Several EU leaders attending a summit in Brussels announced yesterday (22 May) they would prioritise ‘silver bullet’ solutions – such as the development of shale gas – to reduce energy prices. The European Commission, meanwhile, said simultaneous action was needed "on several fronts."
EU leaders held a two-hour and a half discussion on energy with the objective of lowering prices and boosting the Union’s industrial competitiveness.
The summit conclusions suggest that no major decisions were taken, indicating that "the supply of affordable and sustainable energy to our economies is crucial" in the current economic context.
Guidelines were adopted in four areas, including on the completion of the internal energy market, launched more than 10 years ago amid much resistance from wary member states.
The European Commission will report on the implementation of the energy market, which should be completed by the end of the year. Member states also committed to inform one another of major decisions, such as the planned construction of a nuclear plant.
Financing to come ‘from the market’
EU leaders said the financing of energy projects should come “primarily from the market”. The needs for investments in modern energy infrastructure are estimated at €1 trillion by 2020, a figure that also includes research and development.
To decrease the dependence on imported energy, the development of indigenous sources is foreseen, while building on the experience of Denmark and Germany, which have heavily invested in renewable technologies.
Russia was not mentioned in the conclusions despite being the EU’s major supplier of imported gas. But the text says that the Council will review developments, “including the need to ensure a level playing field vis-à-vis third country energy producers”.
Russia’s Gazprom charges Germany a rate for gas that is much lower than what the former Soviet Union’s Baltic republics pay.
Despite this, German Chancellor Angela Merkel said after the summit that the EU needed “transparent prices for energy in all member states”.
She also said that the link and connection among many member states needed to be strengthened, with some regions having to make progress faster, particularly the Scandinavian countries together with Poland and the Baltic states.
Merkel also said that EU leaders had discussed the need to “stop subsidising” the carbon market. The summit conclusions say a well-functioning carbon market and predictable climate policy is seen as key, and the Commission is tasked to come up with “more concrete proposals”.
No ‘game changer’?
The conclusions also say that the Commission intends to assess “a more systematic recourse to on-shore and off-shore indigenous resources”, with a view to their cost-effective exploitation. Several EU countries have plans to develop offshore gas or unconventional gas on-shore.
Speaking after the summit, European Council President Herman Van Rompuy said that EU leaders knew that there was no major 'game changer' on the horizon, and therefore the countries needed to keep working on several fronts.
Commission President José Manuel Barroso also said that there was “no silver bullet to solve the strategic energy challenges that Europe faces”.
However, Van Rompuy acknowledged that some countries could also develop safe and sustainable ways to tap other resources – conventional and unconventional.
“Yes, this includes shale gas, which could become part of the energy mix for some member states, perhaps less for others. It's of course up to each country to decide its own energy mix,” Van Rompuy said.
Shale gas promoters
The British, Polish and Romanian prime ministers made statements promoting shale gas, referring to the energy revolution currently taking place in North American and similar developments in China.
British Prime Minister David Cameron said Europe could not afford to be left behind as the world scrambles to develop the resource. He said that Europe had 75% of the American shale gas potential.
Romanian Prime Minister Victor Ponta said that “clearly an option exists to allow EU members to adapt their legislation to encourage [shale gas] exploration and exploitation”.
According to reports, Lithuanian President Dalia Grybauskait? also made the case for developing shale gas to decrease her country’s dependence from expensive Russian gas imports.
In contrast, French President François Hollande said his country would not change its ban on developing shale gas. France and Bulgaria are the only EU countries which have adopted legislation effectively preventing the industry from developing shale gas.
Pleading for Nabucco
Bulgarian President Rossen Plevneliev told reporters that his country’s position with regard to shale gas remained unchanged. He said that in his speech he had focused on the Nabucco West natural gas pipeline as a priority not only for his country, but for 16 EU members.
He called Nabucco West a “geopolitical project”, unlike its rival TAP which he described as a “transit project” bringing gas from Azerbaijan mainly to Italy.
Plevneliev said that his country had made very strong lobbying in favour of Nabucco West in the last months. Asked by EURACTIV what would happen if the rival TAP project was selected, he conceded that his country could get gas from TAP from an interconnector with Greece, yet to be built.
Romania’s Ponta also said that in his statement, he had highlighted “the importance of Nabucco project”.
The Nabucco West and Trans Adriatic Pipeline (TAP) projects offer different routes to Europe from the Shah Deniz II field in the Caspian Sea.
Both projects are in an advanced stage of preparation. The Shah Deniz consortium is expected to announce publicly which project it choses in June.