US envoy: let’s kick the energy habit

By Andrew Beatty

Date: 06/04/06

The recently installed US ambassador to the EU says the conditions are now right for the EU and America to work more closely together to develop more energy-efficient technologies that would help reduce dependence on oil and gas from the Middle East, Russia and elsewhere.

In his first major interview since taking up the post, C. Boyden Gray said this June's EU-US summit could see moves towards increased pooling of new technologies such as clean coal and a deal to create standards for the use of bio-fuels such as ethanol for cars.

"If the two sides work together sharing technologies, sharing approaches, making sure that standards for the fuel used in cars don't diverge too far, you can market it on both sides of the Atlantic, both the cars and the fuel," he said.

The European Commission is currently conducting a review of its fuel quality standards which set the limits for ethanol in car fuels.

The EU's limit for ethanol blended into petrol currently stands at 5%, but many are lobbying to see the levels increased to 10%, in line with US standards.

"If all of this can be worked out, which I think it can be, then I think you have a very, very positive programme for energy diversification, reduction of oil dependence, increased security, increased environmental benefits and for the United States to reduce its current account deficits," said Gray.

His comments came as energy dependence features prominently in political debate on both sides of the Atlantic. EU leaders on 24 March adopted a plan to improve energy security, including measures to increase the use of renewable energy and biofuels.

US President George W. Bush called for measures to end the US's "addiction to oil" during his State of the Union address earlier this year, announcing a plan to increase funding for clean energy research at the Department of Energy by 22%.

Highlighting what appears likely to be a theme of his ambassadorship - regulatory reform - Gray said that a major part of promoting innovation in energy technologies was for the legal burdens on companies to be simplified and reduced.

"It cannot be divorced from the whole issue of competitiveness and the Lisbon Agenda, there is a link there and I don't think that should be lost in terms of where the EU and the US can engage," he said.

A reduction in red tape could also provide a major boost for US agricultural producers. The lobby group 25x25, which represents many of the major US farming groups, is pushing hard to see 25% of the US' fuel needs met by renewable resources, including agricultural production, by 2025.

Some 15% of US agricultural land is currently being used in the production of biofuels, accounting for 3% of energy needs.

Preliminary talks on how the EU and US can co-operate on biofuels were recently held between the Commission's Director-General for Transport and Energy Matthias Ruete and US representatives.

Although a spokesperson for the Commission said that it was too early to say what the outcome of the talks would be, Gray appeared confident a deal could be reached.

In 2003 EU member states agreed to source 5.75% of their energy needs from biofuels by December 2010. Although few look set to achieve this goal, EU leaders last month agreed to increase this to 8% of energy needs by 2015.

The Swedish government says increasing the permitted ethanol content in petrol could help reach this goal.

Interview with C. Boyden Gray, the recently installed US ambassador to the EU, who said that the US and the EU should share technologies to develop new sources of energy.