Call for Energy Governance in EU-Russia Gas Relations: Legal Solution to a Geopolitical Problem?

Natasha A. Georgiou, University of Reading

The EU-Russia energy partnership is a highly strategic relationship that has profound implications for the international arena as far as energy security and stability are concerned. The Ukraine crisis and subsequent sanctions brought this realization to the fore, with the future of this strategic partnership hanging in the balance. Bilateral relations have come under increasing pressure in recent years, following a series of trade disputes and supply disruptions, bringing Russia’s reliability as a trade partner into question. Tensions have been further exacerbated by Russia’s withdrawal from the ECT which has effectively rendered energy cooperation based on political dialogues and commitments that lack legally binding norms regarding investment protection, transit and dispute resolution.  With the likelihood of a revised bilateral framework unlikely following the EU’s suspension of all talks in response to Russia’s illegal annexation of Crimea, the basis of legal ties between these two powers has been brought into question. However, with Europe heavily dependent on Russian energy resources, the EU has a vested interest in resolving any conflict for the purpose of keeping Russia firmly entrenched in the global trading system. Strong interdependence and mutual interest mean that energy remains a strategic sector within which relations can be further developed for an EU-Russia energy partnership.

The proposed paper will look at current EU-Russia relations in the energy field through the prism of international law. The methodology undertaken will therefore include an assessment of the legal infrastructure in place and the relevant instruments regulating energy. As a broad topic too extensive to cover in its entirety, the paper will limit its scope by focusing on energy relations in the gas sector and will scrutinise the legal aspects of this strategic relationship specifically from a trade and investment protection perspective. By identifying the major legal challenges which have inhibited any constructive engagement between these two powers, the paper will assess to what extent these recurring issues can be addressed moving forward. The paper will argue that one of the predominant problems and ever-prevailing issues in EU-Russia energy relations is the fact that there is no solid over-arching international legal framework regulating energy in international trade and investment between these two powers which has subsequently resulted in a void in the legal infrastructure.  As a result, there is a deficiency in the legal framework in terms of an effective legal solution for recurring disputes and security of European energy supply. Other simmering issues include the absence of reciprocity in energy market access and the lack of coherence in external EU energy relations. These issues are interrelated and closely affiliated to the need for a revised bilateral and international legal framework, as diverse positions and a lack of cooperation amongst member states undermine collective EU actions and legislative initiatives. Inevitably what the paper will try to advocate is that a solid legal framework between the EU and Russia will help stabilise relations between both parties by preventing any trade disputes and supply disruptions, which would ultimately diffuse any potential threats and an imminent gas crises. Nevertheless, it needs to be stated from the outset that, whilst the paper will propose that a revised legal framework can facilitate security of energy supply through legally binding provisions and an enforcement mechanism that prevents trade disputes and supply disruptions, it will not purport to suggest that this will provide a blanket solution to all issues in EU-Russia relations which are in essence, geopolitical at heart. By examining EU-Russia legal relations through a wider geopolitical lense, the paper will shed light on the dynamics of this strategic energy partnership and its effect on the global arena.

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