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Currently, the debate about energy policy seems to assume that there is no
problem with meeting
Europe’s insatiable demand for energy. Instead with
have an ideological based discussion, as to which method of production,
meets the current criteria of a particular interest group, rather on the
level of which fine wine goes best with salmon.
We have the Greens who put there faith in small scale sustainable technology
that includes every home having its own set of solar panels or wind
turbines, but seems to ignore the problem of producing electricity when the
sun does not shine or wind fails to blow.
Then we have the people who would rather preserve the scenic beauty of
Europe’s fine historic landscapes at any costs, rather than have them
destroyed by fields of wind turbines from horizon to horizon or excellent
Trout Rivers dammed for hydroelectricity.
As for the silent majority, we depend on the Europe’s leadership in both the
state and private sector making the right decisions that ensure our future
happiness and comfort depend on there being sufficient, dependable and
secure energy supplies to meet our energy requirements, both at work and in
the home, after all if you are on a respirator in a hospital, you don’t want
to have to pray for the wind to keep blowing so you have enough electricity
to keep you alive.
At the present moment, Europe’s consumers are supplied by a
trans-continental network distributing energy through a network of
pipelines, power lines and transport networks. For London consumers, the
electricity used to boil your kettle, is likely to have been imported from
France, while the gas you use to heat your home is liable to have come from
Siberia as from the North Sea. The same is the case with the petrol you use
to drive to work, will have been imported by tanker from the politically
troubled Middle East.
Currently, the EU’s Directorate-General for Energy and Transport (DGET)
calculates the Europe Union imports some 50% of its energy from outside
sources, for those concerned with Europe’s economic future unless something
is done soon to reduce Europe’s rising dependency on imported energy the
concern is Europe’s energy security could be threatened by war or terrorism
in the Middle East or even industrial action as was the case in Venezuela in
recent years. To add to Europe’s energy concerns are the increasing
competition for oil and gas from not only North America and Japan, but also
from such rapidly developing nations as China. Already such increasing
competition has forced up the price of oil produced in the Caspian Sea
Region reports
Prof.
Coby van der Linde (CIEP).
Unless major changes are made in current policy, DGET estimates that Europe
will be importing as much as 70% of its energy needs from outside Europe by
2030. The problem is Europe has been neglecting its energy industry for the
past decade, instead of planning for Europe’s energy future production
capacity, it has been nit picking over the finer points of modes of
technology in meeting ideological criteria, while failing to question if
such technology will be able to meet Europe’s energy demand requirements. At
the same time as part of the European Unions economic integration, the focus
has been on creating a Single European Energy Market, while failing to
introduce the governmental powers needed to ensure that such a market meets
it both its security and social energy requirements.
DO WE HAVE AN ENERGY POLICY?
So for Europe’s decision makers, what problems have they had to face in
formalizing an energy policy that will provide Europe’s energy solutions for
the next few decades? The trouble is Europe does not really have a Common
Energy Policy in the opinion of Dick Leonard of the Center for European
Studies (Brussels) instead we have what is termed a ‘semi common’ policy. A
patchwork of agreements in principal on most objectives, but a hodgepodge of
division of responsibilities, in part this current situation has in the
opinion of Steven P. McGriffen of the European United Left Group of the
European Parliament (EUL) caused by a consequence of focusing on other
issues than of indifference and the reluctance of some Member States to
surrender such responsibilities to the European Union. This mess means
Europe’s leaders do not have the complete set of tools to tackle Europe’s
energy issues that a fully fledged Common Energy Policy would bring.
Instead, we have a set of narrowly defined
policies mainly tackling nuclear energy and coal, outside these two sectors,
EU policy has been limited to a series of broad and well established
horizontal policy goals, such as promoting the rational use of energy and
reducing Europe's oil import dependency. In fact it has been the impact of
the EU’s Economic Policies through the creation of a European Single Market
that has been the greatest step forward in creating a fully fledged European
Energy Policy, since having a integrated Single European Energy Market is
vital for the very success of the Single European Market.
So apart from our policy makers not having a full set of policy tools, what
are the challengers that have to be faced by our leaders in meeting their
goals of ensuring the Continent’s consumers have access to clean, reliable
and competitively priced energy sources?
At present the European Union is the world’s largest energy importer and
second largest energy consumer after the United States. In 2000 the EU
accounted for 15% of the world’s total consumption, importing 50% of its
energy from overseas. This hunger for energy imports is likely to increase
by 19% by 2030. The trouble is in terms of primary energy production; many
Member States have been facing a shortfall in production, only Britain and
Denmark have been net exporters of energy in 2003.
WHAT IS THE CURRENT STATE OF THE ENERGY SUPPLY MARKET?
The current mix of
the European Energy Market depends on 80% of
its energy from fossil fuels – oil, natural gas and coal. A significant and
increasing proportion of this comes from outside the EU.
Currently, the Commission estimates that by 2020, 70% of
the EU's primary energy needs, including 90% of its oil requirements, will
be met by imports from Russia, Gulf Region and North Africa. Of domestic
production, perhaps another 25 years before North Sea Oil commercial oil
reserves will be exhausted at current rates. Though world oil prices have
risen 75% in the last 2 years reports Britain’s CBI.
Natural gas at 23%, is the fastest growing component in
the fuel mix, spurred on by its environmental properties and by increased
availability over the past decade, though prices have begun to catch up with
oil. Here, however, we can at least count on the production of Norway, a
member of the European Economic Area. Its reserves represent 23 years of
consumption at current levels.
Coal consumption has continued to lose market share,
despite world prices being low and stable, its past poor environmental
reputation, high cost of indigenous production and lower energy efficiency
has reduced its share to
18%. Practically only in the United Kingdom could coal production become
competitive again. Lignite and peat are profitable, but do not make any
significant contribution to EU energy production.
Like Coal, Nuclear has had a poor reputation amongst the
public. Currently nuclear energy at 12%, continues to play a major part in
European energy, the industry’s long-term future appears increasingly
brighter. Plans to progressively abandon nuclear appear to being dropped in
many member states. Finland has ordered its first new nuclear power station
in years, Germany is now seeking to extend the operational lives of its
stations and Continental public opinion, is increasingly turning more
towards Europe restarting its nuclear program.
As for renewable energies the EU already has a target of
generating 21% of electricity from by 2010, though it is unlikely to meet it
with current technologies barely contributing 6%.
Lastly, the unforeseen consequences that the creation of a
truly integrated Single European Energy Market is having on investment
decisions, in ensuring security and adequate access to energy while meeting
both economic, environmental and social objectives. Already, we have seen
that the cheapness of imported primary energy supplies has increased the
Continent’s dependency on imported primary energy sources. This has resulted
in increasing concerns from Europe’s industries over the EU’s ability to
overcome disruption in supplies caused by war or terrorism.
WHO ARE THE MAIN CONSUMERS OF ENERGY?
Transport is its greatest consumer, followed by industry
and households. One positive sign, however, is that the growth in demand for
oil has been less than 1 % a year in recent years. The restructuring of the
economies of the Union's Member States in the Nineties, improvements in
energy efficiency, and the emergence of new sources of energy have made it
possible to offset the growth in those economic activities that are major
oil consumers.
SO WHAT IS TO BE DONE?
So, the EU is vulnerable to supply cuts or higher prices
resulting from international crises. It also needs to burn less fossil fuel
in order to reverse global warming. The way forward requires us to save
energy, use it better, develop alternative sources – particularly within the
EU, and seek more international cooperation.
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