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SPEECH/06/710












Benita Ferrero-Waldner

European Commissioner for External Relations and European Neighbourhood Policy




Opening Address






















Conference: Towards an EU External Energy Policy to Assure a High Level of Supply Security
Brussels, 20 November 2006

Excellencies, Ladies and Gentlemen,

Let me first thank all of you, also in the name of my colleague energy commissioner Andris Piebalgs, for showing with your presence in this conference such a high interest in energy policy and for the external energy policy which will be at the centre of the discussion this morning.

As highlighted just now by President Barroso, we can no longer take secure and affordable energy supplies for granted.

We are all being exposed to increasingly intense competition for global energy resources from other parts of the world, and are becoming ever more dependent on oil and gas imports from regions facing geopolitical uncertainties.

This has meant that the issue of ensuring energy security has moved to the centre of public policy and international politics, as well as business decisions.

However it is true that traditionally, the EU’s Member States have often regarded energy policy as a domestic, not European issue; in their energy relations with Russia, for example. Some Member States, such as the Baltic States, are fully dependent on Russian gas imports while others are to a much lesser extent. Recent events have done a lot to focus minds.

Between Hampton Court and Lahti Summits, the EU has moved rapidly towards the implementation of a coordinated EU external energy policy based on a single approach and speaking with a single voice. In 2006, the Heads of State and Government have talked repeatedly on this subject. President Barroso has already referred to these discussions including EU approach towards Russia and the creation of a European Network of Energy Correspondents that will be coordinated by the Commission in close cooperation with Member States and the Council secretariat.

Energy and energy security have been at the heart of European integration from the outset and the Commission has been actively involved for quite some time to enhance the EU’s external energy security. Just take as an example the countries of the former USSR. We have already spent several hundred of million Euros on enhancing their energy security since 1991 and actively promoted energy dialogues with our important energy partners for the sake of or common own energy security.

Energy is a perfect example of common sense driving integration. There is now broad support across Europe for the idea of a comprehensive, common energy policy integrating the internal and external dimensions. National leaders and citizens in Europe can all see the benefit of a more integrated, pro-active approach across the EU to the external energy challenges. The Commission is ready to take up this challenge.

Europe's external energy approach

There is a clear need now for the EU to put its external and internal policy instruments at the service of its energy security.

These instruments include our European Neighbourhood Policy, our contractual relations with our main energy partners in central Asia, the Middle East, the Gulf, Africa, South America, USA, China, India and our whole network of bilateral, multilateral and regional agreements, and specific cooperation schemes.

As you know, our European Neighbourhood Policy was developed as a response to the new geopolitical situation following the May 2004 enlargement. This Policy lays the foundations for a much deeper political and socio-economic relationship with our neighbours and aims to increase mutual prosperity, stability and security.

The policy takes full account of the vital role that the EU’s neighbours play in the EU’s energy security either as supplier or transit countries. This has been fleshed out in the major energy cooperation sections of the ENP Action Plans which have been jointly established with these neighbours. The Action Plans address issues such as increased dialogue; convergence of energy policies and legal/regulatory frameworks; working towards better interconnection of networks, energy efficiency, renewable energy sources and nuclear safety. On this basis, energy cooperation has been substantially enhanced with our neighbours over recent years.

The Commission is now looking to strengthening this policy. There will be a clearer focus on energy issues, both at a bilateral and regional level. Co-operation in the Mediterranean, Black Sea and Caspian areas will all be enhanced. We also intend to improve the impact and leverage of EU funding, including through the European Neighbourhood and Partnership Instrument and the creation of a new Neighbourhood Investment Fund. This will permit the EU to facilitate important energy projects especially in infrastructure of common interest more effectively.

The Commission will make specific proposals to this effect next week.

This will also include to work, when and where possible, on the extension of the principles of the Energy Community Treaty that covers currently countries with an enlargement perspective in South East Europe to our neighbourhood countries in Eastern Europe, the Caspian region and the Mediterranean. In a second step also the Gulf region could be included. This will extend transparency, efficiency and certainty beyond the EU’s frontiers – crucial to helping the long term investments necessary for our energy security.

Let me make some remarks regarding some Key neighbouring EU energy partners.

Russia is clearly a key strategic partner for the EU in the energy sector. EU-Russia energy relations are characterized by a great degree of interdependence, and should continue to be, mutually reinforcing. The substantial and reliable flow of revenues that Russia obtains from selling energy to the EU has undoubtedly been one of the key factors in Russia's economic revival. For the EU, the stable flow of reasonably priced energy has been an important factor underlying the EU's economic growth and well-being. It is this "win-win" situation which both sides must work to reinforce.

The existing legal framework for relations with Russia, namely the Partnership and Co-operation Agreement, is set to expire in November next year. Although in fact it can continue if neither side renounces it, there is an understanding with Russia that it would be preferable to have a new agreement. Discussions are currently ongoing within the EU to define exactly what should be included in this new agreement.

It is nonetheless clear that energy will feature prominently in any new agreement and I believe that it is in the interests of both sides to have a robust text on energy, based on the principles of the Energy Charter, in order to enhance stability and predictability in our energy relationship, reinforce mutual confidence and bring mutual benefits in terms of energy security, investments and efficiency. Our common objective should be to create a level playing field, predictability and reciprocity in terms of:

  • upstream and downstream, foreign and domestic investment,
  • market opening and fair and non-discriminatory access to transport networks, including for transit purposes,
  • convergence of energy policies, legislation and regulations,
  • high safety, security and environmental standards,
  • energy efficiency and savings, renewables and in research.

We have reinforced our co-operation with Ukraine with a view towards integrating its energy market with that of the EU, recognising in particular the key role it plays as a transit country for Russian hydrocarbons to the EU. The tool for implementing the energy objectives of the Action Plan is the Memorandum of Understanding on Energy that was signed in December 2005 and it is rewarding that substantial progress has been made in implementing this agreement.

We have already stepped up our energy co-operation with Moldova and we look forward to discussing their national energy strategy.

We have also recently signed a Memorandum of Understanding on energy with Azerbaijan and are committed to bringing Azerbaijan energy resources, in particular natural gas to the EU market, through the Nabucco pipeline and the Turkey- Greece – Italy gas interconnector. In this context, we would appeal to Georgia and particularly to Turkey to do whatever is necessary in practice to guarantee fair and transparent transit conditions.

In early December, we will be receiving the President of Kazakhstan here in Brussels. Among the objectives of this visit will be the signature of a Memorandum of Understanding on developing our bilateral energy cooperation. We are committed to pursuing all efforts to permit Kazakhstan to be a full partner in the EU’s energy sector. In particular, in encouraging their participation alongside the EU, the US and Russia in developing a Trans-Caspian – Black Sea strategic energy transit corridor as well as consolidating the existing gas transmission system from central Asia to the EU through Russia.

Foremost amongst our regional energy initiatives is that which was launched at a Ministerial Summit in Baku in November 2004. This brings together most of the countries of the Caspian basin, central Asia and the Caucasus, as well as Ukraine, Moldova and Belarus. We are working with these countries to develop sub-regional energy markets in Eastern Europe, the Caucasus and in Central Asia with the objective of promoting the convergence of these energy markets towards that of the EU. We should aim in the middle term at a fully fledged EU-Black Sea-Caspian Sea common energy house functioning on the basis of the EU internal energy market.

Our Mediterranean neighbours are also equally important energy partners of the EU. With Algeria, we intend to enhance our mutual co-operation through a bilateral agreement and we look forward to a rapid agreement by the Algerian government on this initiative.

Egypt is a rapidly expanding natural gas producer and has quickly become the sixth largest exporter of liquefied natural gas to Europe. In the framework of the ENP, the Action Plan that hopefully will soon be adopted, will be robust road map for the harmonization of the Egyptian energy market to the EU acquis. Libya is a very significant gas and oil producer, and the EU intends to shortly start to explore the possibilities of cooperation in the energy field.

Syria is emerging as a gas hub in the Mashrek due to its transit potential for supplying Egyptian, Iraqi and other Middle East gas to the EU, as well as its recent discoveries of natural gas. We are already actively supporting the reforms of the Syrian energy market.

In addition to the Action plans with Morocco, Tunisia, Jordan and other Mediterranean partners, the EU is also actively supporting the progressive integration of the Maghreb (Algeria, Morocco and Tunisia) electricity markets and the Masherk (Egypt, Jordan, Syria, Lebanon, Israel, Palestine) gas market into the EU energy market . As for the East, our long term target would be to create a Euro Mediterranean Energy Common house.

An EU-GCC cooperation has been developed since 1989, We have agreed with our Gulf partners to enter into a joint Memorandum of Understanding to foster this energy cooperation. The participation today of a high-level Saudi delegation and of representatives of other Gulf countries (such as Qatar) testifies our mutual and common interest.

Iraq will be an important potential gas supplier to the EU. This afternoon, I will have the honor of launching the negotiations for entering into the first-ever contractual agreement between the EU and Iraq. This should pave the way for providing a framework to launch energy cooperation.

Regarding Iran as you all know the EU has made through HR Javier Solana a comprehensive offer in the framework of the discussions around the Iranian nuclear program. Due to this package the EU would also stand ready to develop its cooperation with Iran and consider it as a long-term source of oil and gas if the political conditions allowed for such positive developments in the future.

We are also actively enhancing our energy relations with other major, rapidly growing, energy consumers such as the US, China and India.

Finally we should think of having in place a well coordinated response by all internal and external policy instruments in case a supply disruption occurs.

Conclusions

As you can see, we have already been very active within the constraints that we have. It is clear that the new energy landscape of the 21st century implies a more globally interdependent world; where we rely on each other for ensuring energy security and stable economic conditions, and for ensuring effective action against climate change.

I really believe that time has come to have a real EU "added value" to what is being done by envisaging an enhanced legal framework for our energy relations both within the EU and with our neighbouring energy partners with the forthcoming negotiations with Russia being a cornerstone. Consideration should be given to establishing a fully fledged European Energy Community based on the EU acquis that would create a real Europe-wide, integrated energy market not just limited to the EU Member States, but also to the ENP and other interested partners, when appropriate and feasible.

We should strongly support and facilitate the creation of such a Community by strengthening physical infrastructure such as pipelines and electricity cables. Strategic energy infrastructure linking Europe with the Mediterranean Sea, African Sub Sahara, the Caspian Basin, Central Asia and Middle East should be the cement of our common energy security.

I thank you for your attention and I am looking forward to the valuable interventions and statements by the SG/HR of the Council, our colleagues in the panel and the audience.


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