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. Last Updated: 07/27/2016

Oil Feud Revives Hunt for Alternative Energies

BERLIN -- One turn of a valve can have rippling consequences. The oil-price dispute between Russia and Belarus has jolted Europe, reviving debates on alternative energies and highlighting the continent's reliance on fuel flowing through the volatile politics enveloping Moscow and former Soviet republics.

The unfolding scenario is a fascinating game of wily players, big business and diplomacy connected by pipelines and exploration projects. The standoff between Belarus and the Russian pipeline monopoly Transneft led to oil disruptions in Poland and Germany.

That triggered a shake in financial markets and an immediate jump in the stock of a Norwegian energy company that supplies the region.

The crisis appeared to be resolved this weekend, but the unpredictability around it has pushed Europe into re-examining options. Germany, Poland and the Czech Republic plan to import more natural gas from Norway and Qatar. Italy wants to increase solar power technology. The European Union has proposed cutting oil imports, but has yet to agree on a uniform energy bloc that would reduce Russia's advantage in negotiating with individual nations.

"We need to be more independent from foreign energy supplies," said Guido Westerwelle, chairman of Germany's Free Democratic Party. "[This] would make us freer and less subject to blackmail."

With its geographic proximity and vast natural resources, Russia will remain a prominent European supplier, especially if nations become less reliant on oil from the chaotic Middle East. The question becomes how to deal with a Russia that often appears more authoritarian than democratic and is enmeshed in scandals, such as the poisoning of a former agent and the murder of a crusading journalist.

The cover of a recent Economist magazine captures Europe's uneasiness toward Moscow: President Vladimir Putin dressed like a 1930s gangster and brandishing a gas pump like a Tommy gun. The caricature has lingered even as Moscow blamed Minsk for instigating Russia's decision to stop oil from flowing through the Druzhba pipeline.

"Russia is using energy like a weapon, so we have more fears," said Claudia Kemfert, chief of the energy department at the German Institute for Economic Research. "It was a shock to Western Europe in 2006 when Russia shut its pipelines to Ukraine. Now we're discussing more heavily how to decrease our dependency."

European officials have complained that Russia's energy spats with its neighbors, many of which act as fuel transit countries to the West, are turning Moscow into an untrustworthy partner. The three-day closing of the Belarus pipeline had minimal effect on Europe's reserves, but it was the second reminder in 13 months that Russia's political whims could influence financial markets.

"Europe shouldn't depend too much on [fuel] delivery from the East," German Finance Minister Michael Glos said. "A balanced energy mixture of oil, gas, coal, nuclear and renewable energy is indisputable."

The Arctic region, which contains one-fourth of the world's natural gas and oil reserves, is emerging as an attractive alternative. Norwegian companies have begun exploration in the Barents Sea for natural gas, which could be liquefied and transported across Europe.

Russia, however, remains an unsolved part of the equation: Moscow and Oslo have yet to resolve border differences that have kept Norwegian firms away from stretches of the Barents.

Some analysts suggest that Russia's aggressive energy strategy in Europe is exaggerated, and that Moscow will not let disputes with former Soviet republics sour relations with the West. But the cases of Belarus and Ukraine underscored its inability to impose higher rates on its neighbors without causing short-term disruptions to its European market.

Russia provides 30 percent of the European Union's imported oil and nearly 40 percent of its imported natural gas. A new EU study predicts that unless there are shifts to alternative and renewable energies, the continent's energy imports will increase from more than 50 percent to about 70 percent by 2030.

"Russia does possess means to use its energy as a weapon, but this term is misleading," said Roland G?tz, a Russia expert with the German Institute for International and Security Affairs. "Energy is a two-sided weapon. If Russia stops gas and oil exports, it will lose income and political credibility, and a good name as a trading partner."

European officials say Russia's energy gambits are largely aimed at punishing new democracies, or in Belarus' case, a defiant autocrat, in former Soviet republics. Russian fuel prices are relatively low in these countries. Recent cost increases are calculated to disrupt governments and create tension at the eastern edge of the EU, officials say.

Russia says its increases amount to prices that are still below half those charged in Western Europe. It says that Gazprom and other state-owned corporations have been held hostage by transit countries such as Belarus that are resisting higher costs by threatening to disrupt pipelines.

Germany is illustrative of how Russia's oil and gas moves can rattle energy and political landscapes. Amid the Belarus-Russian dispute, Chancellor Angela Merkel urged developing renewable energies and rethinking a plan to phase out the country's nuclear power plants by 2020. Nuclear power is a sensitive topic in Germany. Opposition to it helped define the Green Party; a push to save the plants could paralyze Merkel's fragile coalition government.

Berlin has also resurrected a plan to build a shipping terminal in the northern city of Wilhelmshaven to import liquid gas from Norway and Qatar. The port is scheduled to be completed 2010, and is expected to reduce Germany's reliance on natural gas from Russia. Another natural gas option is a planned pipeline through the Balkans and Turkey to link Europe with Middle East and Central Asian suppliers.

But Berlin is also strengthening energy bonds with Moscow. German corporations have joined Gazprom in constructing a gas pipeline under the Baltic Sea to Germany. The $5 billion project, expected to be completed in 2010, will skirt former Soviet republics, reducing the likelihood of fuel disruptions.

Poland criticized the deal as undermining efforts to form a European energy bloc. Polish President Lech Kaczynski said the Baltic pipeline made Eastern Europe more vulnerable to pressure from Moscow, and was another indication of Gazprom's ability to exploit energy fears and negotiate bilateral contracts. Suspicions about the project widened when former German Chancellor Gerhard Schroder accepted a $320,000 Gazprom consultancy job when he left office in 2005.

Berlin is Moscow's closest European ally, but Merkel is more circumspect than Schroder was in dealing with Putin. She has stressed that she wanted a "strategic partnership," but her agitation with Gazprom in recent days drew a terse quip: "We see that even during the Cold War, Russia was a stable energy supplier." Two days later, she said she would travel to Russia later this month.