With Hungary due to take the EU Presidency in almost six weeks preparations are nearing their final countdown. One of the top priorities outlined by the Fidesz government has been given to energy security. Earlier this week it was revealed that a key European Council energy meeting will take place between EU heads of state and government on February 4th in Budapest. The meeting is expected to focus on security of supply. This will be followed on May 26 with a summit devoted to the Eastern Partnership where secure transport routes and infrastructure development are expected to be discussed.
This week I caught up with Dr. Michael La Belle academic researcher and Managing Director at Limax Energy to discuss Hungary’s energy security strategy and how it hopes to influence the EU energy agenda.
The Prague Post ( TPP): The Hungarian Presidency has made energy security a priority for its upcoming EU presidency, why is this so?
Michael Le Belle (MLB) Two main reasons. First the geographic position of the county. They have the gas pipelines coming through Hungary, increasing gas storage facilities and an electricity infrastructure that is central to both the South East and the Central European region. Due to this geographical position it can become an energy hub.
Second in external relations for gas, their interdependency is quite low, but dependency on Russian gas high. They are building the interconnectors but they can build more. North South interconnectors are especially important because currently they don’t exist.
TPP: In terms of energy security here in Hungary have we seen any concrete proposals from the Fidesz on the issue?
MLB: Right now the energy strategy for Hungary is in development. An outline of the new energy strategy should come out in a month or so. That means that even now when Hungary takes over the Presidency it will lack a well defined energy strategy.
This is a problem because it will make it much harder to elevate the energy concerns of Central Europe. Right now they need specific infrastructure proposals; Energy is top priority after all. But I’m optimistic that they will have a more developed plan for energy efficiency.
TPP: A conference on security of supply has been earmarked for February. What is the position of the Fidesz government towards the issue?
MLB: Before they were in power Fidesz really wanted to diversify away from Russia. Now that they are in power the question is are they ready to follow through with the infrastructure that is necessary. Now I have my doubts. How they promote the Presidency is really important because its sets the tone for the CEE region.
TPP: Increasingly we are seen energy security being dealt with at a regional level through the Visegrad 4 forum, why have we seen a revival of this forum?
MLB: It’s a specific bloc within the European Union and they haven’t coordinated their efforts on the energy issue well in the past. There are a lot of commonalities and areas for co-operation. They have talked about it but they really need to get down to building the projects
TPP: And do you welcome the revival of the Visegrad four platform?
MLB: It is absolutely essential. They have common interests
TPP: What do you think was the catalyst for the revival?
MLB: The sentiment existing before the Ukrainian- Russian gas crises of 2009 but was never really an issue so 2009 was the catalyst.
During the crises Hungary was hit but it had gas storage. Some of the buildings and stores turned off the heat to preserve the gas but it didn’t trickle down to the public to bad. Since then Hungary has made efforts to promote a regional approach but the EU really hasn’t given much money. There has been some movement but not a lot
TPP: In terms of gas, the Southern Corridor pipelines are seen as vital for Europe to diversify. Currently two pipeline projects largely seen as competitors to each other South Stream and Nabucco are being worked on. Unlike most EU states Hungary is committed to supporting both pipelines, why is this so?
MLB: They support both projects because they have to support both. From a business perspective they support Nabucco, from a political perspective South Stream has to be supported too. Hungary’s ties with Russia are still there so supporting South Stream is fine with the Hungary. You can ask if it is in the best interests of the country but politically they have to go along with it.
TPP: But are the projects not rivals?
MLB: Of course they are rival projects in the short term. Over the long term the demand is projected to be there. But the larger question involves security of supply, and how much countries want to be dependent on Russian gas.
TPP: And personally do you think Nabucco will ever be built?
MLB: I think it will be built as it is commercially and political viable. They just have to secure the upstream gas probably from Iraq and Azerbaijan.
Cillian O’Donoghue can be reached at codonoghue@praguepost.com
Michael La Belle writes regularly on energy issues. His energy blog analyzing energy investments, policies and regulations in the SCEE region can be accessed at http://energyscee.com/
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