February 20, 2006

EU needs “same voice” for energy policy-draft paper

By Jeff Mason

BRUSSELS (Reuters) - European Union countries must "speak
with the same voice" on energy issues, integrate gas and
electricity grids, diversify fuel supplies and lead the world
in energy savings, the EU's executive Commission will

A highly anticipated paper, a draft of which was seen by
Reuters, lays out the groundwork for a common energy policy in
the 25-nation bloc by listing priorities for discussion by EU
leaders at a summit in March.

British Prime Minister Tony Blair and German Chancellor
Angela Merkel recently renewed calls for more coherence on
energy issues which have intensified after a Russia-Ukraine gas
dispute temporarily cut supplies to Europe earlier this year.

Concerns about any use by Russia of its vast oil and gas
reserves for political purposes plus the global surge in oil
prices has focused EU governments on the need to reduce their
reliance on foreign sources of fuel.

Official predictions show the EU's import dependence could
grow to 70 percent of general energy consumption by 2030.

The paper, entitled "Secure, Competitive and Sustainable
Energy Policy for Europe," explores diversifying EU supply "by
fuel, by source and by supply route," establishing ways to
intervene if specific EU nations face energy crises and acting
together when addressing the rest of the world on energy

Internally, the EU should become a global leader in
research and development of energy sources with low emissions
of carbon dioxide (CO2). It should also remain "the most energy
efficient region in the world" and work hard to ensure gas and
electricity customers can choose between suppliers.

The paper, drawn up by Commission energy experts, makes few
concrete proposals, reflecting the difficulty in forming a
common vision from a patchwork of energy policies that many EU
states consider sovereign matters.


In addition to an already successful EU "dialogue" with
Russia, the paper suggests adopting cooperation pacts with
"other key producer and transit partners of the EU, notably our
Eastern neighbors, the Caspian Basin, Central Asia, Southern
Mediterranean, the Middle East and the Gulf region."

The paper took a neutral stand on nuclear energy, calling
for a "transparent and objective debate" on its role and saying
the costs and advantages should be spelled out.

"However an EU debate must not impinge on the sovereign
right of member states to decide in this area," it said.

On energy efficiency, the paper said the Commission was
studying a system to track energy savings through tradable
certificates, and it urged the bloc to promote energy savings

The paper said a "road map" may be needed to reduce
Europe's dependence on imported oil by way of energy efficiency
in the transport sector and using different types of fuel.

It revisited the controversial issue of EU oil stocks,
which could be made more readily available for emergency
release and more transparent by regular publication of stock

It also questioned whether Europe's gas stocks would be
sufficient if an emergency disruption to supply occurred.

The paper said 820 billion euros ($973 billion) of plant
and infrastructure investments would be needed over the next 20
years. EU grants and loans could have more focus on energy
security, it said.

The report also renewed a call to improve connections
between EU countries for gas and electricity. "For a real
European electricity and gas market to develop, the electricity
and gas grids have to function as European grids," it said.

Last week the Commission said it would start antitrust
probes to open gas and electricity markets to more competition.