Analysis: A European High Energy Authority?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

In a policy paper of the Schuman Foundation, Joachim Bitterlich (Former adviser of German Chancellor Kohl) gives an overview of current European and international energy concerns, and supports the case for a common EU energy policy.

With oil prices’ reaching records, tensions surrounding Russian gas delivery and heated debates on Endesa/E.On and GDF/Suez mergers, energy issues rank high on European agendas.

J. Bitterlich warns against underestimating the magnitude of the energy challenge. Beyond the inevitable rarefaction of resources, he sees many causes for concern:

  • Geopolitical risks: energy consuming countries become dependent from politically instable regimes, since “North America, Europe and Asia consume 70% of oil, the stocks of which are located for the two thirds in the Middle East;”
  • Steady increase of Europe’s energy dependency rate (70% forecast for 2030 vs. 50% nowadays) and fast increase of non-European energy demand (China, India); 
  • No coordinated response to the challenge, as energy and politics remain intertwined and as EU member states have developed totally different “energy mixes;” 
  • Simultaneous external “crisis” may exacerbate uncertainty on energy provisions (Iran; Russia/Ukraine; Latin America). 

Against this backdrop, and after a brief description of the pros and cons of each energy source, the author first suggests the establishment of a fully-fledged European energy market. Liberalisation by 1st July 2007 is a first step in that direction, he argues, but this should be completed by “unbundling,” a reasonable degree of interconnection, and maybe by integrating some EU neighbours.

Aside market instruments, J. Bitterlich also praises a common EU policy, both internally and vis-à-vis the world. Drawing a parallel with the post-war context and the need to pool coal and steel resources’ management, he recommends the creation of a “European Common Authority,” to act as “a permanent observatory; to ensure good coordination between member states; to provide assistance, control and arbitration.”

He concludes by urging the EU and its member states to “wake up” before oil prices reach $100 per barrel.

To read the full paper (in French only), click here.

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