Energy policy could mirror trade

By Andrew Beatty

Date: 09/02/06

The EU could have powers to decide energy policy similar to those it currently holds in trade, where it negotiates for all member states, according to proposals under consideration by the European Commission.

In a move to revise dramatically the way the EU secures and uses energy, the Commission is to propose that greater powers be granted to the EU institutions to create a common foreign energy policy.

Officials say that the new powers could range from the Commission having the right to negotiate energy deals with international partners to the Council of Ministers having an energy representative, playing a similar role to Javier Solana in the area of foreign policy. A new agency to promote co-operation might also be created.

Triggered by record oil prices and the recent crises over gas supplies from Russia, the proposals are likely to prompt intense debate when energy ministers gather in March for an extraordinary meeting in Vienna and later in the month when heads of state and government meet in Brussels.

The Commission's proposals have also been prompted by projections of Europe's increased dependency on imports. Dependency on imported oil and gas, which is currently 50%, is projected to rise to 70% by 2030.

The Commission is expected to adopt a Green Paper on energy policy on 8 March. So far 22 member states have submitted their ideas on an energy policy to the Commission. A spokesperson for the EU executive said that there appeared to be a consensus around developing a common foreign energy policy among the member states.

A recently published poll, which was conducted before the recent crises, showed that 47% of respondents wanted to see decisions on energy taken at an EU level, against 37% who backed them being taken at national level.

While the EU does hold energy dialogues with Russia and other countries, co-ordination of energy policy is still largely the preserve of member states.

"At the moment it is not one voice...it is 25 members dealing separately, which weakens our position," said a Commission official.

Creating a dialogue with other big consumers, such as the US, China and India is also under consideration.

In order to bring member states closer together, the Commission wants to initiate a debate on the mix of energy sources, which today differ vastly across the EU.

It is a debate that is likely to include the role of nuclear energy which remains controversial in many member states.

In France nuclear energy amounts to around 30% of total energy used and 80% of its electricity, while in Germany nuclear supplies less than one-third of electricity production. The Austrian government has repeatedly voiced opposition to nuclear power, but Finland is building a new nuclear plant.

The wide-ranging proposals will also touch upon the need to improve co-operation on strategic gas and oil reserves, promoting new sources of energy and completing the EU's internal energy market.

Preview of European Commission proposals that would give the EU greater powers to create a common foreign energy policy.