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Russia urged to open up its gas pipelines

01.01.70

By Arkady Ostrovsky in Moscow and Tom Catanin London

European members of the Group of Eight club of industrialised nations yesterday stepped up pressure on Russia to ratify the energy charter. This would require it to open its gas pipelines to independent producers.

Russia, hosting a meeting of G8 energy ministers to discuss energy security, also had to tone down its proposal, contained in a leaked draft communiqu for the St Petersburg summit in July, that the group as a whole back nuclear energy.

A statement released after a two-day meeting of G8 energy ministers said simply: "For those countries that wish, widescale development of safe and secure nuclear energy is crucial for . . . diversification of energy supplies."

France, the US and Canada have all enthusiastically backed Russian efforts to get the G8 to endorse an expansion of nuclear power.

But Germany, which has pledged to close down its own reactors, and Britain, which is reviewing its position, have opposed the G8 adopting a formal position on the matter. Japan, which suffered leaks from its nuclear plants in 1997 and 1999, is reported to have expressed reservations.

One diplomat said Russia had to deliver tangible results at the G8 summit in St Petersburg to repair the damage caused by its suspension of gas supplies to Ukraine in January. This disrupted supplies to a host of other European countries.

Alan Johnson, UK trade and industry secretary, told the FT he hoped Russia would ratify the energy charter. He said the G8 would also like to see more transparency by Russia on gas reserves and infrastructure.

The treaty provides for arbitration in case of a price dispute between countries and would stop Russia from simply suspending gas supplies to another country. But it would also require Russia to open its export gas pipelines to independent producers and third countries, such as Kazakhstan. Moscow is resisting liberalising export gas pipelines which are controlled by Gazprom, the country's gas monopoly.

Viktor Khristenko, Russia's energy minister, said that talks were being held in a Russia-EU format, "as these two sides have different approaches".

The EU wants Russia to open access to its pipelines and in return is prepared to allow Gazprom access to its home distribution markets. Russia so far has rejected the liberalisation of pipelines from the energy charter treaty but is prepared to let western companies take minority stakes in developing its natural resources.

"Negotiations are ongoing, the talk process is not simple, and if results are reached, this would open up the possibility of ratifying [the charter]," said Mr Khristenko.

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