Friday

6th May 2016

Leaked paper: EU wants 'guaranteed' access to US oil and gas

  • Gas facility in Ohio, US (Photo: Bilfinger SE)

The EU wants the US to lift its restrictions on exporting gas and crude oil as part of ongoing trade talks, according to a leaked European Commission document.

The strategy paper by the EU executive, obtained by the Washington Post, calls for “a legally binding commitment … guaranteeing the free export of crude oil and gas resources”.

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EU and US trade officials will hold their sixth round of talks on an ambitious Transatlantic Trade and Investment Partnership (TTIP) in Brussels next week, which officials argue could be worth €100 billion per year, equivalent to an additional 0.5 percent of EU GDP.

Although a trade deal, which negotiators hope to finalise in 2015, would probably scrap most of the remaining tariff barriers between the two blocs, the real value of an agreement would lie in harmonising regulation and sharing raw materials.

Including a chapter on energy in the deal is a key priority of EU officials. The leaked paper argues that “it should not be difficult to establish a chapter with rules on trade and investment in energy and raw materials.”

At the top of the EU’s demands is for Washington to scrap its requirement to review whether exports are in the public interest before approving any foreign sales, “transforming any mandatory and non-automatic export licensing procedure into a process by which licenses for exports to the EU are granted automatically and expeditiously”.

The EU is anxious to reduce its reliance on Russian gas and oil imports, fears which have been heightened by the ongoing crisis in Ukraine.

It has also long-stated its wish to have easy access to the abundance of US natural gas and crude oil created by the country’s recent shale boom.

A number of EU countries have large deposits of shale gas in their own soil, but most have so far been reluctant to start exploiting it because of environmental concerns about the fracking process which extracts the fossil fuels.

“The current crisis in Ukraine confirms the delicate situation faced by the EU with regard to energy dependence,” the paper notes.

But exporting natural gas could push up prices for ordinary Americans and businesses, who have benefited from a 50 percent fall in energy prices over the past five years, and US negotiators have so far refused to drop their restrictions.

The Commission paper acknowledges the US’s reticence, conceding that “the US has also been hesitant to discuss a solution for US export restrictions on natural gas and crude oil in the TTIP”.

“We have only noticed some limited opening on the US side … a clear agreement to discuss a comprehensive chapter on energy and raw materials is still lacking,” it adds.

Environmental campaigners were swift to denounce the EU plans.

In a statement on Tuesday (8 July), Natacha Cingotti, a spokesperson for Friends of the Earth, accused the bloc of attempting to “trade away regulations that protect us from dangerous climate change”.

For her part, Ilana Solomon, a director of the Sierra Club, a US-based NGO, commented that “the EU wants a free pass to import dirty fossil fuels from the US”.

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