THE EXTERNAL DIMENSION OF THE EU’S INTERNAL MARKET: EXPORTING THE ENERGY ACQUIS AND ITS IMPLICATIONS FOR GAZPROM

Abstract

INTRODUCTION. The article examines the extent to which the Union’s internal market can be said to have been externalised, given the extraterritorial implications of the Union’s internal energy market rules and regulations. In this respect, the article investigates the exercise and control of EU regulatory power beyond EU borders by examining the crossborder reach of the Union’s regulatory power beyond its boundaries given its implications for Gazprom and Russia’s interests on the European market. MATERIALS AND METHODS. The article pursues a doctrinal approach to the research methodology which includes the internal dimension of the Union’s energy policy and the extent to which the Union’s internal market regulation has been externalised and imposed on its external energy relations with Russia – this includes a detailed analysis of: (i) the Third Energy Package (TEP)’s ownership unbundling rules; (ii) the Third Country Clause; and (iii) the Union’s Competition law (given the recent decision of the EU Competition investigation of Gazprom’s sales in Central and Eastern Europe). RESEARCH RESULTS. A fundamental aspect of the EU’s rule-based market approach, is the perception that a fully liberalised and competitive EU market can facilitate energy security by way of enhancing diversification of suppliers. As such, the TEPs’ ownership unbundling; the Third Country Clause; and the EU’s Competition law have become significant mechanisms in the Union’s toolbox of instruments to further its rule- based approach and market-based agenda for the purpose of ensuring European energy security. The article illustrates the Union’s sectoral application of the acquis beyond its borders in its efforts to export its liberalization model and Europeanise its energy corridors in pursuit of European security of energy supply. DISCUSSION AND CONCLUSIONS. The article reveals a fascinating dimension to the Union’s role as a global actor by analysing the Union’s normative agenda which it pursues through the export of its acquis and rule-based market approach which it imposes on third countries and its strategic energy partner, Russia. In undertaking this analysis, the article shows that the EU’s efforts to reform Russia’s energy markets through its liberalization movement and European model, suggest an external dimension to its internal market rules given the implications for Russia and Gazprom.