Countries defy EU ban on gas pipeline work

Russia’s energ y clout underlined by refusal to stop construction

VIENNA, AUSTRIA —A clutch of countries is breaking ranks with the EU’s efforts to put economic and diplomatic pressure on Russia over Ukraine and building a pipeline meant to carry huge amounts of Russian gas to their doorstep.

T hei r def ia nce of a European Union stop-work order is more significant than just another missed chance for Europe to call out the Kremlin. Russian natural gas already accounts for about one-third of the EU’s needs. The South Stream pipeline could increase Russian supplies to Europe by a further 25 per cent, potentially boosting Moscow’s leverage long after the Ukraine crisis fades.

Adding to the skein of Russian pipelines already ending in Europe, South Stream would go through Bulgaria, Serbia, Hungary, Slovenia, Austria and Italy in one leg and Croatia, Macedonia, Greece and Turkey in a second. The European Commission, the EU’s executive branch, has ordered a construction moratorium over concerns with Russia’s dual role as pipeline owner and gas supplier. It has also delayed some political talks on the pipeline amid the crisis in Ukraine.

“Developments in Ukraine and Russia have demonstrated that the EU’s priority is to diversify its energy sources,” said a spokeswoman, Sabine Berger of the EU Energy Commissioner’s office.

But Austria, Hungary, and Serbia — the first two EU members, the third a candidate to join — have said they will build their sections of the project and others may follow, to the displeasure of the EU and United States. In the wake of Austria’s decision last month, Washington urged it to “consider carefully” whether that contributed to “discouraging further Russian aggression.”

Moscow says such arguments by the U.S. are driven by business concerns. In Vienna recently to lobby for Austrian support for South Stream, Russian President Vladimir Putin said “our American friends … want to supply Europe with gas themselves.”

In Slovenia Tuesday for discussions that included South Stream, Russian Foreign Minister Sergey Lavrov challenged the EU Commission’s moratorium as “not in accordance with norms of international law.”

Slovene Foreign Minister Karl Erjavec cited North Stream, another Russian pipeline to Europe partially owned and supplied by Russia, as a precedent for South Stream.

European reaction has been generally muted. While individual countries are taking steps to diversify energy sources, officials seem to recognize there are few near-term options to Russian gas.