EU acknowledges holes in its energy policies
 
Jan 5, 2006 - International Herald Tribune
Author(s): Dan Bilefsky

Just hours after Russia ended a standoff with Ukraine that disrupted gas supplies across Europe, EU officials acknowledged that the dispute had exposed holes in the Continent's energy policy.

 

"Europe needs a clear and more collective policy on the security of our energy supply," said Andris Piebalgs, the EU's energy commissioner. "Now, powers reside at the national level and we need a Europe-wide approach."

 

The 25-member EU which imports 25 percent of its gas from Russia welcomed the agreement between Russia and Ukraine to end their gas war and said it hoped it would assure the Union's gas supplies in the long term.

 

But Piebalgs and other energy officials acknowledged that the crisis had underscored Europe's over-dependency on energy imports, its patchwork of contradictory national approaches and the limitations on Brussels's ability to intervene during energy emergencies.

 

EU officials said the chief lesson of the standoff was that the Union was too dependent on foreign energy sources; the European Commission estimated that foreign sources will account for 70 percent of EU usage by 2020.

 

"Dependency on Russia should be reduced," said Martin Bartenstein, economics minister of Austria, which now holds the EU's rotating presidency. He said energy supply and security would top the agenda at an EU summit meeting in March. Developing a common energy policy faces many difficulties, analysts said. Each country has its own policy on managing and stocking energy sources, making coordination cumbersome. During crises, countries can opt to pool energy resources, but the European Commission has no power to force them to do so. Two years ago, member states rejected proposals to create stores of gas across the bloc.

 

 

William Ramsay, deputy executive director of the International Energy Agency in Paris, warned that the lack of cohesiveness could be debilitating if an energy shock became protracted.

 

"You have some countries with very liberalized markets like Britain," he said, "and others like Italy, France and Germany where you have companies with dominant positions, and this asymmetry can prove dangerous in a crisis."

 

Ramsay said that several European countries had large reserves in place, but that unlike the United States, where gas stores could be transferred easily among states, too much regulation in Europe made national transfers difficult.

 

The commission said it would examine how Europe could offset dependence on Russia by turning to suppliers like Algeria, Libya and Nigeria and by developing alternative supply routes using pipelines from the Middle East and Central Asia through Turkey to Austria.

 

Ramsay said that offsetting the EU's dependence on one energy supplier was imperative, regardless of whether the Middle East or North Africa could prove more politically volatile than Russia. "Five unstable supply sources are better than depending on one unstable source of supply," he said.

 

The standoff between Russia and Ukraine has prompted Britain and Germany to consider building more nuclear power plants. But energy experts warn that getting European countries to rally around nuclear energy would not be easy.

 

EU officials said the weakness of the Union in the face of an energy crisis was illustrated by the meeting Wednesday of the bloc's Gas Coordination Group which consists of industry experts and convenes during events like energy disruptions to discuss contingency plans.

 

People present at the meeting said the national experts were so relieved about the 11th-hour agreement that they decided to break up the meeting hours ahead of schedule. Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies, said he doubted the crisis would act as a catalyst for a radical EU energy shake- up. "It will take years," he said, "to get agreement to build the infrastructure required for things like renewable energy or nuclear power plants, and by then everyone will have forgotten this three- day event."

 

 


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