EU urged to face up to foreign energy policy challenge

The Commission and Javier Solana have issued a joint paper proposing immediate actions that would allow EU nations to handle the growing dependence on foreign energy suppliers such as Russia.

The European Commission opened the debate on a future common European Energy Policy with the publication of a 'Green Paper' in March 2006. Completing the opening of European gas and electricity markets and stepping up relations with major suppliers such as Russia and OPEC, figured among the key proposals.

At the EU summit 17 June EU heads of states and governments will discuss a joint paper by the Commission and EU foreign policy chief Javier Solana proposing immediate actions to step up relations with key energy supplier, consumer and transit countries.

The 5-page document, entitled "facing external energy risks", seeks to create "stable legal conditions for energy investments and trade" at EU scale and globally. Among other ideas it proposes to build up strategic gas reserves along the oil stocks currently required under EU law. It also calls for diversifying gas supplies by completing infrastructure projects to "create new energy corridors" to Europe.

Algeria, for instance, currently covers about 10% of EU gas consumption, an EU official said. "If we double it, Algeria could be compared to Russia," he pointed out.

Turkey is also mentioned as a potential future "major energy transit hub" if it is rapidly integrated into the Energy Community Treaty of South East European countries. "Russia is obviously a crucial part," an EU official said as he unveiled the paper on Friday (2 June). He brushed away recent threats that Russia might divert its flows of natural gas to other consumer countries such as the US or China, saying the EU and Russia are "interdependent in the energy sector".

"Having [oil and gas] reserves is not enough," the official said, pointing to the "billions of euros" that Russia needs to tap them. "Money for Russia is crucial," he insisted. The paper proposes to "work towards a comprehensive agreement with Russia" that would cover "all energy products" and aim for "the integration of the EU and Russian energy markets in a mutually beneficial, reciprocal, transparent and non discriminatory manner".

However, a comprehensive agreement seems a long way off with Russia still refusing to sign the 1994 Energy Charter Treaty without a revision of the treaty's transit protocol. But EU officials are confident that a broader agreement "will make it easier for Russia" to sign the treaty. In particular, they say an agreement on trade in nuclear products could help break the stalemate. "Getting a mandate to negotiate an agreement would help," an official said. The agreement, the paper says, should be negotiated in the framework of the Partnership and Cooperation Agreement (PCA) with Russia that entered into force in December 1997.

"We should not pretend that we can solve everything in Brussels," the official said. But he added there is "a lot to do by private industry and governments".