Clean energy transition of the EU: green power means in the international system

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Clean energy transition

of the EU

Green power means in the international system

MA Thesis in European Studies

European Policy Studies

Graduate School of Humanities

University of Amsterdam

Author: BA Tomas Hos

Main supervisor: Prof. dr. Jamal Shahin

Second supervisor: Mr. dr. Anne van Wageningen

February 2014

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I would like to thank my supervisor Prof. dr. Jamal Shahin for his willingness to provide me with his valuable guidance, critical input and support throughout writing this thesis.

I would also like to thank Evert van Dijk, Jos Schoutsen, Corina Negru and my family for their constant support during my whole studies.

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Introduction

The energy sector in Europe is undergoing a great transformation. Although its form and pace may differ per Member State, it cannot go unnoticed by the average European citizen. Conventional ways of energy generation based on fossil fuels are abandoned as the European Union moves towards a cleaner, more efficient and more sustainable energy sector. Examples of this change are demonstrated by the construction of large off-shore wind parks by Denmark and Netherlands, solar-panel installation in the Mediterranean countries and ocean-wave energy experimentation in Scotland and some regions of the Sahara have been projected to supply the EU with clean energy from a network of photovoltaic fields. The Netherlands and the UK develop Carbon Capture and Storage, a new generation of highly efficient coal power plants with minimal climate pollution. Most post-2004 EU Member States gradually marginalise their old coal-based energy sector and replace it with low-carbon sources. Some of them prefer nuclear power, whereas Germany has adopted a contrary strategy, opting to phase-out its nuclear energy sector and substitute it with gas, coal and renewables. New international high-voltage transmission lines have been built throughout the continent, both above and below ground, and in some cases through the laying of submarine cable. Through the entire Union, biofuels are used as a CO2-neutral fuel and unconventional shale gas has become an actively discussed topic. Because

of this new outlook, individual Europeans have been made aware of their own obligation vis-à-vis clean energy and conservation, resulting in, for example, improvements in home insulation and the adoption of low-energy bulbs. Hybrid and electric cars are generously subsidised and electricity rechargers are becoming more commonplace at petrol stations. Even though it may not be apparent at first sight, all of these developments are closely related to the EU’s policy-making. Referring to the unsustainability of conventional energy generation and economic growth, it is the EU which moves Europe towards more sustainability, efficiency, wealth, social cohesion and security. To this end the Commission enacts legislation intended to spur the Member States towards promoting and promulgating the transition process.

Probably the largest and most ambitious legislative bundle on energy produced by the EU institutions thus far has been the Climate and Energy Package of 2009. The EU integrates climate change mitigation into its energy policies resulting in stringent CO2 targets and deployment of a

new energy infrastructure. The strictness of the legislation is usually explained by the alarming state of global climate, but also as a consequence of the EU’s international commitments. The EU claims to lead the world by example towards more a sustainable future, demonstrating which domestic changes must take place and how they should be carried out. The beginning of this universal commitment was the Kyoto Conference in 1997, and recently, in 2009 the EU reasserted its global commitment at the Copenhagen Climate Change Conference. To translate the strong words to reality, the EU designed long-term strategies, frameworks and indicative targets. The Climate and Energy Package comprises a significant part of this approach.

There is no doubt that Europe needs such a far-reaching strategy. The energy sector based on fossil-fuel combustion is unsustainable from many points of view. Negative effects of greenhouse gases emissions on the environment and climate, as well as the legitimate threat of fossil fuels depletion are only two of them. However, these are not new conclusions. This gives rise to the question as to why the Commission has so latterly embraced clean energy as a primary policy. It

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could be explained by innovative technological advancement enabling better clean energy development; or by greater popular awareness of the damage wreaked on the environment under the old fuel supply, and the subsequent revelations of ozone damage and climatic warming. There can be little doubt that these motivations were complemented by the political manipulation and the attractiveness to politicians of being on the clean energy bandwagon. It must be asked if this noble defence of the public good inculcated in them fortitude to pursue this policy to conclusion. If clean energy was convenient for the EU policy makers and high politics, it was strengthened by the fact that there no longer was a reliance on the support of the presumed enlightenment and normative responsibility of the elites and lobby groups. This thesis elaborates on this critical view and focuses on the external advantage of the clean energy transition. It concentrates on positive implications of the EU’s normative clean energy strategy to its international position and external leverage. This expounds on the EU’s fervent dedication to clean energy pursuance and presenting it as the most correct philosophy of life. Within these parameters, the central inquiry of this thesis is how the clean energy transition can serve the EU as a means to enhance its position vis-à-vis the other players of the international system.

The thesis starts with the hypothesis claiming that clean energy development serves as a tool to enhance the EU’s external leverage. It presumes that even though the EU can be still seen as a strong political bloc with considerable external leverage, its influence over other countries has had a declining tendency. The EU’s civilian and normative tools instituted to realise its objective appear to be partially ineffective. The energy sector shows how significant this ineffectiveness can be. The preponderance of power remains in the energy-producing countries as a result of which these countries are prevailingly resistant to the EU’s normative governance. Moreover, future prospects do not promise any substantial alteration of this trend, unless the EU finds a way to accumulate more power capabilities over such countries. The hypothesis claims that the current energy transition serves the EU as a means to address the EU’s power loss. Clean energy can introduce new sources of power over the other members of the international system and limit power those members have over the EU. As a result, the EU should be better equipped for its pursuit of external normative governance and realising its goals.

Concerning the structure of the thesis, the argument is developed along three main chapters. The first chapter outlines the theoretical framework of the argumentation. The tone of the hypothesis might have already indicated that the thesis is backed by the Neorealist theory of international relations. The chapter explains the origins and evolution of Neorealism, but also its suitability for this research. The second chapter pursues the EU’s external governance as a normative power (NPE), summarises the scientific debate on this topic and offers an evaluation of the NPE’s effectiveness, particularly vis-à-vis some energy exporting countries, with which the EU intensely maintains economic and political relations. The chapter reveals the NPE’s ineffectiveness in external dissemination of its values and norms, thus realising its self-regarding interests. The last, third chapter further elaborates on the hypothetic argument by presenting the EU’s ‘green’ and clean energy policies as a means to enhance the NPE’s external leverage. It dismisses the power neutrality of the norms of clean energy and climate change mitigation and points out that the energy policies based on climate change mitigation are power-loaded and serve the EU’s self-regarding interest. Concretely, the chapter builds upon the following sources of international power and legitimisation derived from the clean energy transition: international policy leadership and its legitimacy, energy security, competitiveness and job creation, multi-level coherence in policy preferences and the EU’s internal legitimacy.

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This thesis aims to contribute to the scientific debate concerning the EU’s normative external governance. It responds to the argument by Ian Manners (2002) that the EU can be considered as a power exerting influence through the ability of establishing norms, being in line with universal human values and intended to protect and defend global public goods. This thesis concurs with the EU’s discursive power capability and the universalist background, but challenges the purity of the global and public goods mission as the EU’s primary aim. In this case, this thesis claims that the EU’s normative approach in international relations is a tool to pursue its self-regarding interest, thus ensuring its own security.

The argument of this research is inspired by a considerable amount of articles and other publication dedicated to the study of the EU’s external governance, energy security and clean energy transition. The following reflects the variety of authors and other sources consulted. Jan Orbie (University of Ghent) and Richard Youngs (FRIDE) in particular outline the main framework of the EU’s external action in general and in energy respectively. Both authors also offer some evaluative conclusions on the EU’s normativity in external action, which is a key part of the second chapter. Richard Youngs (FRIDE) and Sijbren de Jong (EU-GRASP, HCSS also focus on normativity in the EU’s external energy governance. Edith Vande Brande, (University of Ghent), Sebastian Oberthür (IES/VUB) and Louise van Schaik (Clingendael) provide a critical analysis of the EU’s climate and clean energy leadership and policies, and emphasise their positive implications for other policy areas and European integration. Paragraphs concerning the securitisation of climate change and its consequences to the EU’s external relations are based on Berry Buzan’s theory of securitisation (Copenhagen School). In return, this thesis offers a contribution to these scientific works by proving the power function in the EU’s green Kantian norms of sustainable development and climate change mitigation. In addition, next to scientific debates, the thesis makes use of several newsletters, various policy briefs of external think-tanks and research institutes, EU’s official documents and three interviews conducted with high representatives either from the EU institutional setting or at the Member State level (Lithuania). These interviews were made during the period of winter and spring 2013, when Lithuania was presiding the European Council, when it was concerned about Russia’s strategic and energy approach towards the Baltic region, while the EU was pushing through further legislation on renewables and the energy transition and faced an imminent price war with China with respect to photovoltaic panels. Interview transcripts are available on the occasion of a request at the author.

This research discloses that the EU’s pursuit of Kantian normative governance in the form of energy transition serves the EU’s self-regarding interest. Clean or ‘green’ energy rather contributes to the maintenance or even enhancement of the EU’s external leverage as a complement to its altruistic disguise. Therefore, energy policy, irrespective of its ‘colour’ continues to be a matter of realist and strategic consideration rather than a product of the EU’s Kantian self-awareness. Clean energy and power are inseparable.

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1. Neorealist theory

Policy and decision-making are extremely difficult and opaque processes, resulting from diverse interests, assumptions, compromises, constraining factors and other influences. When applied to the international politics, its complexity becomes even more intense, since local occurrences and developments can engender significant external repercussions while distant occurrences can in turn have serious impact domestically. In this study, a relationship between international power politics on the one hand and EU’s internal ‘green’ energy policies on the other is approached through Neorealist perspective. Consequently, the main aim of this section is, firstly, to introduce Neorealism in terms of its background, main laws and assumptions and, secondly, to establish its suitability to this research topic.

Theories are a key tool in social sciences. They are mentally formed collections or sets of assumed laws pertaining to particular behaviour or phenomenon. Theories are constructed speculative and simplified processes arisen through inductive generalisation, abstraction, isolation, aggregation and idealisation, in order to identify the central tendency among a confusion of many other tendencies. Since theories describe only a part of reality, they are distinct from the reality they concern (Waltz 1979: 2, 5-10). In other words, theories construct a reality, but no one can say that it is the reality. Most importantly, theories have not only descriptive, but also explanatory and predictive powers; theories reveal and rationalise continuities both retrospectively and prospectively. The extent to which these powers are corroborated by empirical proofs determines the usefulness of a concerned theory. So, when applied to the study of international relations, theories claim to be able to elucidate actors’ past, current and future actors’ behaviour, interactions and other processes within a system where international relations are enacted (Waltz 1979: 69).

Neorealism gradually appeared in the 1970s as a revision of an old-fashioned Realist approach. Realism has a long history of being a dominant conception of international relations, as it was first applied already in antiquity. According to the Realist school, a limited number of poles, i.e. dominant unitary states or blocs, are rational actors, which interact with each other in an endemically hostile, anarchic and decentralised system. Their raison d’être is first to survive and subsequently to preserve their integrity, by means of acquisition of as many power as possible, to exert as much influence as possible. The amount of power is directly related to state’s behaviour and probability of survival in international anarchy. So, according to Realists, conceptualised power is both a means and an end in itself for a state. Ideally, security should be guaranteed by obtaining a hegemonic position and imposing hierarchy to be able to exercise power over rivals. Such a position may be reached also by military means. Another way to reach security in the system is an effective balancing of revisionist (expanding) states by skilful manipulation of opposition alliances. Overall, following from Hobbes’ homo homini lupus, Realists argue that states are primarily self-interested and egoistic, and their existence is a rational consequence of the principle of self-help, taking place in an anarchic environment of conflict and competition(Schweller and Priess 1997: 6-7).

Nonetheless, Realism has been criticised by many international relations scientists (Mearsheimer, Gilpin, Katzenstein and Layne) in particular for inconsistency and insufficiency in methodological compactness. The greatest revision so far has been conducted by Kenneth N. Waltz’s contribution to the scientific debate on the validity of Realism. Having anatomised the

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methodology of classical Realism, Waltz agreed on the basic attributes of international actors – the states are unitary entities, driven by great security concerns and adversarially interacting in an environment of anarchy. Nevertheless, Waltz argued that the old-fashion realist explanation of actors’ behaviour was insufficient. Consequently, Waltz’s introduced structures, integral components of the international system exercising power over individual actors, thus affecting their behaviour. The structures arise from interaction between actors, number of these actors, their position in the international anarchy or hierarchy and their individual size and possession of other capabilities. However, the structures remain extrinsic to actors. The processes of socialisation of states and competition among them are the paramount structures (Waltz 1979: 2, 73-74). Moreover, crucially, Waltz (1979: 73-74) claims that

structure designates a set of constraining conditions. Such a structure acts as a selector (…).

Freely formed economic markets and international-political structures are selectors, but they are not agents. Because structures select by rewarding some behaviors and punishing others, outcomes cannot be inferred from intentions and behaviors.

Further, ‘structures are defined not by all of the actors that flourish within them but by the major ones’ (Waltz 1979: 93) i.e. poles or states which are able to recurrently exert some power over other states in fields of a strategic interest. This all implies that states’ outcomes cannot be perfectly rational, such as Realists asserted. Waltz compares the international-political structures with market structures, such as prices, market standards, fashion, company’s size and know-how etc.: ‘[j]ust as economists define markets in terms of firms, so I define international-political structures in terms of states’ (Waltz 1979, 94). Overall, international structures emerge from the interaction of great states and, subsequently, they constrain actors of the system from taking certain actions whereas it propels them toward others (Waltz 1979; Evans and Newham 1998: 30; Gilpin 1986: 301-321).

As mentioned above, in an international system, actors interact by means of permanent tension. However, this conflict atmosphere does not necessarily need to be understood as confrontation by force. The mutual hostility driven by the struggle for survival and fear for rival’s relative advancement can be also expressed as an endless competition. The subject of competition are relative gains of capabilities, such as military and economic possessions, natural endowment, population and territory size, and geopolitical position but also intangible attributes such as actual polity, internal coherence and stability, bureaucratic struggles and other internal processes, moral, discipline, productivity, levels of technology, research and development, etc. The capabilities gathered, reached and built determine the position of their proprietors vis-à-vis other actors in the system. Therefore, redistribution of capabilities has a direct influence on states’ mutual positions and balance of power among them. Since states interact through endless competition, they are oriented to acquiring relative gains rather than absolute, long-term gains (Waltz 1979: 119, 131; Evans and Newham 1998: 8).

Moreover, cooperation between states appears only when gains with respect to certain others in terms of security, wealth and stability are expected to be generated. Cooperation, however, is difficult to be reached since states consider cooperation as a kind of interdependence. Being interdependent or even dependent is perceived as a great vulnerability - states are exposed to the possibility of existential failure and extinction. However, cooperation is sometimes inevitable, e.g. due to international trade and balancing alliance cooperation, occurrence of some collective threat or a hegemon etc. Yet, even within this cooperative framework, states look to constrain each other’s gains, being primarily interested in maximizing their own profits and

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minimalizing dangers to themselves. Overall, states in international systems , firstly, seek to develop the greatest comparative advantage vis-à-vis others through accumulation of capabilities and, secondly, strive to have the smallest gap in the possession of capabilities with respect to others, such as firms do on the market. (Waltz 1979: 65-70, 82, 97, 102, 106; Evans and Newham 1998: 8; Collard-Wexler 2006: 400-406)

Such a perspective on cooperation is one of the main sources for many critics of Neorealism, one of which is liberal institutionalism. Next to the notion of cooperation, its criticisms is focused on the narrow-minded and insufficient definition of actors and their raison d’être. Liberal institutionalists assert that even though states are dominant actors of the international system, they are not the only agents. Aside from them, different public and private agencies, trade unions, political parties, supranational and international bureaucracies, multinationals etc. interact with each other too, from which the structure arises. Further, these actors are not either unitary or rational and the authority inside them is decentralised. Actors’ purpose of being is not only power or security, but also economic growth, welfare accumulation and civic stability. Another point which makes Neorealists and liberal institutionalists irreconcilable rivals, is the perception of international institutions. Neorealists ascribe no major role to institutions in the system and cooperation is understood as negative interdependence leading to unsafe vulnerability. By contrast, liberal institutionalists are convinced that institutions successfully act to promote cooperation and that interdependence is advantageous, because costs of cooperation appear to be lower than costs of non-cooperation. Liberal institutionalists’ greatest proof against Neorealism is the paradigm of the West-European cooperation after the World War II. Overall, liberal institutionalists argue that Neorealism fails to explain the logics of European integration having so far resulted in European Union – why would that all happen if cooperation, integration and interdependence were so threatening? (Grieko 1988: 488-503)

Naturally, some Realists have reacted on liberal institutionalism’s criticism. For example, Grieco (1988: 505-507) reasserts the importance of relative gains, which constrain any kind of perfect cooperation. So, he opposes the neoliberalists’ assumption that gains are acquired through common endeavour. He states that if states cooperate, they are concerned about durability of joint actions, number of participants, issue linkages etc., in order to minimise relative gains of their colleagues or to minimise their own relative losses with respect to others. Further, Simon Collard-Wexler (2006: 400-406) admits that Neorealism may seem to have been disproved by the European integration on the one hand, but on the other, he asserts that Europe can find itself in a temporary transition, whose consequence will be the formation of a new unitary, centralised and rational actor having its security and preservation as the primary objective. The establishment of the new world power Europe can be explained as a necessary self-help reaction on the emergence of the fully anarchic multilateral and subsequently multipolar order, where no geopolitical bipolarity guarantees relative stable position and security of the European continent. Europe will have overcome its ontological limbo and internal incoherence and it will fulfil the role of a postmodern great power, balancing Russia, USA, China or any other superpower through competition and alliances. It will be equipped with great political, economic and military power means, being derived from Europe’s capabilities, such as great population, vast territory, natural endowment but also R&D advancements and post-modern, value-based governance. The process of EU’s Internal Market can be seen as contributing to the emergence of such Europe. This research is inspired by this forecast, being reflected in the Neorealist interpretation adopted in this study.

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Furthermore, Criekemans (2011: 88-91) states, we are currently witnessing a great geopolitical shift being represented by the on-going clean energy transition. Fossil fuels are being gradually replaced by renewables and this entails enhancements in power and economic leverage of some geopolitical regions on the one hand and leverage deteriorations of some other poles on the other. New clean energy leaders are being moulded as a consequence of natural resources endowment and intensity of capital investments leading to technology improvements, being facilitated by the presence of leading companies in the energy sector. Hence, already today’s stance towards the issues of clean energy will have great consequences to the allocation of power in the future. Consequently, if any pole aims to preserve its leading position or any other actor aspires to enhance its position, serious commitments to clean energy development are now necessary. Even more importantly, if any actor of the international system intends to become the future leader in energy, a leadership in the present clean energy development is crucial. And if any pole intends to become an overall leader in the future, leadership in energy is an important capability facilitating the fulfilment of this ambition. Such an interpretation corresponds with the Neorealist approach, which, too, justifies the choice of a Neorealist theory in this study.

Aside from the rational accounts, such as Neorealism, however, some Constructivist approaches claim to explain the process of international relations. According to the Constructivists, actors’ behaviour and their mutual interactions are not purely rational. Rather, they are consequences of preceding decisions and processes, and directly influenced or even determined by mutable norms, ideas, beliefs, values and identities. In this way, actors do not have absolute control over their own behaviour. So, differences between Realisms and Constructivism are substantial: ‘[w]hile some Constructivists would accept that States are self-interested, rational actors, they would stress that varying identities and beliefs belie the simplistic notions of rationality under which States simply pursue survival, power, or wealth’ (Slaughter 2011: 4) Due to the complexity of influencing factors, the strength of Constructivist approaches lies mainly in its explanatory dimension. Realisms, on contrary, seem to perform more satisfactory in terms of anticipatory qualities based on Hobbesian assumptions of human nature (Slaughter 2011). Since this study aims to understand the future consequences of the current decision making, irrespective of their likely preceding and subsequent dynamics, the Neorealist theory appears to be more suitable for fulfilling the anticipatory objective of this research.

Overall, this methodological chapter has offered a comprehensive introduction to the Neorealist theory applied in this study. Firstly, the background, basic laws and assumptions of Neorealism have been concerned. Neorealism has been represented as a predominantly rational theory, where security concerns and extrinsic structures play dominant roles. Secondly, main criticisms of Neorealism, such as Liberal Institutionalism and the Constructivist accounts were regarded. However, finally, some defensive and revisionist reactions on these criticisms demonstrated that Neorealism is, still, a suitable approach for this study: Neorealism seems to be able to explain and predict the long-term consequences of the EU internal policy-making on energy in the context of global international system to a satisfactory extent. The next chapter analyses the discourse of the EU external governance, depicting the energy sector as an anomaly to the general discourse of the EU external governance.

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2. EU’s external governance

The European Union is nowadays perceived as a major actor in the international system. The European flag can be spotted on all continents and in nearly all countries of the world. The presence of the EU is usually disguised as international trade, political delegation, projects of the promotion of democracy, humanitarian aid, sustainable development, peacekeeping and others. Hence, traditionally, the EU is described as a postmodern and pacifistic power, representing and disseminating universal norms and values while excluding any kind of coercion in is external activities. Nevertheless, recently, a lot of attention has been paid to the process of securitisation, which clearly deviates from the EU’s appearance as a soft power. Elaborating on this, this chapter is divided in two sections. Firstly, the basics of the EU’s external governance concept will be outlined, focusing on EU’s civilian and normative character. Subsequently, drawing from the preceding chapter, it will be exposed to some realistic criticisms, emphasising EU’s interests in its security and historical preservation. The second part comprises an analysis of EU’s external governance in energy, discussing both the civilian and normative assumption and Realist criticisms. In this section, it will be argues that the EU’s external energy governance does not comply with the Kantian governance assumptions, since its sense of raison d’être is derived from realistic security concerns. Last but not least, following from the preceding two subsections, a hypothesis will be revealed EU’s difficulties in external energy governance and current clean energy discourse.

2.1. CPE, NPE and Neorealist critique

The roots of current external governance of the EU begin about 70 years ago. The emergence and consequences of the Second World War demonstrated that the Westphalian state order on the European continent did not function well anymore. Having experienced the bloodsheds of the first half of the 20th_{century, Europe needed a profound change of its approach to} international relations and foreign affairs. The old-fashioned system of self-centred nation states, whose sense of raison d’être was to ensure their existential security to themselves, was seen as an indispensable cause of the rivalry atmosphere on the European continent, which had so often sublimed to open violence. As a result of this new awareness, federalists, neo-functionalists inter alia believed that the discredited Westphalian order had to be dismantled and substituted by a new comprehension of international system.1 Its focus had to be directed to multidimensional progression through peaceful and non-coercive governance, derived from among others Immanuel Kant’s human universalism and cosmopolitanism. (Stevens and Sakwa 2005: 36-42; Keukeleire and MacNaughtan 2008: 8-9; Orbie 2009a: 6) One of the most influential concepts of foreign affairs based on Kantian assumptions was developed in the 1970s by François Duchêne (1973). Even though he has never developed a complete theory, he believed that Western Europe had evolved into a new ‘civilian’ power. According to Duchêne, Europe, having learned from its own tradition and history, distanced itself from the traditional power politics and, instead, adhered to ‘civilised’ and amilitary governance, based on multilateralism and cooperation, realised through economic, diplomatic

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and institutional means (Twitchett 1976; Hill 1990). Security concerns would become secondary to the promotion of a stable, non-divisive, non-argumentative international environment, beneficial to all parties. Furthermore, human equality, justice, tolerance, interest for the poor abroad and other characteristics derived from core European values have become important elements of Europe’s external activities, thus diffusing EU standards internationally. In this way, the Union committed to disseminating what it perceived to be universal, public goods (Keukeleire and MacNaughtan 2008: 21). Overall, as Vasilyan (2007: 4) put it, Civilian Power Europe (CPE) defines the EU’s nature, function, role, behaviour and narrative, all of which are based on the Kantian universalist discourse.

Similarly, Ian Manners (2002) introduced his own concept of a Kantian Europe – Normative Power Europe (NPE) by analysing Europe’s foreign affairs also from a value-based perspective. Although Manners agrees on the most basic assumptions about CPE, he complements it by citing the EU’s ability to construct norms in the international system through exerting discursive power over opinion and ideas. In this way he has tried to move the debate from considerations on EU’s international identity towards discussions on EU’s constructivist capabilities (Manners 2002: 239). In other words, the analysis moved from what the EU says and does to what the EU is (Vasilyan 2007: 4). Further, he stresses that both concepts of CPE and NPE differ from each other in the backgrounds of values adopted: whereas CPE has a merely communitarian or national nature, NPE claims a universal, transnational validity of its norms (Manners 2006: 176). However, according to some critics such as Diez (2005: 620), each civilian or normative power sees its own actions and values as universal and more legitimate than those of others. Nonetheless, Manners states that the EU’s normative difference originates from its historical context, hybrid polity, and political-legal constitution. The EU has been built in a pacifistic post-war environment where international violence was condemned and where political commitment enabled abandoning the Westphalian discourse. This moved Europe towards a hybrid sui generis kind of governance, consisting of supranational and international elements. Even though this new unit was elite-driven and its function has been restricted by conventions in a form of treaties, it has been profoundly regulated by a strong legal order based on post-war universal humanistic norms, derived from Kant’s ethics. Additionally, these norms are generally acknowledged within the UN system to be universally applicable, thus legitimising the NPE’s universal representation of human rights (Manners 2002: 240-242; 2006: 170).

Manners distinguishes two kinds of norms (Manners 2002: 240-242; 2006: 170). The first group is composed of ‘core’ norms (peace, liberty, democracy, rule of law and human rights), while the second group comprises ‘minor’ norms (social solidarity, anti-discrimination, sustainable development and good governance). Both categories are derived from the intention to protect and spread human dignity and equality. The difference between these two kinds of norms is, in Manner’s words, that the ‘minor’ group is ‘far more contested’ and unsettled than the ‘core’ group. Applying it to external governance, he further elaborates by stating that all of these

universal norms and principles [have been placed] at the centre of [the EU’s] relations with its Member States (…) and the world (…). The EU has gone further towards making its external relations informed by, and conditioned on, a catalogue of norms, which come closer to those of the European convention on human right and fundamental freedoms (ECHR) and the universal declaration on human rights. (Manners 2002: 241)

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The Union shall define and pursue common policies and actions, and shall work for a high degree of cooperation in all fields of international relations, in order to: (…)

(b) consolidate and support democracy, the rule of law, human rights and the principles of international law,

(c) preserve peace, prevent conflicts and strengthen international security (…)

(d) foster the sustainable economic, social and environmental development of developing countries, with the primary aim of eradicating poverty (…)

To sum up, Manners perceives EU’s governance through constructing and disseminating norms as an internal obligatory commitment to Kantian ethics and human universality. This in turn, naturally influences the Commission and Member States’ conduct of external relations (Orbie 2009a: 18).

As far as EU’s civilian and normative external governance is concerned, the EU is often described as a ‘soft power’. Next to actual and short-term oriented possession goals furthering national interests, the EU’s external governance is also concerned with milieu goals. As a result, the EU aims to shape international conditions beyond its boundaries, thus controlling the international environment in which it operates. These milieu goals arise from ‘what the Member States can all agree on’ (Smith 2003: 107, 109). Applied to the NPE, the most conventional form of such a milieu-oriented approach is a holistic, multilevel, multisectorial and multistructural method, evoking ‘a preference for incentives through development aid, market access, political dialogue, and persuasion in international affairs’ (Keukeleire and MacNaughtan 2008: 24, 25-28). It is also effected through trade, peacekeeping, multilateralism, different kinds of conditionality, some kind of association relation, enlargement prospects etc. As a consequence, universal human standards are disseminated, and global public goods are strengthened, thus benefitting the public welfare. Coincidentally, a new international environment is created, amenable to the objectives of the EU (Orbie 2009a: 13; Manners 2002: 244-245).

As an example, one of the most effective instruments/ends of CPE has been the Common/Internal Market. The EU is an extraordinary extensive and prosperous sales market with a relative high market price levels and voluminous consumption. Bretherton and Vogler (2006: 88) assert, that the magnitude of the EU’ Single Market has ensured that the EU can be seen as exercising a form of trade duopoly with the US. Hence, it is very attractive to non-EU countries to set for access to the Market in terms of export and investments. Consequently, as Orbie (2009b: 36) put it, ‘[t]he possibility to decide on the level and the conditions of access for particular countries/sectors to the world largest market [EU Single Market] constitutes a considerable source of power (…)’. To fully exploit this source of power, EU often maintains different types of bilateral agreements, where ‘for most of the participants in these bilateral arrangements the Union is frequently a domineering actor’ (Bretherton and Vogler 2006: 78). In this context and deferring to the EU’s normative mandate, the conditions for market access mainly concern peace and security (e.g. Everything but Arms initiative), human rights, political reforms, sustainable development, recognition and implementation of human equality through free trade and multilateralism and other norms central to the EU (Orbie 2009a: 17, 18).

Additionally, opening the Internal Market to a third party is usually accompanied by the rule of reciprocity, i.e. reciprocal opening of the third party’s market to EU’s exports and investment. Overall, as a result of this gatekeeping, international structures become gradually altered, which is beneficial to both the EU and its trading partner. The upshot of healthy free trade is the

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propagation of the EU’s norms beyond borders, thus influencing human rights and instigating an environment conducive to the Commission’s long term economic strategies. Simultaneously, welfare, democracy, human rights etc. situation is believed to enhance (Orbie 2009a: 4-8). This explanation of the EU as a civilian and normative power has raised many criticisms. For example, in his critique of Duchêne’s concept of CPE, Bull (1982) suggests the latter’s conclusions are

contradictio in terminis, since Europe’s civilian commitment, its abrogation of the Westphalian

order resulted from the transference of its defence obligation to the US, NATO’s hegemonic player. Hyde-Price (2007) labelled EU’s norm conditionality vis-à-vis countries of post-communist European countries in the 1990s as creating a temporary hierarchy in Europe through political ostracism and an economic carrot-and-stick approach, where EU membership was the carrot and exclusion the stick. Other critics assert that a similar structure exist between the Union and developing countries. Youngs (2010: 6) insists that ‘[t]he EU’s “civilian power” has morphed into a “soft imperialism” that imposes norms in an inconvenient fashion in furtherance of very direct short-term self-interest.’ Orbie (2009b: 45) states that despite its commitment to multilateral free trade, the EU’s admission of goods to the Internal Market subjects to protectionist tendencies, without emphasising value. The Union’s sugar policy can serve as a good example of such behaviour (Baldwin and Wyplosz 2009: 366). Orbie (2009b: 62) concludes that the ‘[r]ise of value-based objectives in inter alia Europe’s trade policy profile appears to be a normative dressing over a free trade agenda (…), rather than a genuine commitment to reach these [normative] objectives’, where, as will be later explained, free-trade agenda can be seen as a key element of the EU’s most favourable international environment. Wood (2009) claims that the EU’s projection of its norms and values to the Third World has not always met with success. He argues that if the Commission’s advances are rebuffed by the potential recipient, or if it needs more from the recipient, than vice versa, it seems powerless to effect a resolution. To sum up, some scholars argue that the Kantian-normative rhetoric does not always correspond with the actual performance of the EU.

A more radical view, put forth by Johan Galtung, perceived the establishment of the European Common Market equipped with civilian governance as a major self-centred and protectionist step, returning Europe to a highly global political global presence through its manipulation of the economic and political environment, and its resultant exploitation of power. Beyond the EU’s borders, many countries were embroiled in upheaval, social unrest and ideological change. Such preoccupations facilitated the realisation of the ‘non-military formula for empire building’: Europe was creating a hierarchic or asymmetrical relation between the Common Market members and some others, especially those in the Third World, even though no military means had been employed. Galtung (1973; Orbie 2009a: 6-7) concluded that true civilian content of Europe’s governance was merely illusionary.

Realists have also entered the fray. While most of them insist that the bloc’s focus on liberal values is utopic, even harmfully naïve, some such as Robert Keohane (1984: 122) perceive the EU as a realistic player despite its value-loaded rhetoric. He stated that cooperation inherent to both civilian and normative power, factoring collective interests and leading to apparent win-win scenarios, is just a matter of necessity and efficacy in a the international environment of the 21st_{century. More importantly, he interpreted it as a far-sighted self-interest rather than any} kind of idealism and naïve altruism. Similarly, Keukeleire and MacNaughtan (2008: 21-22) have argued that the protection and extension of global public goods such as environment, health and social areas are in the primarily of place self-regarding interest and, therefore, of secondary

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benefit to other stakeholders (other-regarding interests). Thus the civilian governance agenda serves the EU as a tool to alter the international milieu, primarily serving the EU’s own interest. Based on this conclusion, this win-win situation is not a logical consequence of normative governance, but rather a possible side effect. Consequently, they insist that the EU’s liberal internationalism is a mere cloak for the maximisation of its self-interest (Youngs 2010: 1).

With respect to Realists’ criticisms, Sandra Lavenex argues that the recent developments of the EU denote its ambitions to reassert its identity as a security community. She ascribes this paradigmatic shift to a sequence of institutional changes inside the EU itself initiated in Maastricht in 1991, and to the transformed international environment after the end of the Cold War. Firstly, the EU has had to cope with a new multipolar world order, substituting preceding bipolarity. Secondly, during this period, the geopolitical system of the USSR and its satellites was dissolved and Yugoslavia fell into civil war – all of which was happening just next to the EU’s borders. Thirdly, besides these developments, globalisation began to manifest itself through diverse transnational processes all over the world and within the EU itself (Stevens and Sakwa 2005: 237-247) These new and sometimes unanticipated processes and developments ensured that the EU’s mainstream perception of interdependence was changed substantially. Importantly, Lavenex (2004) argues that interdependence and mutual vulnerability, in particular between the EU and its neighbourhood, has begun to be observed as a potential source of threats to security. Subsequently, these threats began to ‘play a central role in the legitimation of political order’ (Lavenex 2004: 682-685), gradually substituting the prevailing institutionalist perspective (chapter 1). Overall, the EU might have been behaving as a civilian power, but because of geopolitical changes, globalisation and internal institutional developments, the present EU’s governance has been increasingly focused on security issues in order to preserve its own security.

Within this framework, the EU has aimed to secure its interior, its borders and neighbourhood through a series of enlargements, the introduction of European Neighbourhood Policy, combined with international dialogue. An inherent part of this border extension has been a full of partial adoption of the acquis communautaire, where EU’s norms and values play a central role. Crucially, Lavenex understands this border extension as ‘not only a benevolent projection of acquired civilian virtues but also a more strategic attempt to gain control over policy developments through external governance’ (Lavenex 2004: 682-685). In this way, trans-border features threatening the EU’s security, such as environmental hazards, illegal migration, trafficking, terrorism and various illegal practices can be effectively combated through internalisation by the EU itself:

The EU will try to expand its sphere of governance in particular in areas which have become securitized inside and where vulnerability is attributed to developments in the third country in question. (…) [However,] securitization from this perspective does not directly derive from objective external threats but is the outcome of framing processes within an evolving institutional environment. (Lavenex 2004: 686)

To conclude, Sandra Lavenex argues that recent EU’s governance has been backed by securitisation of EU’s external dependence constructed inside EU institutions.

More generally, it has been observed by some that the EU’s claim to be a civilian and normative power, while implying benevolence, have in fact been a significant factor in the pursuit of its own self-interest. Thus, this perception that the ability to sustainably shape and reshape structures of

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the international environment by means of civilian self-obligation and designing valid norms, is crucial to the bloc’s self-preservation in the international power struggle. Realists, therefore, state that the concepts of CPE and NPE are subordinated to more essential, self-regarding interests of the EU. The next subsection links these realist conclusions to EU’s external energy governance.

2.2. External energy governance

External governance mainly appears in areas where the realisation of internal objectives has external implications. Since Europe has been only limitedly endowed with energy sources, Europe has had to rely on a variety of imports of raw energy sources, such as conventional crude oil, natural gas and, recently, coal. Since the current European society has so far become highly dependent on energy, ensuring energy inflow has evolved as an important concern of Europe’s external governance. The main objective of this section is to analyse EU’s energy governance in the theoretical context sketched above – a realist approach to the concepts of civilian and normative power. It will be revealed that the realist critique is applicable to the EU’s external governance, since it is primarily oriented towards energy supply security.

Energy issues as a part of Europe’s governance is not a new topic. The main reason why energy has been a subject of supranational governance has been the perception of energy as a security issue, since energy, like food and water, is a basic fundament for the functioning of a modern society. In other words, energy governance derives its raison d’être from ensuring security of European society. Integrating energy in Europe first appeared in the post-war 1950s, when ECSC and EURATOM were launched (Belyi 2009: 205). However, the main objective of these two projects was internal coordination rather than external governance. It was not until the early 1970s, with the advent of two major oil crises, that energy was explicitly included as a security concern in Europe’s foreign policy. Nevertheless, even though Brussels began to push for a common policy dealing with the security situation at a supranational level, ‘the political effect of the crisis was translated into the nationalisation of energy policies’. As Belyi (2009: 205) put it, ‘since the oil crises, European energy policy as regards the question of supply and market regulation has been removed from the political agenda of the European treaties establishing and reinforcing the EU’. Consequently, no Common Energy Policy has been enforced up until now. Only in 2007 did the European Council take a little step towards it, when it legislated that energy issues were to acquire a limited legal basis in the Reform Treaty of Lisbon (Article 194). Yet the scope of this legislation is predominantly focused on the internal situation, with less emphasis on the external. In fact, the external dimension does not even merit an explicit mention in the Reform Treaty. Overall, the security of energy supply, though a subject of European integration since its very beginning, seems to remain predominantly a matter of the Member States (Belyi 2009: 204-206).

Despite the lack of Common Energy Policy, and a lack of inflow governance, the Union endeavours to compensate through enacting measures internally as a response to external geopolitical developments. However, prior to expounding on these measures, it is a prerequisite to examine global energy developments and their impact on the EU. Firstly, global demand for fuels has been growing, especially due to emergent major players such as China, India, Brazil and other developing and post-developing countries (Verrastro etc. 2010: 14). Secondly, the EU has

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become increasingly reliant on imports from and throughout unstable regions, such as the Gulf States, Venezuela, Nigeria and Eastern Europe. The Eastern Enlargement in 2004 added to this dependency, since the majority of the twelve admissions had been historically reliant on Russia for their oil and gas needs. The consequences of conflicts in Iraq and disputes between Russia and the Ukraine in 2006 and Belarus in 2007 revealed the extent to which the EU is vulnerable in this matter. According to general expectations, this weakness will not soon be rectified. Rather, ‘[t]he EU’s import dependency for oil was set to increase from 52 per cent in 2013 to 95 per cent in 2030, and for gas from 36 to 84 per cent over the same period.’ (Youngs 2009a 1-2) Realists have warned that the alarmingly growing dependence has provided the energy supplying countries with leverage over the EU while it deprived the EU of leverage over the suppliers, thus having significant consequences to EU’s international position and balance of power.

Thirdly, Russia is able and willing to use its energy resources as a political weapon in order to consolidate itself as an ambitious superpower. This invariably has created an atmosphere of distrust and uncertainty of supply in Europe (Khrushcheva 2011: 218-219, Interview 2). Fourthly, since the energy supply (particularly crude oil and natural gas) is currently stagnating and is not expected to meet the increasing demand in the future, energy prices have been rising significantly (Natorski and Surrallés 2008: 71-89. 72). It is important to mention that Western society has been built on cheap energy. However, for example 2009 oil price levels compared to 2008 were doubled. Importantly, high and volatile energy prices might negatively affect Europe’s future growth and competitiveness. Only lower demand or higher supply could cause the price to fall to its original value, neither of which is likely to fall when price fixing is at the whim of the producer states (Luciani 2011: 4-5). Further, there are also energy transit routes which might potentially grow but their overcrowdedness does not make it possible. Also, in some cases, even though the natural endowment of energy sources could be still seen as immense, it is impossible to access and extract them, because of insufficient technology levels or inacceptable impacts on environment (Verrastro etc. 2010: 3-7, 11-14). Fifthly, it has been proved that production of CO2 through energy generation in thermal power plants is one of the main causes of global climate warming, implying that something must be urgently changed in the whole energy sector (IPCC 2001a). Overall, the energy sector is facing great challenges, demanding a more comprehensive policy in dealing with them.

The EU has already determined such a broad strategy. Since it can be involved in the energy supply governance only through Member States, this strategy is focused on

 building the internal energy market through sectorial liberalisation and enhancements of inner, inter-state infrastructural interconnections, such as Trans-European Networks in electricity and gas, gas and oil energy storage

 promoting diversification of energy mix in terms of routes, supply countries, and resources, with a particular focus on renewable energy

 demanding control through energy efficiency and saving  investment in R&D

all of which are meant inter alia to secure energy supply EU-wide, thus strengthening mutual solidarity among the Member States (Lahn etc. 2009: 11-12; European Commission 2013). Next to the clean energy discourse described in the following chapter, market liberalisation has become the key element of the EU energy strategy.

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Not surprisingly, the Commission is the main normative promoter of market liberalisation, being supported by its neoliberal background, free-trade orientation and commitment to value and rule-based, ‘effective’ multilateralism (Hermann 2007: 61-89). According to the Commission, non-market approaches, such as state-like and monopolistic structures and individual bilateral agreements between Member States and energy supply countries, are economically inefficient and lead, as a result of lacking competition, to unstable and unpredictable supply flows, growing dependence, price volatility, contractual mismatch between supply and transit contracts (De Jong 2012a: 3) and, consequently, loss of competitiveness, etc. Hence, the Commission believes that negative consequences of any supply disruption can be diminished by the market, flexibly offering energy from alternative suppliers. In this way, the exploitation of the EU’s energy sources and market potentials could become much more efficient. Citing Nicolas Jabko (2006: 92), ‘[t]he European Union, and especially the European Commission, stepped into energy politics and regulation by becoming the watchdog of liberalisation’. Subsequently, the Commission has pushed for unbundling of energy production from energy transmission or other kinds of unbundling, rationalised by Barosso as follows:

If a company sells electricity and gas and at the same time owns the networks, it has every incentive to make sure that its competitors do not get fair access to “its” grid. This includes, of course, refusing to build the new lines and interconnectors that will bring more competition on its home market. (RAPID 2007)

Consequently, national champions and international giants of the EU were to be dismantled, removing destination restrictions and offering more space to free trade, and competition and all benefits related to it. This process would necessitate a comprehensive involvement of supranational coordination, possibly leading to Common Energy Policy, so much desired by the Commission. Moreover, through linking liberalisation with energy security, the environmental protection and climate change, social cohesion, economic competitiveness and other policy topics, the Commission hopes to perform more efficiently. Not only are different objectives achieved simultaneously but the outcomes are likely mutually supportive and synergic. For example, linking energy market liberalisation and combating climate change, energy dependence, falling competitiveness and rising unemployment, this transition offers a solution to these problems areas (see chapter 3). To sum up, the Commission is convinced that the market approach will provide the EU with sustainability, security, diversity in energy supply and mutual solidarity, while excluding the negative sides of bilateral agreements. (McGowan 2008: 90-95; Natorski and Surrallés 2008: 75-77)

However, the process of market liberalisation has proved to be extraordinarily protracted due to a lot of reluctance or even resistance from some nation states. Francis McGowan states that re-emergence of national security thinking in energy can be observed since 2006 as a reaction to the recurrent disruption of energy supply from Russia through the Ukraine and Belarus. As in the 1970s, the post-2006 supply crisis has led to nationalisation of energy security. Opponents argue that liberalisation or even subsequent Europeanisation of energy governance would deprive nation states of the existing energy supply security by diminishing individual negotiation power in energy matters vis-à-vis supply countries, in which the loss of strong national energy champions would play a crucial role. The Commission’s incompetence in resolving the various energy crises in the late 2000s merited such criticisms.

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Therefore, it can be concluded that countries, where energy imports based on bilateral agreements have had a long history and have been, yet, seen as relatively reliable, where energy import dependence is high, where national champions are still cherished and where little Europeanisation spirit rules, oppose the Commission’s liberalising approach, such as France, Germany, Austria, Bulgaria, Cyprus, Greece, Latvia, Luxembourg, Slovakia, the UK. Some of these countries, such as France, Germany and Italy are even direct opponents of intergovernmental cooperation, transparency and information-sharing on bilateral energy deals since security of energy is, according to them, an exclusive concern of their national governance (Youngs 2009a: 34-38). Lithuania and Latvia are prime examples of how dependence on an energy supply monopolist and the consequent fear of upsetting their supplier weigh heavily on their stance towards EU liberalisation policy (Interview 2, 3). Such resource nationalism thinking is, according to McGowan (2008: 99), demonstrated by similar tendencies in Africa, Latin America and Central Asia. Only countries, which have a strong belief in virtues of the market liberalisation, and countries which are strongly self-interested in deeper integration, such as Spain, Lithuania (Interview 2) etc. support the liberalisation and subsequent Europeanisation of the energy sector.Consequently, there is very little unity perceivable in the energy sector among the involved parties of the EU.(Youngs 2009a: 36-39; 2010: 113; De Jong 2012a: 5)

Olga Khrushcheva (2011: 218) calls this disunity as ‘alarming incoherence’. Whereas some wish to liberalise and further Europeanise their energy sectors, others see such developments as unnecessary or even as inconceivable and essentially dangerous. Next to these positions, as McGowan (2008: 99) states, some countries (the Netherlands and the UK) do support liberalisation but oppose Europeanisation. It is not startling that such a diversity of internal preferences among 27 Member States has very negative consequences to the external leverage of the EU as a whole. Such internal inconsistency provides rivals with an opportunity to take advantage. The lack of cohesion seriously undermines the collective bargaining power of the Union and smaller and energy dependent Member States vis-à-vis energy supply countries and major energy supply companies, while improving their negotiation power vis-à-vis the EU. Thus with the abatement of negotiating power, the diffusion of the EU’s norms and milieu goals is seriously compromised, and even is some quarters encounters complete resistance. In this way, the asymmetrical relationship between the EU and its partners/rivals determines, what the subjects of negotiation are and to what extent the EU can exert influence over these negotiations (Kasčiūnas and Vaičiūnas 2007: 49). So, internal incoherence and disunity among the Member States deprives the EU of a significant share of its external leverage.

With energy liberalisation being a milieu goal, Youngs (2010: 111) states that ‘[t]he rules and regulations of the internal market are defined as the key foundation to the EU’s international projection in energy matters.’ By exporting its own model of free trade and calling it as a European value or norm, the EU aims to adjust the international environment in order to reach its self-centred security objectives. The EU is handicapped by its monopolistic suppliers, who, because of their vast natural resources capabilities, are able to wield an great array of power and influence on it and its Member States. Investment opportunities of the supplier states in the Internal Market often exceed those available to Europeans in these said states (Kasčiūnas and Vaičiūnas 2007: 50). Unlike the situation in countries which have partly or fully adopted the

acquis communautaire, the free market idea has found significantly fewer supporters in the most

energy producing countries (McGowan 2008: 98). The Chatham House researchers (Lahn etc. 2009: 5, 22) conclude that ‘countries with energy resources are resistant to the predominant EU

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model of market governance because they perceive it as operating in their comparative disadvantage’, being bolstered by the ‘asymmetry of market between producer and consumer countries in favour of the former’. Sijbren de Jong (2012a: 3) emphasises, that unbundled and liberalised supply markets imply less demand stability for the suppliers. Therefore, it is little wonder that the supplier states balk at embracing liberalisation. The EU’s inability to gain the upper hand in bargaining can be attributed to its chronically high energy dependence and the preferences disarray that permeates its Member States. Overall, it can be concluded that the EU’s liberalisation efforts in supply countries have proved to be predominantly ineffective. (Belyi 2009: 208-211, 209)

The failure of dissemination of the liberal market approach in energy as one of the European values is best represented by Russia’s position towards the Energy Charter Treaty. The ECT ‘is designed to promote energy security through the operation of more open and competitive energy markets, while respecting the principles of sustainable development and sovereignty over energy resources’ (Energy Charter: 1994 Treaty). Then special attention must be paid to the so called Transit Protocol, an essential part of the Treaty. Its present form

would address critical issues for energy transportation networks, in particular the conditions for access to networks and the stipulation that tariffs charged for energy transit must be objective, non-discriminatory and cost-reflective. (Energy Charter 2004: Energy Transit)

This article advocates market liberalisation through unbundling the market chain, dismantling those structures that might inhibit free trade. It suggests free access to energy extraction and production and other investment possibilities. Consequently, bilateral agreements would have to be replaced by free market logic. However, since the monopolistic character of the Russian energy sector appears to be politically advantageous more to Russia than to the EU, especially in times of higher energy prices (Luciani 2011: 6-10) and alarming EU’s internal incoherence (Kasčiūnas and Vaičiūnas 2007: 48; Luciani 2011: 6-10), Russia is provided only little incentive to participate in this liberalisation process.

Participating in liberalisation would deal a body blow to Gazprom, a powerful Russian monopolist and Moscow’s weapon in holding the EU to ransom. Despite being a signatory to the Energy Charter Treaty (1991/1994), Russia never ratified it, thus negating its implementation. In the language of realism, the EU has no sufficient leverage to compel Russia to implement liberalisation in the energy sector. Russia’s huge resources allow it to repeatedly spurn the advances of the EU (Belyi 2009: 211-214; McGowan 2008: 97-99). When it became clear that the Energy Charter was not in effect in Russia, the 3rd_{Energy Package was introduced in 2007 (in} force 2009). The EU perceived this as a tool to ‘open the internal energy market in exchange for access to foreign markets, also allowing for the protection of the internal market against those states that have not liberalised their energy sectors in equal measure’ (De Jong 2012a: 2). Barroso stated in 2007:

[W]e need to place tough conditions on ownership of assets by non EU companies to make sure that we all play by the same rules. This is about fairness; it is about protecting fair competition. It is not about protectionism. (RAPID 2007)

However, Russia and others understood it as legally incompatible with the EU-Russia partnership and cooperation agreement provisions on non-discrimination, and thus very disadvantageous to them. Since the reciprocity clause would have directly negative

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consequences to Gazprom’s market share in the Internal Market, Russia saw it as depriving its companies of a large share of profits. Subsequently, Russia reacted by adopting regulatory measures in 2009 disadvantaging non-Russian companies, maintaining the monopolistic character of Gazprom and regulating out European energy giants, such as BP and Shell, from the Russian market. Algeria, with its state supported monopoly Sonatrach, supplies 18% of the EU’s gas, adopted a similar stance to that of Russia. Consequently, both Russia and Algeria have so far ignored the reciprocity clause. They see no need to unbundle particularly when the EU itself does not appear to implement unbundling internally. Also, the EU has abandoned its liberal argument to defend itself from external energy monopolist giants by liberalisation and unbundling. As Sijbren de Jong (2012a: 5) puts it,

In the energy relations between the EU and Russia, reciprocal market access remains one of the thorniest issues. (…) [i]t is fair to assume that hitherto Brussels has had little leverage in Moscow to persuade Russia to change its position on the matter.

Basically, the EU does not seem to be equipped with sufficient capacity to disseminate its market norm beyond its borders. As a soft power, the EU is unable to change the international milieu. (De Jong 2012a: 2-3; McGowan 2008: 97-101; Youngs 2010: 113)

Furthermore, the EU’s dissemination of human rights and the rule of law through its external energy policy has been non-convincing and ineffectual. The Commission has been extremely cautious in its dealing with producer states, where human rights violations are prevalent, thus putting its self-interest above the very values in claims to espouse. Andrei V. Belyi (2009: 208-209) states that EU’s energy security strategy makes an exception to the EU’s appearance as a postmodern civilian and normative power. For example, in the Gulf States, Belyi argues the EU is ‘unable to wield any influence comparable to that of the US’. As a part of its institutionalised relations through the Gulf Cooperation Council, only security cooperation, arms sales and free trade topic belongs to the subjects discussed, while other European values and norms are usually excluded and ignored. Further, moving to Latin America, where Venezuela prefers to set stronger national control over energy resources, the EU does not dare to push for implementation of its norms, since the existing relationship between Venezuela and the EU is already very frail (Youngs 2010: 115, 120). Furthermore, the Commission has been supervising the construction of the new gas pipeline Nabucco from Azerbaijan and also from Turkmenistan to Europe, two countries characterised by a large democratic deficit. However, Sijbren de Jong (2012b) asserts that it has become clear that human rights, in particular the rule of law and democracy have been decoupled from the EU deals in the gas-rich Central Asian countries. It has been generally advised that

‘the Union should rather take a pragmatic stance and position itself better compared to Russia and China who managed to seize opportunities, which the EU had largely missed’ prevalently because of its inconsistent insistence on human rights reforms. (…) If the EU is serious about its attempts to secure Turkmen gas – or other sources for that matter – an approach whereby priority in the short to medium term is given to engagement through hydrocarbon cooperation gains increased legitimacy through the argument that Russia and China do not play by the same rules.Moreover, it is safe to say that after acquiring a gas contract, Moscow and Beijing are unlikely to care much about democratic reform in the region. (De Jong 2012b: 5-6)

A gas pipeline from Turkmenistan to China has been already finished and put into operation. So, put simply, if the EU conditions its interest in Central Asian and Caucasian gas by the

Clean energy transition of the EU: green power means in the international system