EU to issue
warning on foreign energy use
Mar 7, 2006 - International Herald Tribune
Author(s): Judy Dempsey
The European Commission will warn governments Wednesday that they are
failing to adequately curb fuel consumption and develop alternative
forms of energy, a trend that may push Europe's reliance on foreign
energy sources to dangerously high levels in coming decades. But critics
said the 20-page strategy paper, to be unveiled by the European Union
energy commissioner, Andris Piebalgs, amid a growing debate about the
continent's energy security, missed a chance to tackle Europe's real
energy predicament. The document, obtained by the International Herald
Tribune, is meant to help EU energy ministers define a common energy
policy at a crucial meeting later this month.
Amid pressure from automotive and industrial interests, however, it
does not address controversial energy consumption issues, like the
automobile's pre-eminence and the industrial sector Europe's two largest
users of energy. It also avoids looking at attempts by France, Spain and
others to shield their companies from foreign bids to create national
energy champions before the EU's energy market is fully opened to
competition in mid 2007. Instead, the commission presents a largely grim
assessment of Europe's growing demand, warning that "around 70 percent
of the Union's energy requirements, compared to 50 percent today, will
be met by imported products."
"The new energy policy lacks vision and proposes a do-nothing
approach," said Claude Turmes, coordinator of the industry, research and
energy committee in the European Parliament.
"There are two main problems with the paper," added Turmes, who is
also vice president of the Greens and the European Free Alliance in the
European Parliament. "It is not possible to build a European market
while leaving competition control on the national level," he cited as
the first problem.
Turning to the second problem, Turmes said: "It is impossible to
address energy policy without tackling the issue of transport, since 96
percent of energy used in the transport sector is oil. Yet transport is
not even one of the priority issues in the paper."
His group is to meet on Tuesday in Vienna to present a
counterstrategy. Roughly half of the natural gas consumed by the
European Union comes from Russia, Norway and Algeria. If present
consumption patterns continue, the commission said, imports would
increase to 80 percent over the next 25 years. To meet this energy
demand and to replace an aging infrastructure, investments of around 1
trillion, or $1.2 trillion, will be needed over the next two decades,
according to the policy paper.
A failure to curb Europe's growing appetite for energy is taking its
toll on the climate. The commission said world energy demand and carbon
dioxide emissions the main culprit for global warming could be
approximately 60 percent higher by 2030.
To meet these challenges, the commission outlined a three-point plan
calling for governments to enhance the security of energy supplies,
increase competitiveness within the energy market, and raise the bar on
environmental protection.
To secure Europe's energy supplies, the commission recommended that
the Union adopt "a clear policy on diversifying natural gas supplies."
It suggested building a new infrastructure, including terminals for
receiving liquefied natural gas and independent pipelines from the
Caspian region and North Africa "into the heart of Europe."
It also proposed establishing a single European grid and increasing
the energy interconnections between the member states to allow a
European electricity and natural gas market to develop cooperation
because another agreement was struck in 2002 has so far "not been
satisfactory." The commission was less specific on how to create more
competitiveness in the energy sector despite threats last month by the
Competition Commission to start legal proceedings against companies that
hinder competition by denying smaller producers easy access to the
distribution networks.
It called for "open and competitive markets" and insisted that the
creation of a "truly competitive single European electricity and gas
market represents a major opportunity for Europe." The paper expressed
concern that "many markets remain largely national and dominated by a
few companies. Many differences remain between member states' approaches
to market opening, preventing the development of a truly competitive
European market." But the paper offered no solution to the problems. On
renewable energy, the commission adopted a cautious approach, suggesting
a long-term efficiency campaign, including efficiency in buildings but
omitted mentioning a more integrated railway network and more investment
in cars not based on oil.
On the other, it recognized that the Union's renewable energy market
was one of the fastest-growing sectors. It accounts for half of the
world market and employs more than 300,000 people.
There are differences, too, among member states over how far
governments are prepared to invest in renewable energy sources, like
biofuels and wind and solar power, and a European-wide railroad network.
Over the past few weeks, most of the member states have submitted
proposals to the commission, and analysts said that that explained the
generalized and often cautious stance.
The French proposals played down efforts for an integrated network,
while Germany called for the liberalization of the electricity and
natural gas markets and more diversification over how energy is
transported.
The member states from Eastern Europe that depend almost completely
on Russia for their oil and natural gas said that they wanted a much
stronger and more united European approach. They said that the principle
that member states are responsible for the security of their own power
supplies was no longer sufficient.
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