German companies strengthen their cooperation with Russian gas suppliers. OSW Commentary No. 64, 2011-10-24

Germany’s decision to give up the use of nuclear energy will force it to find a conventional low-carbon energy source as a replacement; in the short term, in addition to coal, this is likely to be gas. Due to their continued high debt and the losses associated with the end of atomic power, German companies will not be able to spend large funds on investing in conventional energy. First of all, they will aim to raise capital and repay their debts. The money for this will come from selling off their less profitable assets; this will include sales on the gas market. This will create opportunities for natural gas exporters and extraction companies such as Gazprom to buy back some of the German companies’ assets (electricity companies, for example). The German companies will probably continue to seek to recover the costs incurred in the investment projects already underway, such as Nord Stream, the importance of which will grow after Russian gas imports increase. At the same time, because of their debts, the German companies will seek to minimise their investment costs by selling some shares on the conventional energy market, to Russian corporations among others; the latter would thus be able to increase their stake in the gas market in both Western (Germany, Great Britain, the Benelux countries) and Central Europe (Poland, the Czech Republic). It is possible that while establishing the details of cooperation between the Russian and German companies, Russia will try to put pressure on Germany to give up competing projects such as Nabucco. However, a well-diversified German energy market should be able to defend itself against attempts to increase German dependence on Russian gas supplies and the dictates of high prices.

Returns from Income Strategies in Rural Poland. Factor Markets Working Document No. 64, August 2013

In order to stabilise and improve their income situation, rural households are strongly encouraged to diversify their activities both within and outside the agricultural sector. Often, however, this advice is only moderately pursued. This paper addresses issues of rural household income diversification in the case of Poland. It investigates returns from rural household income strategies using propensity score matching methods and extensive datasets spanning 1998-2008. Results suggest that returns from combining farm and off-farm activities were lower than returns from concentrating on farming or on self-employment outside agriculture. This differential is stable over time although returns from diversification have relatively improved after Poland’s accession to the EU. This is also visible in the fact that since 2006 returns from combining farm and off-farm activities have evened with returns from relying solely on hired off-farm labour, thus smoothing the difference observed before the accession. Further, over the analysed period, households pursuing the diversification strategy performed better than those relying solely on unearned income. Finally, in general, the income in households combining farm and off-farm activities was higher than in those combining two off-farm income sources.

Shale gas in Europe: much ado about little? Egmont Paper No. 64, March 2014

Introduction. Shale gas is an unconventional form of gas1 because its extraction is more difficult or less economical than that of conventional natural gas. It has become an important item of energy policy during the last years since new processes have allowed its extraction. In the medium term, shale gas should foster a reinforcement of the gas part in the world’s energy mix. In 2011, the IEA released an influential report entitled “Are we entering a golden age of gas?” This report suggests that shale gas could help substantially boost global gas use.2 It also warns at the same time that this success could bring into question the international goal of limiting the long-term increase in the global temperature to 2° C above pre-industrial levels. In the world economy, the impact of shale gas is increasing rapidly (especially in the USA, albeit apparently not as significantly as expected3). In the EU, its perspectives remain uncertain, for many reasons. Estimates are not reliable. Shale gas exploitation remains a controversial issue due to geology, lack of infrastructure and also fears for the environment and public health. The EU institutions seem to have a favorable attitude towards shale gas development while the Member States’ attitude seems to vary from enthusiasm to hesitation or opposition. Public opinion on the issue appears quite divided everywhere. This brief paper will examine various estimations of potential resources in the EU (§ 1), the potential costs and benefits (§ 2), the initiatives taken by the EU institutions (§ 3) and the national authorities (§ 4), and finally the emerging EU framework (§ 5). The conclusion is, rather surprisingly, that whatever happens on this front, this will not modify the present structural challenges of the EU in the domains of climate and energy.4