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From Open Europe

EU energy policy: Commission bids for new powers over regulation, environment and member states’ relations with the outside world

The European Commission will today unveil its green paper on energy, which has been widely leaked. The paper proposes that the EU would gain power to set member states reserve requirements, and the FT reports that each country might be required to store up to two months’ worth of imported gas, which they would be required to release, to ensure “solidarity”, in the event of a supply disruption. An earlier proposal for a doubling of oil reserves was previously vetoed by the UK after it emerged that it would cost over £3 billion to implement (March 2003). More recently the Commission proposed a reserve scheme to smooth out oil price spikes.

The paper foresees an EU energy regulator, an EU energy agency, and a European project to build new pipelines to North Africa. The Commission would gain new powers to enforce its environmental policies. The paper says the EU will “lead global efforts to halt climate change and improve local air quality”, and will propose measures to meet thetarget of a 20% cut in energy use.

The paper also suggests that the Commission would negotiate with the outside world, as it does in trade policy. The paper says that “Work should start towards an EU-Russia energy treaty”, and in an article in the IHT Jose Barroso writes that “The European Union needs to speak with a common voice”.

The Commission says that member states would retain sovereignty over which energy sources to use. But it argues that because these choices “have an impact on the energy security of their neighbours and on competitiveness and the environment,” an annual “strategic EU energy review” is needed to give a “clear European framework for national decisions on the energy mix”, and the EU would gain powers to legislate to “help the EU to stem the increasing dependence on imports.” In 2007 the EU would “define a limit for import dependency, and define the measures necessary to achieve this goal.”

Comment: Back in 2002 when the EU Constitution was being drafted, the UK tried to veto giving the Commission any new powers over energy, with Peter Hain saying that there was no need for it because “all aspects of energy policy are effectively covered elsewhere in the treaty.” It is unclear why the UK position has changed. It remains to be seen to what extent the Commission’s proposals will give it new legislative powers, but given its previous proposals on energy, any new powers for the Commission could lead to some very expensive regulation. Nor is it clear that the UK would benefit from the EU negotiating “with a common voice” – given that the UK’s interests are likely to be quite different (e.g. being supplied from Norway and LPG rather than Russia).

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