The 2^nd Kyiv Security Forum continued its work on Friday, 7 November, in the afternoon. When discussing the subject of the session, "Business decisions and corporate interests vs. energy security and regional synergies", most experts concluded that the future of the energy sector belongs to independent producers. Besides, debating on possible reduction of mutual dependence between transporting countries and producing countries, the experts voiced doubts as to reasonability of building new pipelines, for example, of building routes to bypass Ukraine. In the analysts' opinion, it will be hard to the countries to get rid of mutual dependence in energy soon, so it would be more reasonable to formalize existing relations with appropriate arrangements.

"If talking about gas supply, Europe and other countries naturally need diversification", believes Boris NEMTSOV, member of the Federal Political Council of the SPS political party, Russian Federation. His forecast concerning a gas price for Ukraine was deplorable. "The price will most likely be higher - that's your pay for independence".

Noting many European countries' dependence on Gazprom, Mr. Nemtsov highlighted the only possible, in his opinion, option for democratization of the company: "The system of pipelines should be separated from Gazprom - that is, done the way it was done to Transneft company. Let the pipeline be owned by the State but it must be an independent company, and all gas sellers should be provided equal conditions". At the same time, Nemtsov remarked that, given existing prospects, Gazprom would most likely remain under the state control. The idea of building new gas pipeline routes from Russia is considered as not good by him because the pipelines will remain unfilled because of gas shortage in Russia.

"The more flourishing the economy, the greater the need to deliver energy from all sources - both conventional and unconventional. The world will be trying to meet the growing demand. It will entail greater tension in the producer-consumer environment", says Patrick van DAELE, General Manager, Shell Ukraine Exploration and Production. In his opinion, under such conditions energy should be produced at the most affordable level of its price. "No company is able to solve these issues by itself so we back up the idea of discussing elaboration of ideas jointly", Patrick van Daele said in his address.

Besides, he shared two scenarios of events in the world energy sector designed by Shell. "The first one says that countries will concentrate on their own energy issues. The second scenario assumes conclusion of international agreements. We discussed the scenarios in all the countries we are working in, and we should say the governments not always realize all the problems and therefore they often work along the first scenario", he summed up.

Unlike the Russian colleague, Georgy VASHAKMADZE, GUEU Foundation Director, still sees a future for new pipelines. "Nabucco, White Stream, Southern Stream - all this is possible if there is a correct attitude to the idea. Our goal is to connect the Caspian region with Europe and let European companies be present in the Caspian region but this matter should be approached in an integral fashion", he pointed out.

Simon PIRANI, Senior Research Fellow, Oxford Institute for Energy Studies, UK, described reduction of single-supplier dependence as the most important issue for Ukraine. He also noted that Ukraine has its own gas, which should also promote the country's stronger energy independence. At the same time, he was negative about the Ukrainian government's actions in energy matters: "I see no strategy from the government that would concern energy efficiency and energy saving. It must become a priority in the State's energy policy".

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A lively discussion was caused by statements of participants of the second thematic session -ALTERNATIVE ENERGY SOURCES AND ENERGY EFFICIENCY - INCREASED ENERGY SECURITY? - which was reduced to the conclusion that these technologies will be actively used in Ukraine when a young team has come to power.

Kevin ROSNER, Senior Fellow, Institute for the Analysis of Global Security, USA, voiced his concern about the mankind's reliance on oil, pointing out that 97% transport in America works on gasoline. Mr. Rosner gave examples of other countries using alternatives to oil, which is becoming increasingly popular, namely Brazil with ethanol and China with methanol, as well as biofuel.

Valeriy BOROVYK, Chairman of the Board, New Energy of Ukraine Alliance, presented projects of alternative energy sources under implementation by the Alliance, which include taking power off the Earth rotation and outputting energy, a power plant producing electricity out of wave energy, creation of wind farms in Crimea, and a geothermal power plant.

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Discussing the final subject - WAYS TO IMPROVE RELATIONS BETWEEN PRODUCERS, TRANSIT AND CONSUMER COUNTRIES OF ENERGY FOR STRONGER EUROPEAN ENERGY SECURITY - the experts concluded that the financial crisis could even stimulate better relations among the countries in the energy sector.

In the context of Russia's influence upon European energy security, Mikhail KRUTIKHIN, Editor of Russian Energy Bulletin, Russia, accentuated on the substantial contradictions that had arisen between Russia as a gas monopolist and Europe as a gas consumer. As far as Russia's use of its monopolistic status in the energy market is concerned, Mikhail Krutikhin voiced the hope that the need to cooperate with the European community would eventually make Russia work in a more civilized manner. Besides, in the expert's opinion, Russia's position may be affected by the world financial crisis, which will force the RF government to make certain decisions concerning Gazprom. "To overcome the gas supply crisis, Gazprom will have to increase its investments in production, which would promote development of the sector but would hardly be liked by the government because of not paying fast dividends. Or, under the crisis, the government could divide Gazprom into individual gas production companies", he said.

James SHERR, Head, Russia and Eurasia Program, the Royal Institute of International Affairs Chatham House, UK: "Russia does not welcome any competing projects in its region. This way Russia proves that all the projects implemented without it are dangerous. What choice does Ukraine have in this context? Only cooperation with Russia". Considering ways out of the situation, Sherr noted that "Russia was interested to be a monopolist, but at the same time, competition needs to be created and new energy sources be searched for. It does not exclude Russia from the energy system because that would be impossible but, perhaps, it will make its stand more moderate".

Mykhailo HONCHAR, Director of Energy Programs, NOMOS Center, suggested his own formula to improve the "producer - transit country - consumer" energy chain: strategic reserves plus integrated infrastructure plus diversification of sources plus transparency. Energy market improvement, in his opinion, also requires a more active role to be played by the International Energy Agency and the Energy Charter. At the same time, talking about cooperation between these organizations and Russia, he emphasized that there was no other way to improve the relations under the current reality but a dialog.

"The financial crisis has to some extent played into the hands in the issue with Russia because there had actually been no chance to stabilize the situation before", said independent expert Oleksandr NARBUT. "Today when investments are quite important to all countries, Europe has got a unique chance to reach understanding with Russia in the field of energy", Narbut says confidently. Therefore, he believes that Europe's first step in that direction should consist of adapting the Energy Charter for Russia. Besides, Europe's subsequent initiatives should be aimed at modernization inside transiting countries.

Tim GOULD, Programme Manager - Caspian, Caucasus, Southeast Europe, International Energy Agency, is sure that one should focus on transparency and openness issues today. Major directions on the road towards energy security, in the expert's view, consist of investing in energy infrastructure and diversifying sources of supply, but at the same time, Mr. Gould reminded that under such an approach one must clearly understand what countries should be offered new sources.