EU Energy Crisis the European Union Energy

EU Energy Crisis

The European Union Energy Policy

Energy dependence appears to be the looming concern for the European Union. Last year alone the import figures required to meet their energy needs were at 54% and this number is expected to rise marked to perhaps as much as70% by 2030. The unfortunate cause of this dilemma is that as a whole the EU possesses a minuscule amount of worldwide oil reserves - only 0.5%; while their natural gas reserves are equally inconsequential at a mere 2.4%

Limited access to natural energy resources automatically results in increased dependence on global markets. Various other data support this premise.

Research from the European Commission Energy

confirms that 42% of natural gas and 29.55% of oil hail from Russia; which means it is the lone largest supplier of energy resources to the European Union; which makes EU policy makers uneasy at the prospect of reliance on this singular source. Their concern is not unfounded either. In 2006, a dispute between the Ukraine, formerly territory of the U.S.S.R., and Russia underscored the risk of relying on a limited number of energy suppliers and placed Russia's fidelity

. Moreover, there is ample evidence that oil resources in the North Sea; the second largest EU supplier; peaked in 1999 and are currently being depleted at an alarming rate due to climate change among other concerns

. However, North Sea natural gas production has been on the increase which is one of the few bright spots in an otherwise dismal energy outlook for the European Union.

Certainly the European Union is not alone in their energy challenges; but part of their problem undoubtedly lies with their consumption figures. While the United States uses 19% of the world's energy and China 20.3% the EU places third at 14.4%

- quite an excessive number considering their inability to provide for themselves. Their main fuel source is oil (36.4%) but natural gas consumption is burgeoning and the European Union's use accounted for a quarter of the total world consumption in 2010.

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Contemporary energy security

Under the circumstances the European Union's approach to energy security is a labyrinthine series of political, environmental, economic and security compromises made largely in reaction to events that transpire on the geopolitical global stage. The conditions and trends of energy security seem to be ever-changing; and realistic parameters must take into account such things as energy and economic development, general energy tendencies, those aspects of energy related to the environment, and even the real and ever-present threat of the impact of terrorism to the energy supply. Thanks to the oil embargo of 1973 every country must factor in how they would manage in the face of possible oil supply disruptions from the oil importing countries

AT that time energy security had only been challenged by political conflict. But this overemphasis on the impact of international politics to the import of domestic energy supplies - which perhaps thorough in their analysis of such to increasing oil prices was shortsighted indeed.

Indeed, OPEC had the rest of the world in a 'headlock' but lately the issue of energy security has been revisited to include consideration of the protection of the energy supply chain and infrastructure in its entirety

. Geopolitical factors are always in flux and cannot be ignored but are only one component of energy supplies in general.

Research and development

For academic purposes the concept of energy security will be defined as the condition by which one or more countries and their corresponding citizens and enterprises are able to access a sufficient amount of energy resources at reasonable prices into the foreseeable future without risk of major disruption

. This definition can be further divided into four divisions security of supply and - separately - demand, security of energy installations and personnel, and the reliability of the supply. Let us consider each of these separately.

Security of supply refers to the quest on behalf of all nations to perennially hold adequate levels of energy supplies to meet the needs of their citizens. A multitude of scenarios can threaten this security including (but not limited to) a deliberate reduction in production on the part of the energy producing countries that would result in price increases and reduction in available supplies

. Equally as troubling would be the use of energy resources by those countries that hold them in matters of foreign policy. One need not look far for an example of this. Today Russia can be seen to be using its resource of natural gas (and the company Gazprom) to disrupt energy exports for geopolitical reasons. Although this is not the first time this has happened - it is foreboding to see it occur and the consequences are quick to realize by all members of the international audience. It is never out of the realm of possibility that a group of energy producing nations could collaborate to deny consumer countries this resource.

When there is concern for the reliability of the energy supply - in that an uncertainty taints the surety of its availability - this impacts the cost. Examples naturally include terrorism but also encompass less recognized problems as energy monopolies, civil wars, impassible transit routes and more. Just last year Iran threatened a blockade of a strategic waterway that would have caused a major disruption of access to oil - and the menace alone caused oil prices to spike. When referring to installation and personnel security it is obvious how this relates to energy supply security as well. Imagining attacks on the infrastructure that carries these energy supplies and/or personnel that oversee it; it does not take a leap of understanding to see how this would impact access to a continuous flow of energy supplies.

It is these four factors that shape global energy policies. Each category became a realistic concern born of the embargo of 1973 and has evolved from there thanks to the breadth of possible disruptive variables that cannot be dismissed outright. However, the results are not all negative as promising alterations to energy policies have followed including greater fuel efficiencies across the spectrum of uses

. Too, countries have banned together to create common energy policies to address security issues - though this has had a limited benefit to the European Union vs. other regions.

Energy security in the European Union

Dating back to the year 1973 (for which the oil embargo was noted but was not the only challenge to energy at that time) there was an Arab-Israeli war known in the region as the Yom Kippur War. The war impacted the energy supply chain to European countries at that time and was called the First Oil Shock. For the first time in several decades the international audience was questioning the security of the energy supply chain - it literally moved front and center to the policy agenda concerns of many nations including but not limited to Europe

. It precipitated a conversation and flurry of activity that later resulted in an energy security policy that incorporated several objectives designed to prevent a repeat of the event of 1973. This includes diversification of energy sources and - where possible - providers; with the acknowledgement that as a unit they lack indigenous hydrocarbon resources and the rising demand is ongoing (ceaseless really). But as has been noted elsewhere - and certainly bears reiteration - the European Union is facing a decrease in North Sea production (due in part to the depletion of natural resources) and their dismal reliance on Russia for the bulk of its resources - a country with which there have been innumerable fall-outs over the centuries and with whom policy makers in the European Union remain uncomfortable with in the matter of their undisrupted energy security. The Ukraine-Russia dispute of 2006 did nothing to allay the fears of the European Union with regard to their own relations with Russia. It actually only reinforced their recognition that a cohesive and collaborative energy security policy was essential. Even so there has been little authentic progress made in finalizing any form of a unanimous energy policy due to the tendency of each member nation to consider its own needs first instead of looking at it from a holistic view. Often meetings turn into sessions of bickering with each country embracing their own energy issues first - and with each member country holding different preferences they may be their own worst enemy. At the same time - there may not have been a more pressing need to create a cohesive energy policy than now with the multiplicity of potential problems they could face without one. A single and unified energy policy could also prove helpful when the European Union deals with international problems with other energy partners

In 2006 the European Union's first foray into the collaborative efforts to create a unified policy came in the form of a Green Paper which was actually a set of proposals the underscored the evident need for the EU to develop a coherent energy policy

. The paper conservatively proposed what many believed was actually an exceptional step in the right direction by stating that they craft a network of energy correspondents to facilitate coordination among the states that are members of the European Union. This would allow them to integrate and broaden their energy objectives and relations while creating a coordinated mechanism for response in the case of an energy crisis to supply, demand, reliability or facilities. Too, they are urged to develop an energy system that does not wholly rely on a single supplier (for all practical purposes). The first step towards realizing these goals is to forge a common energy policy - a concept that bears repeating time and again as it is the foundation for moving forward for the EU

Half measures that only result in partial cooperation are ineffective at best and not much more than a waste of time. In fact, they could be considered counterproductive as they offer a false sense of assurance. Commission president, Barroso, chided member nations to drop their personal and petty animosities in favor of authentic progress

. A year after the Green Paper was published a follow up report entitled 'Energy Action Plan for 2007-2009' was published. This paper emphasized the critical need for enhancing all security measures regarding the internal gas and electric markets as well as offering an approach for the development of a common energy policy

. The emphasis was on three distinct areas that included climate protection and aspects of the energy supply. They called for an increase in energy efficiency by 20% across the whole of the European Union; a decrease in emission by 20% in the year 2020 (a Kyota protocol); and an increase in the use of renewable energies by 20% in the same year. The progress was actually nothing short of extraordinary

The period following these proclamations might be termed as the 'post-Action Plan era'. There was a focus on climate change with member states acknowledging their own shortcomings in this regard. For instance, only 2.9% of the energy used by the United Kingdom currently is renewable -a figure they expect to increase markedly by 2020 to 15% (still abysmal under the circumstances but an improvement nevertheless). But the practicality of changing energy sources is at play here. Still another point of contention is reaching an agreement on the use of nuclear power within the mix of energy sources. Agreement to this runs the gamut of adamantly opposed to wholeheartedly supportive. Even coal as a source of energy was incorporated into the energy mix

Unfortunately, the European Union was once again stymied when at their next meeting the topic of energy security was dismissed as they turned to a discussion on climate change. It is a conundrum to discern how they operate - at once contentious about energy security while collaborating on climate change. The subject bears further consideration.

Recommendation

The suggested way forward for the European Union

An analysis of the factors that affect the European Union's energy scenario reveals several things of note. First, the likely greatest challenge they face to full integration of the market are changes to both the infrastructure and tenuous connections among the member states that prevent the creation of a unified policy. A second aim of equal importance is both the diversification of energy supplies and suppliers, as well as a full embrace of renewable resources, and, lastly, an assessment of the security of their energy infrastructure. In this way they will place themselves in the position of being looked upon as 'global players' able to compete in a global economy of affordable energy. It almost does not require noting that one of the EU's driving objectives should be to embrace environmental sustainability through renewable energy resources. This will aid in securing their energy sources as well.

The ultimate goal is for the European Union to achieve overall energy efficiency by investing in new energy technologies, reforming their current system to increase efficiency, creating a smart network and aggressively pursuing renewable energy sources. This will ensure they are competitive and they have the ability to support the needs of their customer base. At the same time he EU must keep greenhouse-gas reduction as a priority which may be a battle they pursue along due to the fact that it appears the Kyoto protocol is in danger of being 'dismissed'. However, there are other organizations and initiatives in place that may usurp the good works that Kyoto was expected to perform.