26 November, 2006
For a European Strategy on energy, sustainability, competitiveness and security of supply
During the first semester of 2006, Russia cut off the gas supply to Ukraine and Georgia and influenced the results of the elections in Belarus by threatening to increase gas prices. At the same time, the shortage of oil reserves – caused by instability in countries like Iraq- and the growing oil demand in emerging countries has driven the oil prices up to 78$/barrel in July 2006 – the same barrel was worth only 25 $/barrel in 2003.

Energy supply, now more than ever, is vital for the competitiveness, security and political stability of any country.

Therefore, the UEF observes that if the situation is left untouched:

-    the European – and global - energy demand will continue to grow (world demand for energy is expected to rise by some 60% by 2030) whilst the European energy reserves will continue to diminish (today, the EU covers 50% of its energy needs, by 2030, it will be 70% dependent on energy imports),
-    the increase in energy prices will damage the competitiveness of the European economy,
-    energy supply is becoming more and more a political weapon in a globalised world, and Europe runs the risk of being submitted to the political leverage of its energy suppliers.

In this context, UEF welcomes the green paper of the EC on a “European Strategy for Sustainable, Competitive and Secure Energy” and agrees upon the necessity of the following measures:

-    creating a single European electricity and gas market through the realisation of a trans-european network,
-    enhancing the security of the EU’s energy supply,
-    diversifying energy sources and suppliers, in order to balance sustainable energy use, competitiveness and security of supply,
-    taking into account the environmental effects of any energy strategy
-    increasing energy efficiency by a 20% before 2020 and a European energy strategic reserve,
-    creating a strategic European energy technology plan,
-    working on a coherent external energy policy.

Recent events have proven that separate bilateral negotiations on energy supply weaken every country’s position and, as a result, that of the Union as a whole. Suppliers, like Russia, have so far effectively played European countries against each other. In order to take advantage of the EU’s bargaining power as the second largest energy consumer in the world, and to provide safer and cheaper energy supply, Europe has to have a sensible, collective and unified energy policy.

Energy supply is in the core of every Member State’s national policy. It provides the fuel that keeps the European economy working and therefore represents a strategic competence that countries are reluctant to give away. However, without a single European energy policy, the cost of one-to-one negotiations could soon impair European competitiveness and threaten the future economic development of the Union.

Therefore, the UEF

-    welcomes the European Commission’s Green Paper as a step in the right direction for the EU’s energy policy,
-    urges the Member State governments to take on board the ideas it outlines and implement them urgently,
-    commits itself to work on a national level, pressuring governments to ensure that energy policies, according to the principle of subsidiarity, are dealt with at the most appropriate level
-    calls on the government of the Russian Federation to sign the Energy Charter Treaty,
-    calls for energy to become a WTO competence
-    emphasises the provisions of the draft European Constitution in the field of energy policy, which aim at ensuring the functioning of the energy market and of the security of energy supply in the Union, as well as promoting energy efficiency and energy saving, and the development of new and renewable forms of energy (Art III-256),
-    urges the industry and business to invest in R&D to create energy efficient goods and maximise the potential of alternative energy sources.   

Finally, the UEF must support the creation of a European Agency on Energy, Environment and Research, modelled on the European Community for Coal and Steel. This Agency should have real power and be governed by a supranational committee and administer its own resources.

Time is of the essence, we must act now!

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