ratify it after we have coordinated previously agreed amendments with our partners," Igor Shuvalov said in Paris as part of a European tour in his capacity as chairman of a commission on Russia's G8 membership.

A transit protocol to the charter requiring non-discriminatory access to Russian pipelines is currently causing friction between the EU and Russia, which has signed the charter but not ratified it. Shuvalov said Russia released a statement saying the document violated national interests immediately after signing it.

"Our European partners ... promised to amend the document immediately," Shuvalov told reporters, adding that eight years had passed since then.

Russia says it does not want to become a transit country by granting pipeline access to other countries, including gas producers Kazakhstan and Turkmenistan, or by liberalizing export gas pipelines.

Russia's domestic gas prices are another problem. The EU says they are unjustifiably low, giving Russian producers advantages over European producers. Russia argues low domestic prices are a natural advantage, just as a milder climate is an advantage for Europeans.

Energy giant Gazprom, which supplies about a quarter of Europe's gas, said accession to the charter would cost it $4.5-$5 billion in annual losses owing to price adjustment. But some experts say accession could also benefit Russia, as it would help it attract $480-$600 billion into its fuel and energy sector and increase energy exports.

"We do not want to create the impression that we are refusing to ratify [the treaty], and we believe we can fully meet our international commitments," Shuvalov said. "But we will not ratify the Energy Charter until it has been amended."

All the EU members and 51 other countries have joined the charter since it was adopted in 1991. Seventeen countries and 10 international organizations hold observer status. The United States has not signed the document.

Visiting the United States last week, Finance Minister Alexei Kudrin said the charter had a "whole range of defects," while Energy and Industry Minister Viktor Khristenko earlier described Russia's talks with the EU on the matter as "intensive, but difficult."

The Energy Charter Treaty also says price disputes should be arbitrated, and would prohibit Russia from halting supplies to any country, as the EU says European consumers must not be affected by differences between Russia and its former Soviet allies.

Russia and Ukraine engaged in a bitter spat over gas prices in late 2005 and early 2006 that led to Russia briefly halting natural gas supplies to Ukraine. The resulting cuts in supplies to European consumers seriously alarmed the EU, which is the main consumer of Russian energy resources.

Expert opinion

Halter Marek

02.12.06

Halter Marek
Le College de France
Olivier Giscard dEstaing

02.12.06

Olivier Giscard dEstaing
COPAM, France
Mika Ohbayashi

02.12.06

Mika Ohbayashi
Institute for Sustainable Energy Poliy
Bill Pace

02.12.06

Bill Pace
World Federalist Movement - Institute for Global Policy
Peter I. Hajnal

01.12.06

Peter I. Hajnal
Toronto University, G8 Research Group