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Event Summaries
December 20, 2016

Event Summary: ‘The Black Sea: A New Energy Source for Western Europe?’

by
Henry Jackson Society

On Tuesday 12th December, the Henry Jackson Society welcomed David Buchan and James Wilson to discuss the Black Sea region’s ability to supply energy to the West. James Wilson is the founder of the EU Romania Business Society and David Buchan, who spoke first, is a senior research fellow at the Oxford Institute for Energy Studies.

The talk opened with a brief discussion of the implications of a Donald Trump presidency for European energy supply. Unlike previous US administrations, Buchan noted, Trump seems to have an affection for Russia. This means he will likely not be bothered if the European energy market is dominated by Russia. If this is the case it will preclude any strengthening of Black Sea oil that, at the present, requires greater investment.

Buchan then briefly discussed the dependency and vulnerability of energy supplies in EU countries. The UK is, for example, oil dependent as it requires imports. It is not, however, vulnerable as it does not receive all of its oil imports from one country. This is in contrast to the Baltic countries, Finland, Slovakia and Bulgaria that receive the entirety of their energy supplies from Russia. Buchan’s solution to this vulnerability was simply to diversify their sources of energy. Given their proximity to Romania, and the burgeoning energy industry in the country, Buchan argued that those countries could begin to purchase energy from the Romanians.

This was a fitting final point to make as James Wilson continued on the subject of Romania by arguing that it had great potential for the future. He noted that it is oil independent and only has to import 17 percent of its gas. Significantly, the majority of this gas comes from Kazakhstan and not Russia. Wilson argued that Romania’s position on the Black Sea would enable it to be a crossroads between East and West, allowing for EU countries to purchase energy supplies from countries in Central Asia, like Kazakhstan or Azerbaijan, and not Russia.

It was also noted that Romania itself also has a large oil industry and discoveries of natural gas and oil have been made off the Black Sea coast. With more investment, Wilson argued, Romania would be able to supply much of the EU with energy. Although this would be a net benefit for all of the EU, it would be especially so for the vulnerable countries already mentioned. Ending on a cautionary note, Wilson added that Romania is being held back by disputes between government and private companies. Several court cases in the last year have resulted in companies having to pay large fines. Such behaviour has been seen as indicative of corruption and unclear regulation that has put off potential foreign investment.

For a transcript of this event please click here