Russia Is Steering Towards Energy Escalation with Europe. What Should Moldova Expect?

Sergiu CEBAN

The Russian-European gas war is almost inevitable. There are calls for the European Union to prepare for complete cessation of supplies already next winter

Yesterday, the government approved a proposal of the Emergencies Commission to extend the state of emergency for another 45 days from 24 June. Among the main arguments to support such a decision was the continuing risk of blackouts in the country. And in case the state of emergency is extended, the Commission will, in theory, be able to quickly step in and take measures to ensure the country’s energy security. To a certain extent, this move is justified because the situation on foreign markets, to put it mildly, leaves much to be desired. The recent drastic reduction in gas supplies to Germany through the Nord Stream pipeline seriously alarmed EU countries. The daily flow volume was reduced by almost 60%, and the gas futures price soared to $1,500 per thousand cubic meters. Despite the fact that the formal reason is the failure to repair Russian turbines, affected by the sanctions, some experts say that Moscow consciously wants to aggravate the situation in order to stir up the market and drive up prices and, consequently, boost its revenue. Moreover, Gazprom has not booked additional capacity in Ukrainian pipelines for July and is apparently tightening its political stance in relations with European consumers. Simply put, the logic behind these actions is that Europe should prove it is ready to give up Russian gas, something that Brussels has been actively relaying for the past six months. Thus, the Russian-European gas war predicted by experts is seemingly becoming almost inevitable and is gradually taking shape. So it is not surprising that yesterday the head of the International Energy Agency Fatih Birol called on the EU authorities to brace for a total breakdown from Russian gas and the cessation of supplies as soon as next winter. The Kremlin has already cut off supplies to Poland, Bulgaria, the Netherlands, Finland and Denmark after they failed to meet Moscow’s financial demands. Under such circumstances, many countries are planning to restart coal-fired power plants. True, this hits hard the European “green agenda” and plans to completely abandon coal along with reducing greenhouse gas emissions. It’s quite reasonable to ask what Moldova should expect from Russia, given the Kremlin's principled intention to escalate the energy situation and raise the political stakes. Last week, Prime Minister Natalia Gavrilita once again expressed the hope that Gazprom would not stop gas supplies, despite our failure to meet obligations to audit Moldovagaz’s debts. Although the government has not cancelled the financial audit and is trying to find a reliable company and decide on the audit mechanism, Russia remains dangerously silent and does not respond in any way to Chisinau’s requests. The head of the government, of course, has to sound as optimistic and encouraging for the population as possible, but this kind of relationship with Gazprom does not augur well. So far, it is not particularly clear how Moldova will be supplied with electricity. The current contract has been signed for one month only. According to the premier, negotiations with MGRES and Ukrainian companies continue, and the main point of contention for obvious reasons is the price. It seems that we have an opportunity to sign a medium-term contract with Ukraine, but despite politicians’ statements about their willingness to pay the Ukrainians, we still give priority to the Cuciurgan power plant, which can offer a much better price. But its management does not want to sign a long-term contract yet. Maia Sandu claims that she sees no connection between the energy crisis and our intention to become a candidate to the European Union. However, the connection is still there. Politics and economy always work in tandem, especially now. It is no coincidence that the Moldovan file has reappeared on Lavrov’s desk, who said that our country risks being turned into “another Ukraine”. In addition, Moscow is strongly offended by the Moldovan leadership’s alleged “consumerist” approach only wishing to draw maximum benefits from the process of European integration and participation in the CIS while “extorting” favorable terms from Russian suppliers of energy resources. These sings surely demonstrate the Kremlin's position becoming firmer able to lead to practical measures in the near future. The euro candidate status stage will pass by quickly, becoming something commonplace, just like the signing of the Association Agreement with the EU. But the energy crisis in the world and on the European continent is a long story that we cannot escape. Both the President and the Prime Minister understand this and urge the citizens to be prepared for a harsh winter. Indeed, given the amount of circumstances and negative factors experts can only make rather unsetting prognoses, including those concerning our country’s energy security. The government doesn’t seem to deny the looming “energy tsunami” and hurries to stockpile resources in order to avoid a deadlock. To date we only reserve about 24 million cubic meters of gas. If the supply from Russia is cut off, that is enough for a month in summer or about a week in winter. That is why, according to Natalia Gavrilita, Moldova proposed that the European partners set up a separate subsidy fund to reduce the negative impact of energy price hikes. Moreover, our Cabinet of Ministers is negotiating with the European Bank for Reconstruction and Development a loan of 300 million euros to fill up the gas reserves. It is also planned to develop a program of supplying the people with firewood. In addition, they are apparently looking for alternative gas suppliers. Judging by our delegations’ visits, Azerbaijan and Qatar are considered as possible options. However, we know that these countries’ stock volumes cannot allow export yet; every last bit has been preordered for years to come. Also recall how during the recent joint session of the two parliaments the Romanian MPs promised that Bucharest will not leave us in trouble and will try to provide us with energy carriers. But despite our Romanian and European friends’ sincerity, I would not be wrong to say that if anything happens, they will surely save themselves first and foremost.