EU must switch on to energy risks

At least on one issue Tony Blair, Jacques Chirac and Angela Merkel are united - the EU needs an energy policy. They also have an unlikely ally in George W. Bush.

In his state of the union address, the president drew attention to America's "addiction to oil" and linked energy policy to US national security pointing to the problems arising from American dependency on oil from the unstable Middle East. A similar case can be made for the EU. But the member states are reluctant to accept that in this crucial area there is an urgent need for action at the EU level.

For the last two decades the EU's demand for energy has been growing at around 2% a year. Assuming this growth continues, the EU will be importing more than 70% of its energy needs by 2025, up from the current 50%. The EU will also be in competition for energy with the major developing countries, especially India and China. As a result the security of supplies will become an increasingly important factor for the EU. Yet there is no strategy to deal with this crucial policy area.

The EU currently secures its energy from countries/regions on its periphery - Russia, North Africa, the Caucasus and the Middle East. Russia provides 40% of gas to the EU and the Middle East nearly 50% of its oil requirements. The recent problems in Ukraine and Georgia also reveal the potential for disruption of energy supplies. The fact that 60% of proven oil reserves and 50% of gas reserves lie in the unstable Middle East and North African littoral should give the EU some concern. For example, there could well be demands to use the oil weapon to punish European countries where cartoons of Mohammed were published.

EU documents have identified the problem but there has been no concerted political push to agree an energy policy. The European Security Strategy talked briefly of the EU's energy dependence as being "of special concern". In its Green Paper 'Towards a European strategy for the security of energy supply' the Commission regretted "that the Union suffers from having no competence and no cohesion in energy matters". In a further report 'EU energy supply security and geopolitics' it recognised "that EU foreign and security policy and trade policy are crucial energy policy tools to achieve future security of supplies". But it stopped short of calling for new competence in this area. In fact the constitutional treaty did contain provision for moving towards an EU energy policy but this is now in abeyance. The Council of Ministers has also been reticent. Last year it acknowledged the requirements of an EU energy policy as competitive markets, security of supply and environmental cap!

ability. But it then noted that national perspectives had to be taken into account - a point that has produced so far only an EU-level energy perspective and not an EU policy capable of integrating commercial, environmental and security issues.

Tony Blair sought to outline the parameters for an EU energy policy during the UK presidency: improving the EU's internal energy market through further de-regulation, an EU dialogue with key suppliers, greater energy efficiency and development of clean technologies. These key elements were accepted by the Austrian presidency.

Given recent incidents there is a growing momentum for an EU energy policy and the Commission and Parliament should seize the opportunity to make the case to the public, bolstered in the knowledge that the latest Eurobarometer polls show a majority of citizens do want to see an EU energy policy.

The Union should also give energy a higher priority in its action plans under the new neighbourhood policy. And the Union needs to put energy security at the top of its agenda with its strategic partners in Asia (China, India and Japan) as well as with the US.

Attitudes on energy are changing in the US and the EU has an important stake in the outcome of the debate. But with national politicians hesitant about granting the EU any more powers it is by no means certain that what appears to most people as a logical step will be translated into reality.

• Fraser Cameron is a senior adviser to the European Policy Centre. He writes here in a personal capacity.

Major commentary fetaure in which the author says that the European Union was in neede of an energy policy to deal with the worst-case scenarios in terms of energy supply. Energy should be given priority status within both the European neighbourhood Policy and the EU's strategic relations with india, China, Japan and the US.