GEOPOLITICS OF ENERGY

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• GEOPOLITICS OF ENERGY
• AND ENERGY SECURITY
• A EUROPEAN PERSPECTIVE
• Jean-Paul Decaestecker
• Council of the European Union
• Energy Foresight Symposium 2007
• BERGEN, 22-23 March 2007

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• Resolved by pooling their resources to
  preserve and strengthen peace and liberty, and
  calling upon the other peoples of Europe who
  share their ideal to join in their efforts..
• Where do we stand ?
• Which challenges do we face ?
• Energy policy objectives, values and energy
  security principles
• Responses The three circles
• Actors
• Conclusions

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• WHERE DO WE STAND ?
• World energy demand to grow by 50 by 2030,
  mostly from developing countries and for fossil
  fuels (transport for oil, power generation for
  gas)
• Oil and gas will increasingly come from
   unstable  suppliers and be concentrated in a
  small number of countries, a fact compounded by
  the control of networks
• Conventional reserves for oil, gas, coal and
  uranium and access to unconventional ones dispel
  risk of global supply disruption over the medium
  term while oil/gas prices should on average keep
  rising
• The EU is the largest energy importer in absolute
  terms and imports 50 of its energy (USA 30
  Japan 80), growing to 70 in 2030 under BaU
  scenario
• The EU relies on a few suppliers (60 of gas from
  Russia, Norway, Algeria 80 of oil from Russia,
  Norway, Saudi Arabia, Lybia)
• Dependency varies widely among Member States and
  according to energy source (9 MS are more than
  80 dependent, 6 are 30 or less, one is a net
  exporter)
• This diversity and MS sovereignty on fuel-mixes,
  access to primary resources and conduct of
  bilateral energy relationships impact on the
  formulation of an Energy Policy for Europe

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• WHICH CHALLENGES DO WE FACE ?

• INCREASED DEPENDENCE
• ENERGY PRICES
• ENERGY REVENUES (impact on development and
  governance)
• WILL UNCONVENTIONAL RESOURCES DELIVER ?.
• STATE DIRIGISME (politics, low investment and
  inefficiencies)
• TARGETS (critical infrastructures and sea-lanes)
• NUCLEAR RENAISSANCE (non-proliferation and new
  players)
• RISING GHG EMISSIONS (opportunity or compounding
  factor ?)
• GAME PLAYING (counter-projects, externalities,
  diversification race)
• ? increased uncertainty ? diversification
  routes/suppliers/sources

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• ENERGY POLICY OBJECTIVES, VALUES
• AND ENERGY SECURITY PRINCIPLES
• The three objectives of the Energy policy for
  Europe
• Security of supply, Competitiveness,
  Environmental Sustainability
• Climate change driven (post-2012 GHG targets ?
  energy targets priorities with third countries)
• Values (multilateralism vs. unilateralism,
  solidarity, human rights, access through the
  market ..) Rules (due process, sanctity of
  contracts,..)
• Energy Security Principles (IEA, G8, bilateral)
• Legal and regulatory framework for competitive
  markets and investment
• Infrastructure reliable, safe and secure and
  adequate investment
• Diversification ? low carbon, energy efficiency,
  technology deployment
• Supporting measures (stocks, Kyoto mechanisms,
  non-proliferation, ..)

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• RESPONSES THE THREE CIRCLES
• The EU Internal policies (diversification
  decarbonisation)
• a) Internal market (full opening on 1 July 2007)
• b) TransEuropeanNetworks (including LNG
  terminals)
• c) Stocks (oil in connection with the IEA
  mechanism/gas)
• d) diversification of domestic sources (energy
  efficiency, renewables, low carbon)
• e) RD D ? low carbon energy sources systems
  ( transfer partnerships)
• The EU External policies (dialogue C2C, C2T, C2P
  diversification)
• a) near abroad (Western Balkans, Euromed,
  Ukraine, Black Sea Caspian)
• b) beyond the near abroad (Russia, USA, China,
  India, Brazil)
• c) energy and development (Africa governance,
  energy poverty and contribution to energy supply)
• d) which instrument(s) ? One (or more) Energy
  Security Treaty(ies) ?

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• ACTORS
• States vs non-States actors
• a) Companies
• b) people
• To which camp do they belong ?
• a) long term interdependence
• b) joint venture downstream investment
• c) regional contexts

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• CONCLUSIONS
• Glimmers of hope growing recognition of
  principles, growing acknowledgment of investment
  gap, more commitment to energy efficiency
• A EPE based on the three Ds decarbonisation/diver
  sification/dialogue contribute to the energy
  security and climate objectives
• More understanding and trust, more joint projects
  as a means to engage, more consistency and
  solidarity between MS within the EU and Energy
  partners worldwide Interdependence can be
  mutually beneficial as long as consulted moves on
  all sides
• Some may consider this approach as naïve may
  they consider this sentence of J.J.Rousseau The
  strongest is never strong enough to be always the
  master, unless he transforms strength into right,
  and obedience into duty.
• This should be our guidance less raw power
  games, more trust less conflicts and a wider
  application of the law as precondition to long
  term, collective energy security