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Günther OETTINGER EU Commissioner for Energy Keynote speech Keynote speech given at the EU Russia 10th anniversary high level conference EU-Russia Permanent Partnership Council for Energy Brussels, 22 November 2010

Commission Européenne - SPEECH/10/673   22/11/2010

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SPEECH/10/673

Günther OETTINGER

EU Commissioner for Energy

Keynote speech

Keynote speech given at the EU Russia 10th anniversary high level conference EU-Russia Permanent Partnership Council for Energy

Brussels, 22 November 2010

Dear Mr Shmatko

Dear Minister Magnette,

Dear Minister Fellegi

Excellency,

Ladies and Gentlemen,

It is my pleasure and a great honour to host you today in Brussels, together with Minister Shmatko and Minister Magnette, at this conference on the occasion of the tenth anniversary of the EU-Russia Dialogue. Let us use this half day ahead of us for a fruitful discussion and foreward-looking debate among partners who share common interests to build even stronger EU-Russia energy relations.

The EU-Russia Energy Dialogue was founded 10 years ago, at the EU-Russia Summit in Paris on 30 October 2000. The then leaders of the EU and the Russian Federation recognised that energy relations as one of the key areas of cooperation between the EU and Russia had to be upgraded. They took a necessary and right decision. Over the past 10 years, the Dialogue has become an example for other similar initiatives.

The Dialogue has significantly contributed to the confidence building between the EU and the Russian Federation in the strategically important energy sector. It has been instrumental in solving very concrete problems as during the 2009 gas crisis, in exchanging positions and ideas, in approximating our legislation and standards notably in the field of energy efficiency, and in promoting joint projects, be it in the field of infrastructure or energy efficiency.

This would not have been possible without the involvement of many people working for and in the Dialogue. This anniversary is the right moment to thank for their efforts and their investment into EU-Russia energy relations. First of all the first sole interlocutors, Minister Khristenko for the Russian side and Director-General Lamoureux for the EU side who have laid the foundations of our work. I would like to thank the Co-chairs of the different working groups. Finally, without the efforts of the involved experts from the authorities, EU Member States, international institutions and from the industry the Dialogue would not have produced results.

Changes in the European Energy Policy

Let me tell our Russian partners that this conference takes place at an important moment for European energy policy. The entry into force of the Lisbon Treaty one year ago has given energy with a selfstanding article a solid legal foundation. This was a recognition of the fact that that this area has become increasingly important for the European economy and its citizens. Two weeks ago the Commission adopted a new strategy that outlines the challenges of our policies until 2020. Last week the Commission proposed a Communication on the EU energy infrastructure needs. And in February next year, the Head of State and Government of the EU plan to hold a special meeting dedicated to energy. In many areas we urgently have to take actions at European and national level in order to have reliable, affordable and environmentally sustainable energy supplies. We need to finalise a true European energy market where energy commodities can be shipped under market conditions from Tallinn to Lisbon – a Europe without borders not only for movements of persons or of capital, but also for energy

This new European energy policy will not be complete without an external dimension. Member States have repeatedly called for the EU to speak with a common voice in third countries. In practice, national initiatives do not leverage the strength of the size of the EU market and could better express the EU interest. Building on the legal basis in the Lisbon Treaty, which clarifies and strengthens the external dimension, the EU’s external energy policy must ensure effective solidarity, responsibility and transparency among all Member States, reflecting the EU interest and ensuring the security of the EU’s internal energy market. More effective coordination at EU and Member State level need to be put in place. We will make concrete proposals for such an external energy policy in the course of the next year.

Ladies and Gentlemen,

This anniversary is an occasion to take stock of the achievements of the EU-Russia Energy Dialogue and the lessons learned. We had ups and downs in our relations. The EU and the Russian Federation have in to a large extent compatible interest which we need to jointly pursue, but also different interest which cannot always be brought on a common denominator.

This should however not be seen as an obstacle to a close partnership and cooperation – quite to the contrary.

The Russian Federation is the most important energy partner of the European Union. 31% of total EU’s gas imports, 27% of total EU’s crude oil imports, and 24% of total EU coal imports are supplied from the Russian Federation1. A large part of the uranium used in the EU is imported from the Russian Federation.

On the other side is the EU by far the largest trade partner of Russia. 47% of all Russian imports originate from the EU, and about 75% of the foreign investments in Russia come from European investors. Our infrastructure systems for oil and gas are closely interconnected. This close interdependence will remain also in future. European domestic gas resources are depleting, and we expect therefore an increase of gas imports until 2030 [figures]. There is no alternative to further strengthen our relations and to start thinking about our joint priorities for the next decades.

Let me summarise the main objectives of the EU-Russia energy cooperation:

  • Based on the close energy interdependency between the EU and the Russian Federation we must put our relationship on a stable and sustainable basis. To do that, we should know where we want to go, and what we would like to achieve in our respective markets in the EU and in the Russian Federation. I agreed therefore already with Minister Shmatko that we should develop a common understanding of a roadmap until 2050, based on the long-term strategies and forecasts of Russia and the EU. This should be a helpful tool to co-ordinate our respective energy policy objectives as far as this is possible. This is in the interest of security of supply for the EU and in the interest of demand security for Russia.

    The European Commission just a few days ago adopted a Communication on our energy strategy until 2020. In the longer term, we work towards the ambitious goal of a low-carbon economy until the year 2050.

    It is equally important to know the developments and scenarios for the Russian energy market. What will be the Russian production capacities for oil and gas in the next decades? Will the investment climate be right to attract European investors? The Russian energy strategy until 2030 offers a first insight into the views of the Russian government.

    On the basis of these and further documents we can develop a common "vision" of our energy relationships to the benefit of both sides.

  • A substantial condition for stable and long-term relationships is a solid legal basis. The present relations between the EU and the Russian Federation are based on the Partnership- and Cooperation Agreement of 1994. In particular in the energy sector, this agreement does not meet any more the needs of our current level of energy cooperation. We should therefore include into the New Agreement which is currently negotiated between the Russian Federation and the EU a strong and comprehensive energy chapter which goes beyond the provisions of the current Agreement. A first important step towards a more solid legal basis would be the accession of the Russian Federation to the WTO which I hope will become a reality soon.

  • The EU-Russia Partnership for Modernisation will be a framework to promote concrete energy projects between the EU and the Russian Federation. The Energy Dialogue has prepared its input to this exercise to be discussed at the next EU-Russia Summit. Both the Russian and the EU energy sector face the challenge to modernise. We should focus on energy efficiency and on new innovative technologies to pave the way towards more sustainable economies. Another priority in the Partnership is the improvement of the investment climate and the access to our respective markets. We have to reduce administrative barriers, and we look forward to Russian proposals to modify the existing framework in the Russian Federation. I understand that in the field of energy efficiency requirements and labelling in the Russian Federation we recently have sorted out some obstacles. We will continue to tackle concrete problems in a pragmatic and solution-oriented manner.

  • Security of supply and security of demand issues will remain at the very centre of EU-Russia energy relations. Following the transit crisis in 2009, we have established an Early Warning Mechanism to prevent and better handle future crises. This Mechanism was helpful in June this year. Our objective must however be to avoid future crises. One key element in this respect is the introduction of transparent and market based relations between producers, transit countries and the consumers. We have made progress on this way as the recent negotiations between Poland and the Russian Federation on the Yamal pipeline have proven.

  • For years to come, the transportation of hydrocarbon resources from Russia to the EU against investment and technology from the EU to Russia will remain the basis of our relations. We must however think beyond that to further advance our energy relations. In the long term, our objective will be to bring our markets closer together. If we can approximate our rules of the functioning of our respective energy markets, our relations will become simpler in several aspects. Investment decisions by a Russian company in the EU or an EU company in the Russian upstream sector would then be as normal as investments in other sectors.

This "normalisation of our energy relations" should be a long-term objective to be kept in mind.

Conclusion

Energy is the life blood of our societies. The well-being of our people, industry and economy depends on safe, secure, sustainable and affordable energy. At the same time, energy related emissions account for almost 80% of the EU's total greenhouse gas emissions. The energy challenge is thus one of the greatest tests which Europe has to face. It will take decades to steer our energy systems onto a more secure and sustainable path. In the European Union, the energy challenges facing us are too overwhelming to be resolved by Member States individually. We are stronger acting together. The Europeanization of energy policy has already started.

However, Europe is not alone with these challenges. It cannot realise its energy objectives without close cooperation with the main suppliers. Russia is not only the main energy supplier of the European Union, but also a strategic neighbour. Joining efforts and resources, within a coherent and transparent framework, will help achieve stability and reduce uncertainty. This will be our task for the coming decades of the EU-Russia Energy Dialogue.

I look forward to a lively and fruitful debate today.

Thank you for your attention.

1 :

Eurostat data 2008


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