As Poland settles into another cold winter, increased competition within Poland's energy sector is becoming vital to its future economic development (and security) as well as that of its neighbors.
Like any wise investor, Poland too should look to mitigate risk by diversifying its portfolio of energy investors and suppliers. Poland's decision to grant exploration rights of potential shale-gas resources to two major US oil companies is a step in the right direction.
A few days ago PGNiG, Poland's state-run gas distribution monopoly, finalized a gas delivery contract lasting until 2037 with Russia's Gazprom. While improved pricing and delivery mechanisms with the Moscow-based energy giant are positive developments for bilateral relations - especially after last winter's supply disruptions across the EU, including many Central European member states - expanding supplies of Russian gas to nearly 75 percent makes Poland even more dependent on a specific source and supplier.
Even if successful, shale-gas drilling may not be able to ease supply burdens or boost domestic reserves in the short-term, however, it can provide Poland with long-term opportunities to become more energy independent, attract diverse foreign partners and investors and perhaps even develop a viable energy-export sector.
Additionally, by pushing for greater demand side liberalization, especially natural gas, the government would allow for more competition and ease barriers to entry within Poland's domestic market.
Finally, development of a diverse and viable energy sector could provide Poland, as well as its Central European neighbors with the necessary momentum to engage in greater EU convergence efforts in energy security. Alternatively, Poland and other vulnerable markets across Europe risk pursuing policies that undermine EU integration, and worse yet, gamble with its energy future.
