Tuesday

19th Mar 2024

Europeanisation of Russia needed for EU energy security, Piebalgs says

The best way to create EU energy security is to export market economy values to suppliers such as Russia and the Middle East, energy commissioner Andris Piebalgs told EUobserver in an interview on Tuesday (28 March), prioritising foreign policy over single market goals in the EU's new Energy Policy for Europe (EPE).

"A market economy is not imaginable without democracy, without human rights and without freedom of expression, these things go together, you can't separate them," the energy commissioner stated.

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The adoption of a European-type market economy in Russia and beyond would help create stable energy markets and extra wealth for suppliers while spreading energy benefits from billionaires to ordinary citizens, he explained.

The opposite scenario of deepening economic and political divisions would carry the negative logical conclusion of mandating an EU-level energy negotiator to fly to Moscow to leverage prices and volumes.

"It is globalised. We can't anymore try to protect our market, or the US market. This evolution is necessary. If it doesn't happen, we will live in a much more dangerous world," Mr Piebalgs argued.

Russian president Vladimir Putin was more open to European energy ideas when Mr Piebalgs met him during the G8 energy ministers' gathering in Moscow on March 16.

"I think the first window of opportunity is definitely the G8 summit [in St Petersburg in July]," he said. "I know how much this summit means to Mr Putin."

The stress on foreign policy issues differs from the approach of many old member states, which want the bloc’s energy policy to begin by building a single European energy market by mid-2007.

"We had the same debate in the European Commission and I was the one who wanted foreign policy first, not the other way around," the Latvian commissioner indicated.

Aside from G8, the EU is currently working on a new "strategic partnership treaty" with Russia to be signed in 2007 describing the pair's post-Cold War legal relations on energy and security.

The EU is also keen to gain access to Caspian Sea basin oil and gas via new pipelines through post-Soviet South Caucasus and through use of existing Russian pipelines under the Energy Charter Treaty.

Caspian region suppliers, such as Iran and Turkmenistan, rank among the world's worst in human rights terms, with Russia's democratic credentials also open to question.

Nuclear taboo must be broken

Renewable energy and an efficient single market, the other two pillars of the European Energy Policy (EPE), are also crucial for addressing shrinking world oil supplies and climate change, Mr Piebalgs said, predicting that after 2045 oil will be too valuable to "burn" except in specialist sectors such as jet fuel or petrochemicals.

The commissioner is concerned that in some EU states just 8 percent of people support low-CO2 nuclear energy despite the UK, France, Finland, the Czech republic, Slovakia, the Baltic states, Bulgaria and Romania planning to boost nuclear capacity.

Brussels should help teach the public about the benefits of modern nuclear reactors, he said, while respecting the EPE's iron rule that each member state has the final say on whether or not to build a new plant.

"Finland has paved the way on how to treat this issue. It's an example for all Europe to follow: not to build nuclear reactors, but to make the decision after proper public debate and with proper storage of waste."

Sweden's aim to become oil-free by 2020 while phasing out nuclear power is "really ambitious" Mr Piebalgs remarked, agreeing that it sends out a 'fortress Sweden' message to EU neighbours and oil suppliers such as Russia.

But Sweden is "moving in the right direction" in terms of climate change and energy diversification at an EU-level.

New technology, such as electrical connectors for offshore wind farms, will be another focus for commission efforts, Mr Piebalgs said.

"It is already technically possible," he indicated. "This means that if there is no wind in the Baltic Sea we can switch to the North Sea and so on."

Single market deadline tricky

In the short-term, the EU plans to create a single market for energy by 1 July 2007 despite the recent disputes over French and Spanish energy protectionism.

The European Commission already has the legislation needed in the competition and single market spheres but needs to implement it, Mr Piebalgs said, adding that the 2007 deadline "will not be plain sailing."

He rejected the comparison of the member states' energy single market agreement to the Stability and Growth Pact - an agreed set of fiscal rules regularly violated by big member states.

The stability pact's fiscal principles are open to debate on whether a country should be able to get away with a 3.1 percent budget deficit instead of the official 3 percent deficit ceiling, Mr Piebalgs said.

But EU market law is "clear" on key issues such as "unbundling" - making sure an energy supplier does not also control energy distribution.

"You should apply unbundling otherwise you will face a court case," he stated.

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The G8 energy summit in St Petersburg will be a "huge disappointment" in terms of Russian movement toward a European-type market economy, Russian president Vladimir Putin's former economic advisor predicted on Friday.

EU supply chain law fails, with 14 states failing to back it

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