Filenews 30 January 2022 - interview with Nikoletta Kourousi
The recent developments surrounding the much-discussed EastMed gas pipeline, the informal document of the US State Department and the awkward reactions of the governments that support it, require that there be a responsible discussion on the new dimensions of the national energy strategy.
In an interview with "F", Professor of the Jean Monnet of the European Chair in Energy and Competition Law at the University of Piraeus, Dr. Nikolas Farantouris, note that the current AMERICAN withdrawal of support for the project as "unsustainable" and "an area of tension in the region" constitutes an impressive U.S. shift in the project, while satisfying Turkey's positions. It argues that the sending of such a document to three capitals and the written depiction of such value judgments at this juncture should and could have been avoided.
He stresses that if there were new economic or technical and geopolitical data, we should have demonstrated different reflexes. He also comments on the position of Ioannis Kasoulides on the "problem-creating tool", noting, among other things, that "the cancellation of the project could at the same time include compensation and strong quid pro quo for the promotion of Greek Cypriot positions".
He notes, as he says, "a lack of coordination, goal setting and foresight", while warning that "the communication management of foreign and energy policy, without foresight, long-term planning and broader political consensuses, is the shortest path to painful and humiliating decline".
-From the strong US support to the EastMed pipeline we have reached the present removal of support for the project as "unsustainable" and "area of tension in the region". What has led to this development?
- East Med was designed to bring the natural gas deposits of the Eastern Mediterranean to Europe through Cyprus, Crete and mainland Greece. Both the EU and the US – at the highest level of the head of the diplomatic delegation, M. Pompeo and the then US President Trump – had expressed their full support for a project that brought the three eastern Mediterranean countries even closer together and promoted, as they argued, the security of energy supply and the diversification of Europe's energy sources. Of course, in the past there were also reservations from various factors. However, the official US position, as expressed over the years at the highest level, was extremely supportive of the project, in full line with EU support.
The current U.S. withdrawal of support for the project as an "unsustainable" and "field of tension in the region" satisfies Turkey's positions and represents a striking U.S. shift in the project. But the problem is not only or mainly this. The problem is that it is causing inexcusable embarrassment to the Greek government, at a time when the US State Department's energy adviser, Amos Hochstein, last week revealed that the Greek Government had been informed a month before the leak of the disputed document and was aware.
Regardless of the reasons for the American turnaround and regardless of the expediency of continuing or not continuing the project, the sending of such a document to three capitals and the written depiction of such value judgments, 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 facts two years ago were different, or was this signature just a political communication "firework"? Do you think that the wreck could be prevented or the data around the economic and technical viability of the pipeline combined with geopolitical developments made it inevitable?
- Åst Med has received strong intergovernmental support, as well as generous funding of its preliminary techno-economic studies from the EU. In 2013, the project was included by the EU in the so-called Projects of Common European Interest, while in the period 2015-2018 the EU proceeded with the financing of technical, economic and environmental studies amounting to 50 million dollars. On March 20, 2019, an Interstate Agreement between the three countries was signed in Tel Aviv, in the presence of the U.S. Secretary of State, who expressed strong U.S. support for this project, which would diversify energy sources and contribute to Europe's security of supply. Following this interstate 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 legislative bodies of the three countries, with the aim of completing the project by 2025 (which was then postponed to 2027).
If there were new economic or technical and geopolitical data, we should have shown different reflexes. The briefings we have had all this time from the companies running the project (Greek DEPA - Italian Edison) and the competent government officials are that "we are progressing well". Even last week the Public Gas Corporation (DEPA) announced that it is "proceeding normally" as if nothing is happening.
I see a lack of coordination, goal setting and foresight. Is the project continuing as normal because it is considered viable and technically feasible despite the geopolitical upheavals? Or is it not viable and technically feasible, but its continuation facilitates geopolitically?
The latest developments do not allow us to turn a blind eye and do what is happening. Communicative management of foreign and energy policy, without insight, long-term planning and broader political consensuses, is the shortest way to a painful and humiliating decline.
-In a recent article, you referred again 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 put the following questions to the Greek Government:
a) Did he ever really believe in the EastMed pipeline?
b) If so, did he make sure to defend him in a timely manner by shielding the project and obtaining strong commitments, e.g. in the framework of bilateral agreements (recent Greek-American defence agreement, etc.)?
c) If not, why did he proceed with the solemn signing with fanfare in 2020 of a tripartite interstate agreement on EastMed, calling the project "of historical importance", thus making its eventual cancellation much more painful and humiliating?
d) After the completion of the ongoing privatization of DEPA, which together with the Italian Edison is the developers of the project, which (private) believes that it would undertake to finance the construction of a pipeline with an estimated cost of approximately 6.86 billion euros. dollars?
e) Finally, regardless of whether or not he believed in the project and supported it or not sufficiently, he made sure at least to ensure that in case of cancellation, Greece would receive some strong quid pro quo (e.g. American pressure on Turkey for the Cyprus issue, for a co-contract with Greece for The Hague regarding the continental shelf-EEZ, lifting of the casus belli, European guarantees and quid pro quo in the context of a conference on the Eastern Mediterranean)?
I believe that the answers to what has not been done come from the very sequence of events.
"Smart foreign policy seizes opportunities"
- The current Minister of Foreign Affairs of Cyprus, Ioannis Kasoulides, recently mentioned that he has always seen the EastMed pipeline "as a tool for creating problems, especially with regard to efforts to resolve the Cyprus problem". Do you agree with that position?
-The "smart" foreign policy seizes the opportunities and capitalizes on the favourable circumstances. As I said before, East Med was supported by the EU and the US in diversifying Europe's energy sources. Its annulment, "for any good reason" as the Anglo-Saxons would say, could at the same time include compensation and strong quid pro quo for the promotion of Greek Cypriot positions.
- Do you consider 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, as well as for the geopolitical upgrading of Cyprus and Greece?
-I also support the energy transition to the new era with rapid steps of de-dependence on fossil fuels. For some time gas will remain relevant, but the climate crisis and international and European institutional, regulatory and economic developments are leading to the gradual dismantling of fossil fuels, including gas. Of the countries in the region, Israel moved more quickly in the exploitation of its deposits. Cyprus followed. Greece is still lagging behind. And conditions as they go will become less favourable for hydrocarbon companies, not only for geopolitical reasons, but also for economic and institutional reasons.
- The current energy crisis combined with internal pathologies 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 – as early as the summer – about international developments. Specific measures had been proposed in good time – as early as September – to stem the tide of precision. And those responsible for the unsuccessful negotiations on gas import prices were notified in good time.
The energy crisis, which is dying internationally and especially in Europe, affects even more strongly countries such as Cyprus due to various factors (economic, political, institutional) and possibly internal distortions and other regulatory imperfections in the functioning of the market.
For this reason, a package of measures was needed in a timely manner: a) fiscal (reductions in excise duties, etc.), b) regulatory (CERA interventions where regulatory gaps and malfunctions are observed), c) controlling (interventions of other control authorities such as competition authority), against revaluations and possible phenomena of profiteering and distortion of competition.
WHO IS WHO
* Mr. Nikolaos Farantouris is Professor of the Jean Monnet European Chair in Energy and Competition Law at the University of Piraeus and a visiting professor at The European University Cyprus. He served for 10 years as Director of Legal Services and Legal Advisor to DEPA and President of the Legal Committee of the Association of Energy Companies EUROGAS in Brussels. He is an advisor to the Greek leader of the main opposition and president of SYRIZA-PS.
