Europe’s increasing dependence on gas and oil imports, especially from Russia, is as dangerous as war. That was the conclusion of a number of experts during the second day of a European Parliament public hearing on 28 February, organised by the Committee on Foreign Affairs, which further analysed the need for a common European foreign policy on energy.

Two panels of experts, chaired by Polish MEP Jacek Saryusz-Wolski who was also rapporteur, concluded that Europe’s increasing reliance on Russia is making its security extremely vulnerable and thus the situation needs to be quickly addressed by diversifying the types of energy production within the EU as well as the sources of foreign imports.

The first keynote speaker was Eneko Landaburu, director general at DG Relex, who first underlined the European Commission’s active work for many years in enhancing energy relations with Europe’s key external energy partners through various methods and processes. A number of key priorities for the external energy sector for the next three years (as presented in the energy package) were then highlighted, in particular: an agreement on a new energy relationship with Russia in the framework of the new agreement to replace the current partnership and cooperation agreement, in which it is intended to reflect the key principles of the Energy Charter Treaty; reflecting the strategic importance of Ukraine’s partnership with the EU in the new enhanced agreement; enhancing bilateral relations with other key partners; gradually extending the Energy Community Treaty to Norway, Ukraine, Moldova and Turkey, which are already observers; increasing relations with key energy producers and transit countries and further looking into South America and the Caribbean; driving forward international agreements such as the post-2012 climate regime and the future Energy Charter Treaty; improving nuclear safety through the new Instrument for Nuclear Safety Cooperation; more cooperation with the Black Sea region; working on a new strategy on Central Asia and identifying new cooperation priorities for the Mediterranean region; developing a new initiative in the shape of an Africa-Europe Energy Partnership; and attaching greater importance to the further development of the EU energy relations with China, India and Latin America.

While reiterating that the EU clearly cannot tolerate the kind of disruptions that recently occurred in

Europe’s energy supplies, Mr Landaburu also stressed the importance of facilitating the construction of the necessary new infrastructure especially in the Trans-Caspian-Black Sea energy corridor and new projects in the Mediterranean which can now benefit from the new Neighbourhood Investment Facility, which aims at facilitating investments in the neighbourhood area in close cooperation with the EIB and EBRD. This

facility can also be

coordinated with the African Infrastructure Facility, in view of the need to facilitate the access of sub-Saharan gas resources to the EU.

Director for Long-Term Cooperation and Policy Analysis at the International Energy Agency (IEA) in Paris, Noé van Hulst said that one of the most pressing problems faced by Europe is that it is increasingly dependent on investment behaviour in third countries. Mr van Hulst also demonstrated how current trends show that we are on course for an unstable, dirty and expensive energy future and he suggested that in response, urgent government policy actions are required in two main areas, namely the promotion of energy investment and the promotion of energy efficiency.

Some internal solutions to remedy the situation were suggested by Prof. Jan

Horst Keppler, Professor of Economics at the University of Paris-Dauphine, Paris and Director of Ifri Energy Programme. Prof. Keppler argued that the role of prices in the energy problem is unclear and recommended the introduction of fiscal instruments to dampen demand and encourage substitution in the medium term. In Prof. Keppler’s view, the two most important tasks of Europe’s policy-makers are the formulation of consensus to balance the conflicting objectives of low prices, environmental quality and security of supply and, secondly, the intellectual leadership in advocating a multi-lateral approach to open energy markets.

Europe’s dependence on the behaviour of third countries is especially troubling since one of the main sources of Europe’s energy needs is Russia, argued a pessimistic Vladimir Milov, President of the Institute of Energy Policy in Moscow. Milov pointed out at a number of worrying aspects in Russia including the increasing role of the government in economic affairs, restrictions on foreign investment in the national energy sector, the failure of market reforms and monopolisation of the energy sector, the inefficiency of the national energy companies and concerns on reliability of future supplies, the arbitrary use of state’s regulatory powers in order to advance market positions of state-affiliated companies, and the systematic denial to enter the international legal framework on energy (Energy Charter Treaty).

Milov unhesitantly declared that the present environment is an unavoidable result of the policy shift in Russia that had happened since 2003. He sustained his argument by recalling what Russian President Vladimir Putin said in 2003 – “Gazprom is the key element of the state’s energy security system. And, not less important, powerful leverage of Russia’s economic and political influence in the world.” Milov concluded by saying that the only way to interest Russia in opening up would be to tie its prospects if investing into the European energy market to similarly permissive rules in Moscow and advised the EU to unite behind such a requirement of reciprocity of a legal nature.

As an alternative to the threat of over-reliance on Russian energy imports, Zeyno Baran, director at the Centre for Eurasian Policy, Hudson Institute, Washing-ton, suggested placing more emphasis on alternative supply routes such as the planned Baku-Tbilisi-Ceyhan (BTC) and Nabucco pipelines. Others however rebutted this proposal, arguing that these projects would only provide an alternative transport route and not an alternative source of energy.

Others also reminded the European Parliament that while establishing links with other governments such as Azerbaijan and Turkmenistan, the goals of furthering democracy and human rights are not to be forgotten.

Other experts including Helga Schmid (director, Policy Unit, Council of the Ministers), Coby van der Linde (director, Clingendael International Energy Programme in The Hague) and Jennifer Morgan (director, Climate and Energy Security, E3G, Third Generation Environmentalism in Berlin), also evaluated ways of putting security of energy into the CFSP and tried to reach a conclusion on whether a common European foreign policy on energy is really the way forward.

In the end, all experts agreed that during the EU Council, which was later held on 8 and 9 March, stronger emphasis was to be made on nuclear energy, because the impact and efficiency of renewable energy is yet uncertain.

Contrary to these conclusions however, in the European Council, the EU-27 leaders agreed on bold targets for renewables rather than on incentives for nuclear energy, as the latter faced stiff opposition from a number of members, including Britain, Germany and Austria.

In Brussels, in fact, the EU heads of states agreed on a legally-binding objective to meet 20 per cent of their energy needs with renewables such as wind power, in a fresh drive to put the EU on a low-carbon economy by 2020.

They also agreed to achieve at least a 20 per cent reduction of greenhouse-gas emissions by 2020, which targets are significantly higher that the eight per cent overall target that the EU agreed to reach by 2012 under the Kyoto Protocol.

Only time will tell who was right.

For sure though, the years ahead are challenging times which call for more will and determination, not only from our governments but also from citizens who need to be aware of – sooner rather than later – the imminence of this pressing energy problem which, if not addressed, will jeopardise the survival of future generations and of our planet.

Mr Mizzi, a research analyst at Forum Malta Fl-Ewropa, recently attended the European Parliament’s public hearing. His visit was made possible courtesy of the European Parliament Information Office in Valletta.

The first part of this article appeared last Thursday.

More information is available from Forum Malta fl-Ewropa on tel.: 2590-9101 or email: [email protected]

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