Interview with Nicoletta Kouroussi
Recent developments around the much-discussed EastMed gas pipeline, the US State Department informal document and the awkward reactions of the governments that support it, call for a responsible discussion of the new dimensions of the national energy strategy.
In an interview with “F”, the professor of the European Chair Jean Monnet in Energy and Competition Law at the University of Piraeus, Dr. Nikolas Farantouris, notes that the current US withdrawal of support for the project as “unsustainable” and “field of tension in the region” represents an impressive U.S. turnaround for the project, while satisfying Turkey's positions. He argues that the sending of such a document to three capitals and the written record of such evaluative crises at this juncture should and could have been avoided.
He emphasizes that if there were new economic or technical but also geopolitical data, we should have shown different reflexes. He also did not fail to comment on the position of Ioannis Kasoulidis, on “a tool for creating problems”, noting, among other things, that “the cancellation of the project could at the same time include compensations and strong exchanges for the promotion of the Greek Cypriot positions”.
He notes that “there is a lack of coordination, focus and insight”, while warning that “communicative management of foreign and energy policy, without insight, long-term planning and broader political consensus, is the shortest path to painful and humble.”
-From the warm US support to the EastMed pipeline we have reached the present withdrawal of support for the project as “unsustainable” and “area of tension in the region”. What led to this development?
East Med was designed to bring the Eastern Mediterranean gas fields to Europe via Cyprus, Crete and Mainland Greece. Both the EU and the US – at the highest level of the head of the diplomatic delegation, M. Pompeo but also through President Trump – had expressed their full support for a project that brought the three Eastern Mediterranean countries even closer and promoted , as they argued, security of energy supply and diversification of Europe's energy sources. Of course, in the past there were reservations from various factors. However, the official US position, as expressed all these years at the highest level, was extremely supportive of the project, in full alignment with EU support.
The current US withdrawal of support for the project as “unsustainable” and “area of tension in the region” satisfies Turkey's position and represents a dramatic US shift for the project. But this is not the only problem. The problem is that it causes unforgivable embarrassment to the Greek government, at a time when US State Department Energy Adviser Amos Hochstein revealed last week that the Greek government had been informed a month before the document was leaked and was aware of it.
Regardless of the reasons for the American conversion and regardless of whether the project is intended to continue or not, sending such a document to three capitals and the written record of such evaluative crises, at this juncture, should and could have been avoided.
“Even last week, DEPA) announced that” it is proceeding normally “
-In January 2020, the tripartite agreement for the construction of the pipeline was solemnly signed. Do you think that the data two years ago were different or was this signature just a political communication “firework”? Do you think that the shipwreck could have been prevented or the data around the economic and technical viability of the pipeline combined with the geopolitical developments made it inevitable?
East Med has received strong intergovernmental support as well as generous funding of its preliminary feasibility studies from the EU. , $ 50 million economic and environmental studies. On March 20, 2019, a Transnational Agreement was signed in Tel Aviv between the three countries, in the presence of the US Secretary of State, who expressed strong US support for this project, which would diversify energy sources and contribute to Europe's security of supply. Following this transnational agreement, on January 2, 2020, the “East Med Agreement” between Greece, Cyprus and Israel was solemnly signed in Athens, which was approved by the competent legislatures of the three countries, with the aim of completing the project by 2025 ( which was then moved to 2027).
If there were new economic or technical but also geopolitical data, we should have shown different reflexes. The information we have had all this time from the companies running the project (Greek DEPA – Italian Edison) and the relevant government officials is that “we are doing well”. Even last week, the Public Gas Company (DEPA) announced that it was “proceeding normally” as if nothing was happening.
I find a lack of coordination, targeting and insight. Does the project continue normally because it is considered viable and technically feasible despite geopolitical reshuffles? Or is it not sustainable and technically feasible, but does its continuation facilitate geopolitically?
Recent developments do not allow us to go blind and pretend that nothing is happening. Communication management of foreign and energy policy, without insight, long-term planning and broader political consensus is the shortest path to a painful and humiliating fall.
In your recent article, you again referred to a “fiasco” for the Greek side and a “lack of insight”. So what actions do you think should have been taken in recent years?
– I have asked the following questions to the Greek Government:
a) Did he ever really believe in the EastMed pipeline?
b) If so, make sure to defend it in a timely manner by shielding the project and making strong commitments, e.g. in the context of bilateral agreements (recent Greek-American defense agreement, etc.);
c) If not, why did he proceed to the solemn signing with drumbeats in 2020 of a tripartite transnational agreement for EastMed, describing the project as “historically significant”, thus making its possible cancellation much more painful and humiliating?
d) After the completion of the ongoing privatization of DEPA, which together with the Italian Edison are the owners of the project, who (individual) considers that he would undertake to finance the construction of a pipeline with an estimated cost of about 6.86 billion dollars?
e) Finally, regardless of whether or not he believed in the project and supported it sufficiently, he at least took care to ensure that in case of cancellation, Greece would receive some strong rewards (eg US pressure on Turkey for Cyprus, for co-promising with Greece for The Hague regarding the continental shelf-EEZ, removal of the casus belli, European guarantees and exchanges in the context of a conference on the Eastern Mediterranean);
I believe that the answers to what did not happen come from the very sequence of events.
“Smart foreign policy seizes opportunities”
– The current Minister of Foreign Affairs of Cyprus, Ioannis Kasoulidis, recently stated that he always saw the EastMed pipeline “as a tool for creating problems, especially in terms of efforts to resolve the Cyprus issue.” Do you agree with this position?
-The “smart” foreign policy seizes the opportunities and capitalizes on the favorable times. As I said before, East Med was supported by the EU and the US to diversify Europe's energy sources. Its cancellation, “for any good reason” as the Anglo-Saxons would say, could at the same time include compensations and strong exchanges for the promotion of the Greek Cypriot positions.
– Do you think that the EU's shift to renewable energy sources is becoming a brake both for the exploitation of the natural gas deposits of the Eastern Mediterranean, and consequently for the geopolitical upgrade of Cyprus-Greece?
– I also support the energy transition to the new era with fast steps of detoxification from fossil fuels. Gas will remain relevant for some time, but the climate crisis and international and European institutional, regulatory and economic developments are leading to the gradual decommissioning of fossil fuels, including gas. From the countries of the region, Israel moved faster in the exploitation of its deposits. Cyprus followed. Greece is still behind. And conditions will become less favorable for hydrocarbon companies, not only for geopolitical reasons, but also for economic and institutional reasons.
– The current energy crisis in combination with internal pathogens in Cyprus contribute to high energy costs, with direct consequences for consumers. How do you think the problem should be addressed in the short term?
In Greece, there had been timely warnings – already since the summer – about international developments. Specific measures had been proposed in time – as early as September – to stem the tide. And those responsible for the ineffective negotiations on gas import prices had been notified in time.
The energy crisis, which is raging internationally and especially in Europe, is affecting even more strongly countries such as Cyprus due to various factors (economic, political, institutional) and possibly internal distortions and other regulatory shortcomings in the functioning of the market.
This required the adoption of a package of measures in a timely manner: a) fiscal (reductions in excise duties, etc.), b) regulatory (CERA interventions where regulatory gaps and malfunctions are observed), c) audit (interventions of other audit authorities such as the Competition Authority), against price increases and possible profiteering and distortion of competition.
WHO IS WHO
* Mr. Nikolaos Farantouris is Professor of the European Chair Jean Monnet in Energy and Competition Law at the University of Piraeus and visiting professor at the European University of Cyprus. For 10 years he was Director of Legal Services and Legal Advisor at DEPA and Chairman of the Legal Committee of the association of energy companies EUROGAS in Brussels. He is an advisor to the Greek leader of the official opposition and president of SYRIZA-PS.