Nabucco gas pipeline

September 13, 2010 | 00:00

Nabucco gas pipeline

The main justifications for Nabucco pipeline are its role in ensuring energy security and fighting climate change. Yet there remain serious doubts over whether the Nabucco pipeline can help to solve any of these problems. Moreover, it will bring limited public benefits and comes with serious social and environmental concerns. Bankwatch believes that Nabucco should not receive public support, either financial or political.

The Nabucco pipeline project, named after the opera of Giuseppe Verdi, is a more than 10 years old idea to bring Caspian or Middle Eastern gas through Turkey to the European Union. Its planned route is 3300 kilometres long making it one of the longest pipelines outside of Russia, and it is planned to cross Turkey, Bulgaria, Romania and Hungary to Austria. The estimated cost of construction is almost EUR 8 billion and the planned final capacity is 31 billion cubic metres of gas. In January 2009, the president of the European Investment Bank (EIB) declared that the bank may finance up to one quarter of the construction costs. Among the main promoters of the project are the European Commission (EC) and several EU member states. The main justifications for Nabucco are its role in ensuring energy security and fighting climate change. Yet there remain serious doubts over whether the Nabucco pipeline can help to solve any of these problems. Moreover, it will bring limited public benefits and comes with serious social and environmental concerns. Bankwatch believes that Nabucco should not receive public support, either financial or political.

Here are four reasons for not providing public funds for this project.

1. Do not contradict the EU's policy of human rights' promotion. For many years the Nabucco project has faced problems when it comes to guaranteeing sufficient gas supplies. The only country offering enough gas is Turkmenistan, one of the most authoritarian regimes in the world (in a recent Freedom House survey, Turkmenistan received the same score as North Korea).

2. Do not support fossil fuels addiction. Public financial and political support for fossil fuels investments undermines EU climate policy targets. If we commit to Nabucco now, Europe will be using it for importing gas in at least 50 years' time. We believe that public financial and political support should be exclusively focused on energy efficiency and renewables.

3. Bet on energy efficiency to bring real energy security. Real energy security and independence can be achieved by increased energy efficiency. Central and eastern Europe wastes a lot more energy than western Europe, and this is clearly detrimental for the region's economies. We can, though, achieve the goal of energy security by rationalising our energy use, for example: insulating houses, lowering losses in transmission of energy and heat, increasing the efficiency of existing power generation units, and better integration of EU energy market.

4. Invest in technologies benefiting local people. Unlike big fossil fuels investments, concentration on energy efficiency will not only contribute to energy security and emission reductions, but also can reap numerous ancillary benefits (“double dividend”) for social cohesion and economic development such as reducing energy bills for households and providing new employment and business opportunities, especially in the sector of small and medium enterprises.

Nabucco is receiving significant public support even though:

  • It may ultimately benefit the governments of the most authoritarian regimes in the world at the expense of citizens.
  • No assessment of an alternative way to deliver energy security, through increasing energy efficiency for example, has been conducted.
  • It may involve Europe in long-term cooperation with unstable regimes that do not always stick to contractual commitments on gas deliveries.
  • No political risk assessment for the whole project has been made public.
  • No climate assessment of the project as a whole has been done.

Read the full article with more details here.

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