EU takes new step toward unified energy policy




By Aude Genet
AFP
BRUSSELS
Petroleumworld.com 03 13 06

European ministers will take a new step on Tuesday toward strengthening EU energy policy amid concern over supply security and the trend toward protectionism in some member states.

The energy ministers, meeting in Brussels, will debate a green paper released by the European Commission last week recommending that EU states speak with one voice on natural resources and diversify their supply sources.

They will also draw conclusions about the bloc's sketchy energy policy, whose short-comings were exposed in January when western European natural gas supplies were hit by Russia's supply conflict with the Ukraine.

With their positions in hand, the president of the EU's executive wing Jose Manuel Barroso will travel to Moscow on Friday for talks with President Vladimir Putin on "a new energy partnership with Russia."

Two days earlier, energy ministers from the rich G8 nations -- which include Britain, France, Germany and Italy -- will hold talks in Moscow.

"We want to work with Russia on energy security in a positive and constructive way," Barroso said last week.

"Europe and Russia are energy interdependent, and the message that I will take to Moscow is that on energy, as in many other areas where we have common interests, we must maximise our cooperation," he said.

Russia supplies around 20 percent of the natural gas needs of Europe -- the world's second largest energy market -- and the commission fears that the EU could become increasingly reliant on imports.

"If no measures are taken, in the next 20 to 30 years around 70 percent of the Union's energy requirements, compared to 50 percent today, will be covered by imported products," the executive argues in its green paper.

The dispute between Russia and Ukraine, through which pipelines cross to supply some EU states, also highlighted the value of energy as a foreign policy tool, as the gas cuts brought Kiev to its knees in a particularly cold winter.

"We are now moving toward considering whether it would be a good idea to have higher levels of gas stocks," since the crisis, said a senior official with the Austrian EU presidency.

"This is very expensive to do and it is not always straight forward," he said, confirming that the Union could move ahead despite tall obstacles.

On the domestic front, the energy ministers will also take note of the commission's warning to interpret gas and electricity regulations "according to their spirit and not just their letter."

It has come amid soaring energy prices and a wave of energy sector takeovers, as some countries try to protect domestic firms even though Europe is preparing to fully liberalise its market by July next year.

Spain may change its laws to make it more difficult for German energy giant E.ON to take over Spanish group Endesa, while France announced the merger of state-controlled Gaz de France with Suez, in a move that Italy complains was to thwart a bid by Italian group Enel for Suez.

The green paper maintains that it is time to open up rather than consolidate if energy consumers are to be given real non-discriminatory access to gas and electricity supplies from different national networks.

The commission has even floated the idea of a "European energy regulator", but according to one EU diplomat: "Many countries are likely to find that it goes too far and that for now harmonisation is better."

AFP 03 12 06

Copyright © 2006 AFP. All rights reserved.

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