Editorials

Spies and agents of influence in the Romanian energy industry

Gas pipes and associated specific gear are pictured prior to the inauguration ceremony of the Podisor gas compression facility, part of the BRUA pipeline project, near Podisor village, 50 Km south-west from Bucharest, Romania, 31 October 2019.
© EPA-EFE/ROBERT GHEMENT   |   Gas pipes and associated specific gear are pictured prior to the inauguration ceremony of the Podisor gas compression facility, part of the BRUA pipeline project, near Podisor village, 50 Km south-west from Bucharest, Romania, 31 October 2019.

Holzstock Festival

Romania has the potential of becoming an energy power in the EU. Political red tape, inbred corruption and Russia’s hybrid actions have exposed the vulnerabilities of the Romanian energy sector.

Romania’s energy industry: untapped strategic potential and serious security vulnerabilities

Economic (and energy) security boils down to a few practical aspects of particular importance:

  • the state’s ability to maintain independent production units in a global market;
  • the state’s ability to secure access to energy sources and strategic materials;
  • the possibility that economic dependency on global markets can be used to achieve political goals;
  • the possibility that global markets will widen economic disparities between states;
  • the risk that economic globalization, which diminishes a state’s economic decision-making power, can generate a shadow economy, illicit trade, technology trafficking and negative effects for the environment;
  • the risk that global economy might slip into a crisis due to poor economic policymaking, weak political leadership, weak international institutions and financial instability.

Economic defense, a field that encompasses energy, is the remit of state institutions with prerogatives established by laws specific to this field of activity. Collective defense results from the fact that a country cannot defend itself through individual efforts. This was the main justification for the creation of the European Union. The European Commission understood that, in economic terms, collective defense can contribute to improving the rating of a state, increasing the confidence of strategic foreign investors in the stability of a country’s business sector, and boosting the exchange of goods and services with external partners. The main traits of collective defense are the following: voluntary participation, selectivity, openness, permissiveness, organization, legal basis, legitimacy and deterrence. The creation of a common energy market is governed by a well-known principle: the more sellers and buyers operate on a market, the lower the price of a given product. When it comes to energy, it is essential that prices remain as low as possible, considering the energy industry fuels the economy and ensures the livelihood of citizens.

The importance of the Romanian energy industry is largely tied to its history: Romania was the only communist country that imported Western technology for nuclear power plants. Today, we can no longer ensure our energy security, as Romania has become a net importer of electricity and an occasional importer of natural gas, despite being among the few EU countries with energy resources of its own, the fact that it is able to help the Republic of Moldova and Ukraine with energy exports, or the fact that, capitalizing on its favorable terrain and geographical positioning, it can store energy deposits for its neighbors as well, which presents Romania with a geopolitical advantage.

However, energy issues are not taken at face value. The activity of the Ministry of Energy is impacted by heavy politicking, and, given its separation from the Economy Ministry, the Energy Ministry itself was taken off the agenda of the Supreme Defense Council (CSAT).

Furthermore, starting 1999 with Vladimir Putin’s rise to power, the Russian Federation arguably became a threat to Romania's energy and economic security. The launch of the “Gerasimov Doctrine” in 2011 further amplified this threat. Historically, we can notice a pattern of the Russian Federation’s aggression in the Black Sea area that manifests itself as follows:

  • the development of a corrupt system – bribing or imposing politicians controlled political by the Kremlin, interfering with election processes, creating revisionist political factions friendly to the Kremlin;
  • the acquisition of assets in strategic industries, especially energy;
  • taking over the information space and social media - the “fake-news” onslaught, from social networks to quality media, generated by the “troll farms” linked to Russian intelligence;
  • the emergence of “little green men” in territories that are still “unexplored”.

Russia's “little green men” in Romania’s energy industry. Facts that suggest Romania is the target of Moscow's hybrid aggression

With regard to the “little green men” in the Romanian energy industry, they are disguised in expensive suits, are white-collar workers who act against national interests. A comparative historical analysis of the evolution of the energy industry in the last 20 years will confirm that Romania is the victim of the hybrid aggression of the Russian Federation. Here are the top arguments:

  • Romania has the necessary resources, although it lacks gas extraction and electricity production capabilities to ensure energy self-sufficiency;
  • Romanian authorities have not made any major investments in energy production in the last 34 years (with the exception of the Cernavodă nuclear plant, where investments started in 1989);
  • Romania has no oil refineries left;
  • distribution networks (for gas, fuel and electricity) are no longer owned by the Romanian state (we can also include Electrica, where the state is no longer the majority shareholder);
  • Romania doesn’t have large storage capacities for gas and cannot extract the stored gas from its few deposits left because it lacks pipelines with appropriate flow rates;
  • reports of the Romanian Energy Regulation Authority (ANRE) regarding existing production capacities are false;
  • starting 2019, Romania has become a net importer of electricity;
  • Romania has not unclogged its hydropower reservoirs for 30 years;
  • Romania is insignificantly interconnected to European and regional electricity and gas grids;
  • in less than 6 years, the price for electricity has tripled (from 34 EUR in 2018 to 100 EUR in 2024);
  • decision-makers mimic European directives, although energy policies are no longer modern or were initially wrong. The Grean Deal and Fit for 55 will see the EU switch from a Russian gas monopoly to a Chinese monopoly. Strategic materials, metals and rare-earth minerals used in the construction of photovoltaic panels are 80% controlled by China, a country that also owns 90% of the production of magnets. Also, over 50% of components used by wind parks are also manufactured in China;
  • Romania has renounced key parts of its energy sovereignty and has dependencies imposed by other state or non-state (hostile) market players, used to achieve their own political goals;
  • Romania failed to find interdependencies to avoid the possibility of being blackmailed by other states, and also failed to create a win-win situation of smart dependency;
  • Romania cannot fight efforts to combat economic disparities imposed by other states or multinational companies – a case in point being the closure of Arpechim Pitești refinery owned by the OMV group.
  • Romania is currently in a situation where various foreign companies exert an oligopoly or monopoly in the energy industry, a fact that has impaired the state’s economic decision-making power.

All these factors are unlikely to occur successively, which leads us to conclude that the present situation is the result of actions coordinated with the following result: the only entity that stands to benefit from the current situation in Romania is the Russian Federation.

This result could be devastating, because starting January 1, 2027, Reactor 1 at the Cernavodă power plant will undergo major repairs, resulting in a production deficit of 720 MWh, which in turn could lead to a regional or national black-out.

What does this mean? Suffice it to imagine a week without running water in an urban center.

The problems facing the energy sector, symptoms of Romania’s failure as a state

Ever expanding their grip on the local energy sector for the last 15 years, economic interest groups bribe decision-makers in political parties in order to make sure the right people will serve their interests when the time comes. This is how sophisticated shenanigans have taken root: entities or even commercial companies were set up with the goal of draining funds (see the connection between SAPE, Electrocentrale Grup and Titan Power, companies that don’t produce anything), imposing policies that go against national interests and expanding the structure of state administration to favor interest groups.

All that was achieved only by infiltrating decision-making bodies, collecting information and influencing policymakers.

The purpose of this article is not to investigate who these people are and what activities they carried out, as this is the remit of relevant institutions in the field of national security. However, we can provide two examples in that respect: the first, reported by the media, is that of an ANRM official prosecuted for espionage who is overseeing the flow of documents across this agency. The second example draws on my own sources and information provided by a fellow journalist, whereby I found out how decision-makers were fed false information, according to which Gastrade, the company that manages LNG imports from Alexandroupolis, allegedly has shareholders from the Russian Federation. This piece of information prompted Romgaz to withdraw from the initial association with Gastrade in 2020.

Examining the evolution of the energy industry, we can conclude Romania today has the characteristics of a “failed state”, as described by Dan Ungureanu: “[a state can fail] due to inept leaders. It may fail due to leaders who are so corrupt, that laws are no longer observed. It can fail when the population refuses to cooperate with the authorities. All of the above apply in this case: a government censored by Parliament, an alternative government whose belated creation is hampered by political infighting, a population that resists state authority due to conspiracist reasons”. Thus, Romania’s energy sector needs a reset across the board, with new ways to provide energy for the economy and the population at reasonable prices.

In the current context where news of Russian espionage in Romania has finally broken at local level, and more news of espionage and sabotage scandals has surfaced in NATO countries, we believe that removing foreign influence factors and corruption from decision-making processes in the Romanian energy industry represents a matter of great urgency. The present context marks a turning point, as most European economies are transforming to meet the new challenges recently launched by the Russian Federation, evolving towards war economies, where energy is essential to sustain the war effort.

Note: This article draws on my presentation at the “Black Sea in the regional geopolitical and strategic context” Conference hosted by the Maritime Security Forum and the “Ion Conea” Geopolitics Association on April 25, 2023 in Constanța.

EBOOK> Razboi si propaganda: O cronologie a conflictului ruso-ucrainean

EBOOK>Razboiul lui Putin cu lumea libera: Propaganda, dezinformare, fake news

Cosmin Gabriel Păcuraru

Cosmin Gabriel Păcuraru




Follow us on Google News

7 minutes read
Two Romanian history lessons for Putin’s local admirers
Two Romanian history lessons for Putin’s local admirers

Russian propaganda is now fixed on Romania and Moldova. The Kremlin is reiterating a number of older Soviet narratives, such as the one on Moldovenism, while at the same time spreading new lies, for instance claiming Romania has allegedly given Moscow its treasure.

Cosmin Popa
Cosmin Popa
16 Jul 2024
Four questions regarding the presidential election and the referendum in the Republic of Moldova
Four questions regarding the presidential election and the referendum in the Republic of Moldova

Există o serie de semne de întrebare legate de alegeri, de la numărul de alegători – important pentru validarea scrutinelor – până la actorii care se vor putea înscrie în cursă și desemnarea unui candidat unic al opoziției pro-ruse.

Corneliu Rusnac
Corneliu Rusnac
15 Jul 2024
UEFA is ignoring the political clampdown against Belarusian football players
UEFA is ignoring the political clampdown against Belarusian football players

Dozens of players have been harassed by authorities in Belarus since 2020. UEFA didn’t react, while allowing EURO 2024 games to be broadcast by state propaganda media.

Zmicier Mickievič
Zmicier Mickievič
12 Jul 2024
Moldova and Ukraine in the EU: political will vs. the reality on the ground
Moldova and Ukraine in the EU: political will vs. the reality on the ground

The launch of EU accession talks with Ukraine and Moldova shows there is political will in the EU for the two countries to join. The process itself, however, could be complicated and lengthy.

Iulian Comănescu
Iulian Comănescu
09 Jul 2024