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.

 

 


© Copyright 2006 NetContent, Inc. Duplication and distribution restricted.

Visit http://www.powermarketers.com/index.shtml for excellent coverage on your energy news front.

.