In my own simplified thinking, I find it useful to categorize discussion and concepts on these issues (Euro-Russian energy dilemma) into four categories:

1. Players
1.1. Financial players (i.e. voices heard through FT & Economist)

2.1. Government planners (i.e. voices heard through ministers, official and some think tanks)

2. Motives (or goals)
2.1. Enable more financial opportunities in energy markets (IPOs, take-overs, mergers, price gouging, etc), esp. in France & Germany. That is, possibility to redistribute wealth on the energy markets.

2.2. Ensure a supply of both STEADY and INEXPENSIVE energy in required forms, while minimizing unacceptable risks & dependencies. This is mostly seen, not as an end-goal, but as a tool to ensure economic growth opportunities (energy is and required by wealth).

3. Desired actions (for ensuring achieving goals)
3.1. Liberalize energy markets. Privatize NECs (national energy companies). Open up pricing schemes, long term delivery contracts and bilateral trade relations.

3.2. Diversify energy sources (esp. from various geographical sources). Ensure long term steady contracts (bilateral binding). Sometimes these actions are in conflict with each other.

4. Rhetorics (the way things are portrayed, often unrelated to motives or actions)

4.1. "Russia is untrustworthy".
"Gazprom doesnt play by free market rules"
"EU is in energy death spiral, only solved by liberalization of all energy markets"

4.2. "Russia should keep EU happy (to ensure energy infrastructure worth and future existence of customers)"
"EU will go nuclear energy in a swift transition, if Russia doesnt play ball"
"There is no problem with Russian energy reserves, just some political arm wrestling. Just move along. No need to worry."

I have intentionally left out the Russian side out of this, because of lack of information on my part. I am guessing, that Russian interests are probably plural and non-unified on these issues.

What I have found discomforting and Jerome and other bloggers have on several occasions pointed out, is that the following questions have not been touched in detail (at least in public mainstream discussion, afaik):

I) If energy market liberalization is such a great thing for EU, what explains the end use energy price difference between liberalized UK (fairly high) and say nationalized France (more moderate)?

II) If UK could not produce inexpensive energy with a liberalized market at the time when they still had domestic oil & gas production in significant volume, how would France & Germany be able to do that withOUT the fossil fuels during a time when more unified / big infrastructure investments are more likely to be needed? Is the "solution" to sell the same amount of electricity back and forth in the grid using Enron/California style rules?

III) In a time of decreasing primary energy sources, where will the new energy inputs come from? More nuclear? LNG from Iran? It is impossible to import something which is not there. One cant diversify to countries that do not have anything worth exporting.

IV) What is the non-propagandist view of both Russia's energy reserves AND its future capability (not assumed willingness) to export it, if one takes into account their domestic energy consumption increases? I.e. could they export, which fuels, in what quantity, for how long and where exactly?

V) Is there really no unified understanding of energy challenges within the big EU countries about the energy challenges ahead (and related geo-strategic consequences)? Is it really UK+US trying to pit the rest of old EU against Russia? What about the new entrants to EU? What about the smaller and less energy hungry countries?

VI) Is the bio-fuel talk, goals and investment within EU really just a smoke screen or a minor energy diversion that most politicians can see through? Or do some countries or politicians really believe these are tools for solving energy security, diversification and dependency issue (not to mention global warming)?

I could of course asks smaller country-specific questions, like why are energy companies _guaranteed_ (not just given an opportunity) higher margins on electricity markets, when volatility goes up? This pertains to the Nordpool market and energy companies, some of which have a really distorted "guaranteed lowest price scheme" which enables them to automatically make bigger windfall profits the higher the volatility on the shared electricity pool market. What has this kind of system have to do with "liberalized markets", which we are claimed to have now? Whose benefits is this? Where are the inexpensive energy prices promised?

But I digress, this is about EU, its energy policy (or lack of one) and the muddiness of the public discussion.

To me it looks like we have already been sold full liberalization of the markets, without actually trying to show benefits, or showing actual new solutions to future diminishing primary energy sources. All we have gotten is emotional scare mongering and inflated rhetorics.

That is, emperors new clothes, without anybody calling the bluff (except, Jerome and a handful of others).

In this respect, I really do envy North Americans. At least they have discussion about future supply of energy sources, required investments in infrastructure and actual actions to solve these dilemmas (even if I may not agree with all the discussions and the actions taken to secure supplies).

Or maybe it just looks greener from this side of the fence :)