Nabucco pipeline

The idea of the Nabucco pipeline was first put forward in the early 2000s. The aim is to bring natural gas from Central Asia and/or the Middle East to Europe to serve the constantly growing energy consumption of European people and industry and also to ease Russian leverage over the European energy market. The pipeline would start from Turkey and end in Austria, passing Bulgaria, Romania and Hungary. The cost of the pipeline (EUR 7.9 billion) was calculated at the dawn of the project, and a recalculation process is currently underway. A recent study by BP claims that the real costs may be 75% higher and reach EUR 14 billion. The European Investment Bank, the European Bank for Reconstruction and Development and the Word Bank are all public banks considering providing financing for the project.

The problems of the project are deep rooted and begin with the premises on which the project is based. Nabucco aims to ease European energy dependency though diversification of the supply routes, and to bring closer the eastern regions to the EU. Indeed the proponents of the pipeline also mention several side benefits or contribution to different policies such as:

• reliable energy services, as cheap as possible, for the competitiveness of European producers and public,
• the benefit of the national economies,
• in line with the image of the Union, the pipeline will contribute to democratic changes in certain countries,
• employment benefits,
• gateway for tourism,
• etc.

We agree that most of these are important issues, but is the pipeline the best path to reach those goals? We would argue that it is not.

Diversification of the supply routes does not necessarily change our energy dependence, as we will still rely on foreign sources. Therefore the dependency will not vanish, but is simply chopped up into pieces. Although the origin of the gas for Nabucco has not been defined, all the countries mentioned (Turkmenistan, Azerbaijan, Iraq, Iran) are suffering from undemocratic regimes with poor records on human rights, democratic values, free elections and so on. It is never secure to rely on external energy sources, especially if they are controlled by unpredictable dictatorial regimes, which may cut off gas supply notwithstanding contracts or be suddenly overthrown by citizens seeking freedom and equality. Another issue is the lack of security of the pipeline, as it is planned to cross unstable regions of Turkey, where other pipelines have already been blown up.

One of the main weaknesses of the Nabucco project is its lack of guaranteed gas supply. If the project is to reach its final capacity it has to find a supplier with large, unexploited gas reserves. One potential supplier named very often is Turkmenistan – a gas-rich country situated on the eastern side of the Caspian Sea notorious for its grave human rights situation and the dictatorial tendencies of its political leaders. The need to access Turkmen gas has already weakened Western determination to politically influence Ashgabat in order to improve its appalling human rights situation as well as political and civic liberties. The most obvious indication of this tendency was the acceptance of the Interim Trade Agreement between the EU and Turkmenistan by the EU foreign ministers on July 27, 2009 that ignored the resolution of the Parliament by making no reference to human rights. The next agreement is in the process of ratification.

The absence of pluralism in Turkmenistan and Azerbaijan (another potential supplier of gas for Nabucco) makes public oversight over gas and oil revenues impossible. Furthermore, revenues generated from the extractive industries rarely reach impoverished populations. Instead, they provide such governments with additional power to frustrate – if not totally crush – any bottom-up struggles for democracy.

Although not as obviously dirty as coal and oil, natural gas is still a finite fossil fuel and the use of this energy source has negative effects on the climate. In line with our current struggle against climate change more use of fossil fuels is the last thing we need. If the Nabucco pipeline is built, making such a huge investment into fossil fuels will lock countries into a destructive fossil fuel consumption pattern, as the incentive to develop alternatives will be lost, as well as a great deal of financial resources.

The contradictory policies of the European Commission are on one hand advocating for a fossil free future, and on the other hand urging the EIB to lend public money for the Nabucco pipeline. Decision makers must make up their minds as these funds could be used for energy efficiency measures that would reduce the consumption of natural gas and Europe’s energy dependency. The projected life cycle of the pipeline is 40 years, which would end in 2055-2056. As the EU is aiming for almost full decarbonisation of the energy and residential sectors in the EU by 2050 any new long term investments in infrastructure bringing more gas to the EU should be avoided.

• The construction will require certain amount of workforce, but this would be mostly specialised construction teams brought in by the construction company, and only for a short period. Therefore it is unlikely to open up employment possibilities to local unemployed people.
• Turkey, the starting point of the pipeline, does not have gas reserves therefore Nabucco needs additional and/or renovated pipelines. This requires additional financial resources, and must fulfil certain environmental and human right standards. In the event that the gas comes from Turkmenistan, it is hard to imagine the potential Trans-Caspian pipeline (planned to be built through the Caspian Sea from Turkmenistan to Azerbaijan) fulfilling such standards.
• The construction would be detrimental to the environment. In Hungary alone the route would cross 13 Natura2000 sites and one national park, and it would run close to populated and agricultural areas.
• The intergovernmental agreement (signed in 2009, valid for 50 years) constitutes the legal basis for possible exemptions regarding taxation and future environmental legislation to consortium partners. The text expresses strong political support for the project, and exempts the pipeline from any legislation with negative impacts on it in the future. This is undemocratic and anti-competitive.

Nabucco is distracting human and financial resources from developing energy efficiency and renewable energy sources, as well as from implementing other demand management measures to decrease our overall consumption of energy and other resources. Such moves are inevitable to tackle the challenges we are facing. A study led by Nobel Prize winner DiánaÜrge-Vorsatz estimates that the amount budgeted for the Nabucco and South Stream pipelines could be sufficient to perform high-efficiency refurbishment of two thirds of all buildings in Hungary, Slovakia, Sloveni and Czech Republic, reducing gas use and making these investments obsolete.

All in all, Nabucco will not bring us closer to real energy security, nor is it a good way to positively influence unpredictable eastern regimes. It is even more worrying that public money may finance this project, which is a leftover of the past, not the herald of a low-carbon future.

Related reports

• Nabucco and Turkmenistan – Our energy security, Turkmens’ misery

Related factsheets

• Nabucco gas pipeline
• Four reasons to keep public money away from Nabucco

Related blogs

• Tragedy or comedy, what is the Nabucco pipeline really?
• Contemplating secure and insecury energy supply
• Rotten perceptions, grim reality Turkmenistan off the agenda in European Parliament, Nabucco still nowhere near fit for purpose

Related press releases

• No public money for Nabucco – mega gas project a drain on clean energy, human rights and the environment, says Bankwatch