Energy Transportation in the Baltic Sea and the Black Sea Regions


Pe 9.4.2010 klo 13:00-15:00
Auditorium of the Finnish Institute of International Affairs
Ankkurikatu 5

The Black Sea and the Baltic Sea are both inland seas surrounded by EU member states and non-member state countries. How has the geopolitical situation in these regions affected the development of energy transportation in these areas? What are the environmental impacts of oil transportation and the gas pipelines? What similarities and differences are there between the two seas?

Opening and Chair: Dr. Teija Tiilikainen, Director, Finnish Institute of International Affairs

Geopolitical aspects of energy transportation in the Baltic Sea and Black Sea regions

Black Sea Perspective:
Dr. Peter Poptchev, Ambassador at large for Energy Security and Climate Change; National Coordinator for the Nabucco, Ministry for Foreign Affairs of Bulgaria

Dr. Peter Poptchev is a career diplomat and has served in Lagos, Geneva, Brussels, Dublin and Vienna working on international security and arms control, non-proliferation, European and Euro - Atlantic integration, globalization and energy security. He is the author of four books and lectures at the Diplomatic Institute and various Bulgarian universities.

Baltic Sea Perspective:
Mr Jari Luoto, Ambassador for Baltic Sea Issues, Ministry for Foreign Affairs of Finland

Mr Jari Luoto has been the Ambassador for Baltic Sea Issues at the Ministry for Foreign Affairs of Finland since 2008. He has previously acted as a special adviser to the Prime Minister from 1996 to 2003 and as the State Under-Secretary and later as the State Secretary for EU Affairs from 2003 to 2008.

Environmental Impacts of Energy Transportation


The Baltic Sea Perspective on Building the Pipeline and Oil Spills
Dr. Juha-Markku Leppänen, Head of the Monitoring and Assessment Unit, Marine Research Centre, Finnish Environment Institute (SYKE)

Dr. Juha-Markku Leppänen acts as the Head of the Monitoring and Assessment Unit of the Marine Research Centre of SYKE and has wide experience in the design and implementation of marine environmental monitoring as well as assessment procedures. Before joining SYKE he was Professional Secretary at the HELCOM Secretariat, responsible for the development and coordination of the joint Baltic Sea environmental monitoring as well as data exchange and handling.

Emissions and Discharges from Shipping
Dr. Anita Mäkinen, Head of Marine Environment Protection Unit, Finnish Transport Safety Agency (TraFi)

Anita Mäkinen has acted as the Head of the Marine Environment Protection Unit in the Finnish Transport Safety Agency (Trafi) since February 2010. Before joining TraFi, Dr. Mäkinen served almost ten years as Head of Marine Programme at WWF Finland. Mäkinen attained her PhD in 2007 from Åbo Akademi University in Environmental and Marine Biology. In 2009 she became Adjunct Professor of marine biology at the University of Helsinki.

Summary of the Seminar:

Dr. Teija Tiilikainen welcomed the distinguished speakers and seminar participants to the seminar on energy transportation in the Baltic Sea and Black Sea regions. Dr. Tiilikainen introduced the outline of the seminar, explaining that the first session would include two presentations about the geopolitical aspects of energy transportation in these two regions and the second session two presentations about the environmental impacts of energy transportation.

Dr. Peter Poptchev, Bulgarian Ambassador at large for Energy Security and Climate Change opened his presentation by arguing that the issue of energy transportation in these two regions is extremely topical and highly important since both of the seas present a link between the EU and other countries.

Ambassador Poptchev started his presentation by pointing out that the broader Black Sea region has vital implications for the overall European security environment as it lies in the centre of a huge geopolitical area in terms of energy deposits and reserves as well as transportation opportunities. In addition, it harbours Europe’s last “frozen conflicts” as was demonstrated in the case of open conflict in Georgia in August 2008. He stressed that the EU, NATO, Russia and Turkey should all be considered major regional actors.

Ambassador Poptchev presented some of the current energy trends in the region as assessed by the International Energy Agency (IEA). The main points included that i) the financial crisis has had a huge impact in the region, especially in Ukraine and Russia, and there are uncertainties relating to the timing of recovery; ii) regional energy markets are still in the early stages of development, and iii) there are concerns over the reliability of energy supply from Russia and other suppliers across the national borders. Ambassador Poptchev also pointed out that China has become the main diversification option for East Caspian gas, and is tapping Central Asian gas as well.

On extra-regional presence and influences in the wider Black Sea region from the security and economical point of view, Ambassador Poptchev mentioned that the policies in the region also depend on strategic approaches emanating from Brussels, Washington, Moscow, Ankara, and quite likely Beijing, Delhi and Tehran. China, India, Korea and Malaysia are at the top in energy co-operation with countries in the region and China is expected to emerge as a significant actor in the Black Sea scene over the next decade.

Ambassador Poptchev also briefly presented the Nabucco pipeline project, which is a typical example of a public-private partnership. He mentioned that this diversification project has been developing with uneven pace due to, for example, the complicated geopolitical setting in the wider Black Sea region.

Ambassador Poptchev pointed out that the EU is the world’s biggest importer of natural gas. The wider Black Sea region is a natural link to gas deposits and routes which can ensure the realization of the diversification of suppliers and transport route for energy. He then argued that the wider Black Sea region is the key in solving the task of meeting and managing the demand for the gas in the EU economies from Russian and non-Russian sources.

Some EU policies and initiatives have not been widely accepted in the region, but positive development has been the adoption of the Early Warning Mechanism (EWM) on the supply of oil, natural gas and electricity from the Russian Federation to the EU.

As a member of both the EU and NATO, Bulgaria enjoys important comparative advantages in the strategic, political, economic and geopolitical sphere. Bulgaria supports the emerging approach to regional energy security, which excludes “zero-sum” game options and seeks to establish a common maritime and economic understanding of regional cooperation in the wider Baltic Sea region, including energy.

In the past few months Bulgaria has prioritized the Nabucco Project and has agreed with Turkey for the two countries to join forces for the timely realization of this European project. In line with a leadership role on Nabucco, Bulgaria expresses great interest in developing the Southern Corridor concept as a long-term strategic undertaking.

As a concluding mark, Ambassador Poptchev noted that the diverse and rather complicated strategic picture in the wider Black Sea region differs substantially from the situation in the Baltic Sea region. This comparison between the Black Sea and Baltic Sea places a heavy responsibility on the Euro-Atlantic community for two interconnected reasons: 1) European and Euro-Atlantic integration values, principles and institutions evoke continued political and economic interest among the elites and citizens of countries in the wider region; 2) EU and NATO regional initiatives could not therefore be other than of a constructive nature and be geared towards security, stability and co-operation in the Black Sea proper and the wider region.

Mr Jari Luoto, Finnish Ambassador for Baltic Sea issues, opened by mentioning that the Baltic Sea has always been important, because it has served as a trade route for goods and ideas. The geopolitical importance of the region has also been underlined in the history and the end of the Cold War opened a new chapter in the region. He identified innovation as the driving force and source of stability in the region.

Ambassador Luoto continued by noting that today, the Baltic Sea region is important geopolitically because it serves as an important trading route. Logistics are also highly important as there are growing dependencies on the constant flow of goods through the region. The Baltic Sea is also an important route for passengers and tourists. He further pointed that in fact, there are currently more than 90 million passengers each year and the figure keeps growing. The sea is also a vital route for transporting.

Ambassador Luoto pointed out that there is no common policy in energy issues in the European Union and such policy could be beneficial. He further stressed that there exists a distortion of the markets due to emissions trading, caused by the fact that Russia is not bound by the emissions trading, but has access to the Baltic region energy market.

Out of the Baltic Sea countries, Ambassador Luoto brought up concerns over the Baltic states, which are not sufficiently connected to the energy market. He demonstrated a graph presenting multiple existing electricity interconnections in the region and the lack of them in the Baltic states. There are, however, new plans to build interconnections between the Baltic states and the regional grid, such as Estlink 2 and Nordbalt.

Ambassador Luoto then moved on to discuss the growing dependency on imports, while the Baltic Sea is seen as a viable route for transporting energy. These are major factors in the growth of maritime traffic, which is estimated to increase 60% from 2003 to 2020. This is further influenced by major investments made in Russia to build bigger and more efficient oil harbours, which increase Russia’s capacity to ship oil. In 2007, oil transportation in the Baltic Sea was equivalent of 145 million tonnes and it is expected to increase up to 250 million tonnes by 2015.

In addition to oil, Russia is a major gas supplier. The Nord Stream gas pipeline is currently being built, but will not alone be sufficient to meet the EU’s target on gas imports. Ambassador Luoto concluded that the lack of joint legal framework on energy issues with Russia makes the development difficult and that there are also great uncertainties relating to future prices.

Dr. Anita Mäkinen began by presenting similarities and differences between the two sea areas. The Baltic Sea is characterised by exceptional salinity conditions, low species diversity and a simplified foodweb, which all contribute to the ecological vulnerability of the sea. By contrast, the Black Sea is deeper and has a volume about 26 times bigger than the Baltic. It is the largest brackish water ecosystem in the world and its biota is mainly threatened by alien species and pollution. Both sea areas are challenging for shipping due to seasonal variation.

Both areas are also semi-closed, and severely affected by nutrient loading, pollution and alien species through ballast water. They are also important routes for commercial shipping as well as oil and gas transportation. They also have similar regional level protection through Helsinki Convention in the Baltic and Bucharest Convention in the Black Sea.

Dr. Mäkinen pointed out that international shipping in the Baltic Sea has been increasing and currently, there are about 2000 vessels trafficking in the sea at any given time. The environmental impacts of shipping include harmful discharges and emissions in different forms, for example exhaust gases, oil, ballast water, hazardous substances, garbage, and antifouling paints.

Oil transportation increases the risk of alien species, which present one of the biggest threats to marine biodiversity. 170 million tonnes of oil transportation in the Baltic Sea equals to 85 million tonnes of ballast water discharge annually. In the Black Sea the amount of ballast water carried through Bosphorus each year is close to 320 million tonnes. Subsequently, 165 alien species have been recorded in the Black Sea where as the number in the Baltic Sea is around 120.

Dr. Mäkinen finished her presentation by concluding that mass occurrences of alien species have caused serious ecological and economic problems. She also noted that the species are even spreading between the Black Sea and the Baltic Sea via the shipping canals through Europe.

Dr. Juha-Markku Leppänen presented a Baltic Sea perspective on building a gas pipeline and oil spills. On the process concerning the Nord Stream pipeline he pointed out that it is the biggest construction work in the Baltic Sea and the environmental concerns are mainly related to the construction phase. More specifically, the concerns include increased risk for ship accidents, resuspension of bottom sediments and release of pore water, nutrients and hazardous substances in the bottom sediments, toxic chemical water agents in dumped munitions, prevention of bottom trawling, and destroying cultural and scientific heritage.

Dr. Leppänen continued by saying that in order for Nord Stream to get the construction and operation permit, an Environmental Impact Assessment had to be completed. In addition, the Espoo Convention on the Environmental Impact Assessment in a Transboundary Context requires signatory countries to inform one another if a proposed activity might have an impact across national boundaries. The convention, however, has not been ratified by Russia.

Dr Leppänen pointed out that the EIA process had been very interactive and the various national and international consultations resulted in considerable improvements during the process. Regional State Administrative Agency for Southern Finland found the impacts to the marine environment to be small or moderate and mainly focusing on fisheries, and therefore the permit was granted in February 2010 with some preconditions.

On oil spills and accidents, Dr. Leppänen mentioned that 15 % of the world’s cargo transportation takes place in the Baltic Sea and it serves as the main export route for Russian Oil. He added that luckily we haven’t had a major oil spills to date. However, 210 smaller scale oil spills were detected only in 2008, some of which were accidental and others illegal. The impacts of oil on the marine environment are wide-ranging, depending on the type of the oil, ice conditions, and geographic area. Dr. Leppänen concluded his presentation by presenting different response activities against marine pollution.

Conference Chair, Dr. Tiilikainen thanked all the speakers for their interesting presentations and closed the seminar with few thoughts on how this type of seminar works as a learning experience for the EU member states on each others’ policies and practices.