TODOROVA R.V. Energy Safety of the European Union

R.V. TODOROVA Post-graduate student at the Chair of political analysis and management, Peoples’ Friendship University of Russia (RUDN University), Moscow, Russia

ENERGY SAFETY OF THE EUROPEAN UNION

The article analyzes the terms "energy safety" and "energy policy" of the European Union. Like all global issues and the issue of energy safety cannot be regarded separately, but only as part of complex, often contradictory relationships between states. Most European countries are heavily dependent on the supply of fuel and energy raw materials. Although all member states of the European Union have transferred some of their sovereignty in some areas to the European institutions, energy policy is an area that remains largely within the competence of their own state institutions.

Key words: energy safety, energy policy, energy, European Union, international relations, state, economy.

The term "energy safety" became especially topical more than 30 years ago as a consequence of the world oil crisis. It was first used by Winston Churchill on the eve of the Second World War, when he made a historic decision to diversify fuel sources for the British fleet, adding oil to coal. Thus, the issue of energy safety has become a matter of national security from the very beginning. Of course, Churchill gave an answer to another question, he stressed that the reliability and security of oil supplies depend on the diversification of sources and suppliers. Ever since the Second World War when Churchill made his decision and up till now the concept of "energy safety" has been constantly changing its content, but it has always contained rules and regulations formulated then .

The problem of energy security should be considered as a part of the complex, often contradictory relationship between states, which has an impact on their positions on the international scenе .

One of the definitions of the "energy safety" is the ability to provide energy in response to consumer demand at a price that keeps the economy growing. The fact that all economic activities require energy resources makes energy security an important element of the energy policy of national governments.

According to another definition, energy security is the ability to maintain continuity of supply at times of excess demand or disruption of energy flows to meet future demand by combining own energy resources, reliable supplies and transit from other countries.

Such traditional areas of threats as constantly growing fuel and energy supply, energy demand and consumption, geopolitical paradigms and market conditions are the basis of many discussions related to the finding of the best option for the national economy, which provides the necessary energy for its normal functioning.

However, since 1970, the paradigm of "energy safety" has completely changed, expanding both the scope of its constituent elements and the list of risks and threats that today are very different from those that have existed for more than 48 years. In this regard, the resolution of such problems today seems more difficult and complex. Consequently, an attempt should be made to formulate a definition of the concept of "energy security." In our opinion, energy security is a set of interrelated factors that influence each other, such as: security and diversification of supplies; security of infrastructure; economic growth; prices of fuel and energy raw materials; access to new sources of raw materials; investment regime; security of income; danger of war and terrorism; energy sector as a geopolitical weapon; environment and social policy.

The above definition is an attempt to reconcile the views of different actors involved in the resolution of this problem.

First, consumers and representatives of the energy economy are concerned about the possibility of cessation of energy supply and sharp change in prices.

Second, countries, major oil producers, are more interested in the safety of profits, which depends on the increase in the "black gold" exploration.

Third, for the oil and gas companies, the development of new fields and ability to build new infrastructure, as well as a reliable investment regime are at the heart of their understanding of "energy security".

Fourth, the developing countries are concerned about their ability to pay for the supply of fuel and energy vital for the growth of their economies. They are concerned about any changes in their balance of payments.

Fifth, electricity producers fear that the grids are poorly connected.

Sixth, policymakers, on their part, are focused on the risks threatening supply and infrastructure security that may be disrupted as a result of terrorism, war or natural disasters. They are also concerned about such parameters of energy security that are expressed by the amount of unused potential energy capacity, strategic reserves and underdeveloped energy infrastructure.

Prices for fuel and energy raw materials, together with the availability of diversified sources of energy are important components of the "energy safety" that have an impact on the lives of the common man. A sudden increase in prices (combined with the lack of a sufficiently reliable alternative) leads, as a rule, to the risk of social cataclysms in any country.

The Treaty establishing the European Economic Community (EEC) of 1958 does not provide for common energy policy regulations. Only after the establishment of the internal market and its concomitant liberalization process, interest in the field of energy policy has gained importance. The EU energy policy ceased being connected to the economic and security policies and through the domestic market has become firmly linked to the policy in the fields of transport, competition and environment. After the ratification of the Amsterdam Treaty of 1999, energy policy was included in the vector of activities of the EU (article 3). After the ratification of the Treaty, the European Parliament became involved in the resolution of the problems of the domestic market legislation through the procedure of joint decision-making .

The discussion of the European domestic energy markets (electricity and natural gas) opened a new stage in the energy policy of the European Union. It is crucial to create a single internal market that would bring some harmony to the different structures of the European energy market and ensure for the customers who consume different types of energy a free choice of energy supplier, at the same time stimulating production of energy, protecting the environment (renewable energy sources, energy – heat connection) and ensuring safety of nuclear centers. This would create new framework conditions for the EU, which increasingly compete with classic energy policy over the last decades between the EU member states and which allow participation in the market, subject to rapid liberalization, located in the center of interest in the field of energy policy.

Since then and to this day, coordination between the EU member states is becoming stronger and stronger, the number of discussions is increasing and all of it is aimed at finding approaches and ways to the resolution of the energy policy problems. The following strategic documents of the European Commission (EC) are examples of such efforts:

– White Paper: An Energy Policy for the European Union (1995) on the future of renewable energy ;

– White Paper on the energy-heat relationship (1997) ;

– Green paper: Towards a European strategy for the security of energy supply (2000) ;

– Green paper: A European Strategy for Sustainable, Competitive and Secure Energy (2006) ;

– Communication from the Commission to the European Parliament and the European Council on the new European neighborhood policy, entitled "Energy Policy Development for the Enlarged European Union, its Neighbors and Partner Countries" ;

– Communication from the European Commission to the Council and the European Parliament entitled "Black Sea cooperation – a new initiative of regional cooperation" (СОМ(2007)0160) ;

– Joint document of the Commission and the Secretary – General/High Representative for the EC entitled An External Policy to Serve Europe’s Energy Interests, presented at the European Council from 15 to 16 June 2006 ;

– Communication from the Commission to the European Council of October 12, 2006 entitled External Energy Relations – from Principles to Action (СОМ(2006)0590) ;

– Communication from the European Commission to the Council and the European Parliament entitled An Energy Policy for Europe (СОМ(2007)0001) ;

– Communication from the European Commission to the Council and the European Parliament entitled Strengthening the European Neighboring Policy (СОМ(2006)0726) ;

– Europe 2020: A European Strategy of Smart, Sustainable and Inclusive Growth ;

– Regular annual reports on the EU energy policy.

The Treaty establishing the Constitution for Europe indicates that energy is a divided sphere between member states. Although all member states of the European Union have transferred some of their sovereignty in some areas to European institutions, energy policy is an area that remains largely within the competence of their own state institutions. Member states themselves and not the EU institutions continue to take decisions on the conclusion of long-term agreements on the purchase of oil or gas, on the development or improvement of energy infrastructure, on the commissioning or refusal of a certain fuel; on the development of alternative fuels and technologies.

However, the European Commission retains some influence on energy policy, which it implements using its powers to apply the principles of free competition in the internal market of the European Union, environmental protection policy and consumer protection policy. Contrary to the established practice of member states to make energy-related decisions without consulting each other or taking into account the impact of their own decisions on other countries, many experts consider such practice as the main obstacle in determining common goals and practices in the energy policy of the European Union.

For example, the development of a common policy proved to be a particularly difficult task in the implementation of the reform of the gas and electricity market and in external (for the EU) relations with countries producing energy resources. These questions have sparked a heated debate in the European Union about whether organizations should be empowered to develop and implement a common European approach to energy policy. The draft Constitution for the EU provides for "shared" competences in the field of energy policy. It means that if the EU's supranational institutions cannot implement this policy on their own, they could have a greater impact on a wider range of issues related to energy decision-making.

Most European countries are heavily dependent on fuel and energy supplies and are acutely aware of all the factors that could increase the price or could slow down or disrupt the delivery schedule. The revival of interest in energy security in Europe is caused by both internal and external factors. The continuous increase in the price of fuel and energy raw materials, the declining energy production within the EU and the fragmented domestic market raise concerns about Europe's ability to meet its energy needs in the future. The rapid pace of economic development of China and India, leading to additional demand for fuel and energy raw materials on a global scale, political instability in many regions where fuel and energy raw materials are extracted and terrorist attacks on energy infrastructure pose a major question to Europe about how the EU should resist these external influences that may prevent it from meeting its energy needs in the future.

To date, 80% of the energy consumed by EU member states consists of oil, natural gas and coal.

The EU provides approximately 50% of its energy needs through the imports. According to forecasts, this figure will reach 70% in 2030.

Energy is supplied to Europe mainly from Russia and the Middle East, where about 70% of the world's oil and natural gas reserves are located.

The Middle East has been shaken by wars, terrorism and fragile political regimes. Oil production in Iraq has still not reached the level it was before the war, there are fears that terrorist groups may blow up oil pipelines and sabotage the operation of energy facilities throughout the region. Iran threatens to stop oil production for Europe if it is forced to abandon its nuclear program. Many experts believe that in recent years, there is a duality in Russia’s behavior, on the one hand, it leads a policy of reliability and on the other – exerts pressure on consumers of Russian natural gas and oil.

The great demand for energy on a global scale has also caused a lot of questions related to the amount of oil and gas today and in the future. According to the International Energy Agency, in the next 30 years it will be necessary to make about 16 trillion dollars of investments to meet the demand for fuel and energy raw materials on a global scale.

All this has forced the EU to start planning its energy future more seriously and to define energy policy as one of its main priorities.

Forecasts indicate that energy demand in the EU will be growing annually by 0.7% over the next 20 years. Oil and gas will remain the dominant sources of energy, while the share of gas in the market will continue to increase. This is mainly due to the shift that took place in the energy sectors of the economies of the countries, when the use of nuclear energy and coal switched to the use of natural gas. It is expected that by 2030 oil will account for 34% of energy consumption, and natural gas will reach 27% .

The growing dependence of the EU on energy supplies, and especially on natural gas supplies from Russia, raises serious questions regarding the long-term supply security; the need to diversify the sources of supply and the need for the EU to develop both a comprehensive common domestic energy policy and an external energy strategy on relations with Russia and other regions from which the EU can be supplied by energy in the future.

In recent years, European institutions have been investing more and more efforts in the development of normative documents related to this problem. The fundamental document that defines the political goals of Europe until 2020 "Europe 2020: a Strategy for Smart, Sustainable and Inclusive Growth" is of primary importance. The text of the document sets out five ways to develop the European economy after the global financial crisis. In the energy sector, the main goal of Europe by 2020 is sustainable growth, which means the formation of an ecological and competitive economy in which raw materials are used effectively. The same document sets out the measures that Europe should take. Basically, they are distributed along three directions. The first direction is the sphere of competitiveness and the need of the EU to maintain leadership in the field of environmental technology and efficient consumption of resources. The second direction is measures against climate change, the need to significantly reduce the greenhouse effect and increase the share of clean and efficient energy. The third direction is related to the need to reduce the share of imported fuel and energy raw materials and increase the share of renewable energy sources to improve energy efficiency.

The above goals and recommended actions are set out in Europe 2020: a Strategy for Smart, Sustainable and Inclusive Growth. The text indicates the main objectives of the CES: security of supply, competitive and sustainable development, as specified in the Treaty on the functioning of the European Union. This document once again recalls the goals adopted by the European Council in 2007 and 2020, the so-called 20/20/20. This is a reduction of greenhouse gas emissions by 20%; an increase in the share of renewable energy sources to 20% and an improvement in energy efficiency by 20% until 2020. To achieve these goals, the EU has identified five priority areas: 1) achieving energy efficiency in Europe; 2) creating an integrated European energy market for the free movement of energy; 3) achieving safe and affordable energy; 4) expanding European leadership in energy technology; and 5) strengthening international partnership in the energy context.

Thus, in view of Europe's energy needs and the improvement of the environment at the global level, the establishment of the CES is a sensible decision that takes appropriate measures to address the different challenges facing the EU. Considering the actions of the CES, based on the analysis of the materials of the fundamental documents, we can conclude that, on the one hand, the objectives of the CES, such as competitiveness, security of supply and sustainable development, exist in a constant balance, in connection with the needs, resources and characteristics of the European energy sector. However, on the other hand, these goals are in a constant conflict with each other, limiting the effectiveness of measures taken in the context of energy and the environment. As an example, we can consider the link between energy efficiency measures and the increase in the share of renewable energy sources. The goal of energy efficiency is to reduce energy consumption. This represents a reduction in energy demand in the energy markets, which can hypothetically be seen as a reduced incentive to invest in new generating capacity, keeping in mind lower demand.

Summing up, we believe that the development of European energy policy will be a long-term challenge. Normative document "Europe 2020: Strategy for Smart, Sustainable and Inclusive Growth" will give an impulse and will become an action plan to the European Council and the European Parliament. It will be used to assess the progress, to identify new challenges and will provide answers to all of the individual aspects of energy policy.

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