During the previous summit in the western Siberian city of Khanty-Mansiysk last June, Russia and the European Union agreed to start talks on a new Partnership and Cooperation Agreement. But in early September the EU suspended the talks because of Russia's role in the Georgian-Ossetian conflict.

The suspension of the Partnership and Cooperation Agreement talks has not affected Russia, and now Europe at long last has decided to start negotiations on a new agreement, to replace the old one that expired in December 2007.

However, the stakes -- above all, the gas stakes -- have been raised. The wind in Nice smelled mostly of gas, with minor nuances of oil, coal and electricity. In short, Russian-EU cooperation smells of energy, irrespective of the latest summit's agenda.

Summit participants also discussed the current financial crisis, especially since most of them would be going to Washington for the G20 meeting immediately afterward. In Nice, the parties coordinated their approach to reforming the global financial system and institutions, including the International Monetary Fund and the World Bank, an undertaking in which Russia is prepared to go further than the EU.

Russian President Dmitry Medvedev spoke in France about a new system of European security, but it was not at the top of the agenda because it was not introduced as a refined package but only as a loose idea.

Moreover, no discussion of European or Euro-Atlantic security systems is possible without the United States, and everyone in Nice knew it. French President Nicolas Sarkozy welcomed Medvedev's proposal to hold another meeting in February 2009, but added it should be attended by U.S. President Barack Obama. He also supported Medvedev's idea of holding a European security conference in 2009.

On the issue of Georgia, Abkhazia and South Ossetia, Europe confirmed its belief that the sovereignty of Georgia and the security of Abkhazia and South Ossetia must be ensured, while Russia added that the two breakaway republics' independence must also be recognized.

However, the focus before and during the Nice summit was on energy issues. The summit clearly highlighted the main problems of the upcoming talks on a new EU-Russian Partnership and Cooperation Agreement, and Europe's fears.

Prime Minister Vladimir Putin was right when he said, after his talks with his Finnish counterpart, Matti Vanhanen, two days before the Nice summit: "Europe should decide whether it needs a gas pipeline (Nord Stream) from Russia at the proposed capacity or not. If it is not needed, then we will not build the pipeline, we will build gas liquefaction plants and send (liquefied gas) to world markets," Putin said.

The Nord Stream project, assessed at 7.4 billion euros, is to be completed in 2011, but its price will definitely grow in view of the financial crisis.

A day before the Nice summit, the European Commission published "an Energy Security and Solidarity Action Plan to secure sustainable energy supplies in the EU and looking at the challenges that Europe will face between 2020 and 2050." It was not a coincidence that the Commission made its energy intentions public one day before the Nice summit.

The plan outlines six key goals, including the improbable "blueprint for a North Sea offshore grid, interconnecting national electricity grids and plugging in planned offshore wind projects." EU experts say that Atlantic winds might suffice, but not the capability to harness them.

The European Commission plans to spend 2 trillion euros on the Energy Security and Solidarity Action Plan, which will be difficult but not impossible despite the current financial problems.

Three of the six objectives were apparently designed for Russia. They include:

- development of a Southern Gas Corridor for supply from Caspian and Middle Eastern sources and possibly other countries in the longer term, improving security of supply;

- completion of a Mediterranean energy ring, linking Europe with the Southern Mediterranean through electricity and gas interconnections to improve energy security and to help develop the vast solar and wind energy potential;

- development of North-South gas and electricity interconnections within Central and Southeast Europe, building on the Energy Community, inter alia, supporting the national energy regulators and Transmission System Operators.

The Southern Gas Corridor stipulates building the Nabucco pipeline along the bottom of the Caspian Sea to pump up to 30 billion cubic meters of natural gas from Turkmenistan, Kazakhstan and Azerbaijan to Austria via Azerbaijan, Turkey and the Balkans.

The EU has resumed relations with Turkmenistan, which were suspended until the 2006 death of President Saparmurat Niyazov, whose regime was labeled "a gas dictatorship" in Brussels. On Dec. 2, the European Commission will start the procedure for approving an interim trade agreement with Turkmenistan, allowing it to buy natural gas directly.

Next year Brussels intends to form a Caspian Development Corporation, a consortium of five or six European companies that will purchase, transport and market natural gas from the Caspian basin and develop a supplies infrastructure.

The goal is to use CDC to increase natural gas acquisitions to between 60 billion and 120 billion cubic meters annually, or 12 percent to 25 percent of EU gas requirements.

The Mediterranean part of the plan provides for expanding natural gas and oil cooperation with Libya, and admits the possibility of such cooperation with Iraq, although in a more distant future. The North-South gas and electricity interconnections stipulate linking the Baltic countries to gas pipelines from Norway and the Mediterranean.

According to the European Commission, the EU countries import 42 percent of their natural gas requirements, a third of their oil and 25 percent of their coal from Russia. By 2030, Europe will depend almost entirely on imported gas, with gas imports growing to 84 percent from 61 percent.

The EU seems ready to invite Russia to use the planned Caspian pipeline, although it has not outlined the terms. But Russia thinks the pipeline will be unprofitable, because it was prompted not by economic but by political considerations.

The Energy Security and Solidarity Action Plan is an indicative move. Europe needs a new Partnership and Cooperation Agreement with Russia -- above all, to regulate their energy relations, in particular the amount and terms of buying, shipping and marketing natural gas, oil and electricity. The old PCA had no such provisions.

Clearly, gas from Libya would be much more expensive than from Russia, while Turkmenistan has agreements with Russia to deliver its gas through Gazprom's pipelines. Therefore, the hint that Europe may do well without Russian gas is not convincing, and there will be more energy disputes between Moscow and Brussels.

(Andrei Fedyashin is a RIA Novosti political commentator. The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.)

(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

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