What is government’s optimism about energy crisis based on? IPN debate

An energy crisis is witnessed in Moldova, especially as regards the supply of natural gas, and everyone acknowledges it. On the one hand, this situation is characterized by alarming indicators and even more alarming price rises, significant reduction in the volume of supplied gas, a general call to economize on gas, energy blackmail, state of alert, etc. On the other hand, the authorities adopted an optimistic attitude, being hopeful that a new contract on favorable terms will be signed with Gazprom. Which of these two positions show the real state of affairs, to what extent the opponents of the government are right and what the authorities’ optimism is based on were among the topics discussed in a public debate staged by IPN News Agency.

Igor Boțan, the standing expert of IPN’s project, said the current energy crisis emerged when the contract for the supply of gas between Moldovagaz and the Russian company Gazprom expired. The exorbitant market prices of gas are another component of the energy crisis. The authorities are now negotiating a new contract, making effort to obtain a better price. Last week, the National Commission on Emergencies declared a state of alert in the energy sector. Representatives of the government asked Gazprom to extend the contract for the supply of gas on last year’s terms, arguing the Republic of Moldova cannot pay an unjustified and unrealistic price.

According to him, the Moldovan authorities’ optimism is due to the legal framework concerning the supply of the country with natural gas, including the Government’s energy strategy for 2013-2030 and the regulations concerning emergencies on the natural gas market. Even if the situation is critical, the Government banks on this legal framework that envisions the ensuring of free access to the natural gas market and of an appropriate balance between supply and demand, etc.

A series of principles are stipulated, such as transparency and non-discrimination, which should be respected in there process of purchasing gas. Also, the prices and tariffs should be negotiable and should result from the supply and demand on the gas market and on the regulated prices and tariffs.

Vice president of the Party of Change Sergiu Tofilat, expert in energy security, said the Republic of Moldova is not separated from the neighboring countries and the created situation should be analyzed in a regional context. This year, the price of gas grew considerably, for several times, and it began to rise last November-December, when the COVID-19 vaccination process started. The economies reopened and the demand for raw material grew, fueling a rise in prices. “The speculators on stock exchanges are the second important factor. These evidently are interested in increasing their profits and in benefitting from this situation. They bought raw material at low prices with the aim of selling this in three or six months or in a year at much higher prices. So, the speculative transactions on the stock exchanges are the second factor that pushes prices up,” explained Sergiu Tofilat.

According to the expert, there are a number of specific factors related to the energy resources. The developed countries switched over from fossil fuels to renewable sources of energy with the aim of reducing CO2 emissions. “The natural gas is the fossil fuel that generates the least amount of toxic emissions. Therefore, many switched over from coal and crude oil to gas. This led to a larger demand for gas. Moreover, last winter and spring were colder and the underground gas reserves were much lower. Also, the wind currents were below expectation this year and the energy generated by the Aeolian power plants in Europe was smaller in quantity,” stated Sergiu Tofilat.

According to him, those who control Gazporm, more exactly the Kremlin administration, aim to profit from these circumstances, trying to force the European Union to certify the Nord Stream 2 gas pipeline and to obtain an exception from the limits imposed by the Third Energy Package. This provides that a supplier cannot use more than 50% of the capacities of a gas pipeline. The final goal of the Russian administration is to punish Ukraine.

Political analyst Vlad Țurcanu said there are political reasons due to which the crisis cannot be solved. Currently, all those who benefit from Russian gas face a blockage in the relations that continued either well or not very well during the last few decades. “Judging by the Russian President Vladimir Putin’s recent speech, an additional special tactic is needed on the part of the European states that depend on Russian gas so as to overcome this winter. The Republic of Moldova is among these estates,” he stated.

“Even independent Russian experts say that Gazprom does not employ commercial elements as this monopoly is used by the Russian Federation to achieve political goals that transcend commercial aspects. Gazprom practically gives up particular profits it can obtain the next few months so as to help the Russian Federation play its trump cards in relation to the European states. What are the benefits expected by the Russian Federation? For example, it wants the German regulator or the EU laws to yield to the Russian Federation’s insistence and to accept an exception from this rule according to which a gas supplier can use only up to 50% of the capacities of a gas pipeline,” stated the

According to the analyst, another goal of Russia is related to the renewable energy processes that started in the EU. For Europe to receive gas, an agreement on long-term contracts should be reached with the Russian Federation. This would mean stopping or postponement of these processes for an indefinite period of time. Russia plays harshly as it would gain more in political terms from these concessions than Gazprom would gain in financial terms. As to the Republic of Moldova, many things are exaggerated in the information sphere, hysteria being caused artificially. In such a situation, advantages appear in relation to the gas pipeline coming from Romania, which was put into operation. Respectively, the Moldovan authorities can also discuss with the partners from the West and, even if the prices are not small, the Republic of Moldova will not remain without gas.

The public debate entitled “What is the government’s optimism about energy crisis based on?” was organized by IPN News Agency in the framework of the project “Developing Political Culture through Public Debates” that is supported by the Hanns Seidel Foundation.

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