Energy Politics

Chapter 8. Europe

Chapter 8 Europe The formal integration process that led to the formation of the European Union began with energy cooperation. The first treaty-based organization among the European states was the European Coal and Steel Market (Treaty of Paris, 1951); the second was the European Atomic Energy Community (EURATOM, 1957). The EURATOM Treaty was signed the same day as the Treaty of Rome that established the European Economic Community. Despite the fact that energy was one of the first spheres of common action in postwar Western Europe and a driver for Europe’s integration, the EU has not yet adopted a common energy policy and the member states sometimes seem to have an aversion to discussing common energy policies. As a result, until 2007, common EU energy policy generally was discussed within the framework of the union’s environmental policies. It is not by chance that the main EU energy policy statements produced in recent years are called ‘‘Green Papers.’’ Energy policy is the EU sphere where member governments have remained most national in their outlook, defying the trend toward growing integration (for example, many member states still retain national energy companies). European Union energy policy is coordinated by the European commissioner for energy, whose position is subordinate to the European Commission’s Directorate General for Energy and Transport. In addition to the various EU institutions, most of the member states also cooperate within the framework of the International Energy Agency. Moreover, in recent years NATO has taken up the issues of energy security , environmental challenges, and security of energy infrastructure, giving European states an additional opportunity for policy cooperation. Despite the lack of coordination on energy policy, the energy supply disputes between Russia and the former Soviet republics of Ukraine, Georgia, and Belarus in the winters of 2006 and 2007 produced a serious debate within the EU over member states’ increasing dependency on Europe 129 natural gas supplies from Russia that also saw questioning of Moscow’s reliability as a supplier (see Chapter 7 for further analysis). In addition, growing concerns about global climate change have raised calls for a common European energy policy. Still, EU member states have declined to adopt common policies. When EU president Jose Manuel Barroso in 2007 unveiled Europe’s plans for reducing climate change and introducing more competition into the energy sector, he said that each member state should decide its own energy policy.1 One of the reasons the EU has refrained from adopting a united and comprehensive energy policy is that in most states in continental Europe, energy policy is traditionally an element of economic policy.2 In the case of Germany, for instance, the Foreign Office has traditionally not been involved in energy policy decision making.3 In France, however , the head of state takes a major role on energy-related policy. Moreover, in recent years it is the EU that has undertaken the task of splitting up the production, distribution, and supply chain divisions of the energy companies, with the goal of unbundling electricity and gas supplies, which further limits the public sector’s involvement in the energy sphere. This is taking place at the same time that on the supply side, producers are extending their involvement in Europe to distribution and supply, and (especially in Russia) the state has reasserted its command over energy suppliers. Moreover, a private and fragmented market is not capable of dealing with the two major challenges defined by Europe: security of supply and environmental policy. Spring 2007 seems to have been a milestone on the road toward greater cooperation on energy matters in the EU. In March 2007, the European Council adopted an energy program to increase energy saving and promote climate-friendly energy source use. Among the common commitments adopted by the EU member states were: a cut of 20 percent in the EU’s greenhouse gas emissions by 2020, with a willingness to up this goal to 30 percent if the United States, China, and India make parallel pledges; a promise that 20 percent of overall energy use will be supplied by renewable energy sources by 2020; and the establishment of a minimum target of 10 percent for the share of biofuels in overall petrol and diesel consumption by 2020. Europe’s Energy Consumption Patterns The EU posses relatively scant energy reserves: less than 1 percent of the world’s proven oil reserves; 2 percent of the world’s proven natural gas reserves; and 4 percent of the world...