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EU Leader Sees Lack of Coordination As Energy Security Handicap

Posted on: Wednesday, 16 April 2008, 09:01 CDT

Text of report by French daily economic and financial newspaper La Tribune website on 15 April

[Commentary by Benita Ferrero-Waldner, European commissioner for external relations and European neighbourhood policy: "Towards a European Energy Diplomacy"]

Energy supply and climate change impose themselves as major challenges for the future generations. The European Union is faced with a new world energy equation: it is necessary at the same time to ensure the diversity of sources of supply and transport routes and to include more of them in our energy mix. The European Union has an essential role to play in taking up this challenge.

Our internal market, once better interconnected, will give us more fluidity and solidarity in the event of a crisis. That is the aim of the third package of legislation on the internal energy market. Improving our energy efficiency by 20 per cent is within our grasp. Introducing at least 20 per cent renewable energies and 10 per cent biofuels into our energy mix will substantially reduce our hydrocarbon imports. Our outlay on energy would in this way be reduced by more than 50 billion euros in 2020. But we must not kid ourselves. Even when all the measures of the third package have been applied in 2020, it will still be necessary for us to import more than 50 per cent of our energy in various forms, mainly hydrocarbons.

For the time being, the EU's problem remains, and will remain, the management of its imports and the security of its supplies, particularly gas. Today, the gas supplies from third countries are imported mainly from Russia (46 per cent), Norway (27 per cent), and Algeria (20 per cent). In this context, the difficulties are increasing. The 100 dollars a barrel mark has been crossed. We are having to face growing competition from other consumer countries and the renationalization of their resources by the majority of producer countries.

Based on the oil model, the European Union's main external gas suppliers wish to form a cartel. This requires us to show great vigilance. Russia is and will remain our main energy partner, but our needs are increasing faster than Russian production. Diversification is not just a political choice, it is a responsibility towards our fellow-citizens. That is why the Commission is working with other partners who are key to our energy security. In the East, agreements have been concluded with Azerbaijan, Kazakhstan, and Ukraine. We are finalizing the negotiations with Turkmenistan. We actively support the development of the trans-Caspian-trans-Black-Sea energy corridor and the upgrading of the Russian gas transit infrastructure through Ukraine, which is strategic for our supplies. In the South, in addition to Algeria, with which we are negotiating a strategic partnership, we have finalized agreements with Egypt, Morocco, and Jordan.

The finalizing of discussions on a new agreement with Libya will open up serious prospects for our boosting supplies from that country. We are advancing in this way towards a Euro-Mediterranean energy market. The European Commission is studying new projects for interconnections in the Middle East and the Levant. We want to create an energy partnership with Iraq. I will shortly be going to the Arab-Persian Gulf to intensify our cooperation with the countries of that region. All this diversification makes sense only with real markets inside the European Union. Therein resides the whole importance of the Nabucco gas pipeline project, which will be a strategic terminal infrastructure for the trans-Caspian-trans- Black-Sea corridor, of the trans-Levant gas pipeline, and of the future interconnections with the region of the Gulf and, one day, with Iran, when the political situation allows it.

Absence of Coordination

Our efforts have already met with a response. In parallel to Nabucco, Russia is developing some oil pipeline projects, such as Nord Stream, Blue Stream 2, and South Stream, in order to maintain its place in the European market. It has to be recognized that Russia is pursuing its objectives in a coherent and strategic manner. Is the European Union capable of doing as much? In truth, our problem is not so much Russia as the weakness of our ability to make a collective response. For some people, our difficulties stem from the fact that, despite the advances of the Lisbon Treaty, there is no Community competence in energy.

For me, the most serious thing is the absence of coordination and transparency within the European Union, which would be necessary if we are to speak to our partners with a single voice. In order to protect our fellow-citizens' energy security we need better coordination at the Community level and among member states. The European union enjoys a considerable advantage: its economic power. It has to make use of this advantage towards its competitors and in its negotiations with the supplier countries.

Supplying a market of 500 million consumers represents an impressive negotiating strength compared with 27 fragmented and divided markets, be it in terms of volume or price. We need to develop a real European diplomacy for our energy security, one which will form part of the European security strategy. Energy, as at the beginning of European building, with the European Coal and Steel Community and Euratom [European Atomic Energy Community], can become a new factor in European integration.

Originally published by La Tribune website, Paris in French 15 Apr 08.

(c) 2008 BBC Monitoring European. Provided by ProQuest Information and Learning. All rights Reserved.

Source: BBC Monitoring European

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