Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-09-28-Speech-3-231"
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"en.20050928.23.3-231"2
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".
Mr President, thank you for this opportunity to address Parliament today on this important and timely issue.
Ultimately, market mechanisms will ration the remaining supplies of oil and provide an incentive for a shift to alternative sources of energy, but appropriate action can be taken in support of that and to promote energy efficiency.
Energy efficiency is rightly at the top of the European Union energy policy agenda at present. Improving energy efficiency within the European Union is the most cost-effective means of simultaneously reducing energy demand – to promote security of supply and improve the competitiveness of European business – and reducing greenhouse gas emissions. Much has already been achieved by the European Union, it is right to acknowledge that in this sphere, with a range of regulatory and voluntary measures now in place, but it is clear that whilst significant potential for further improvements in energy efficiency remains, there are also barriers to now realising that potential.
That is why Member States have welcomed the high priority that Commissioner Piebalgs has attached to making further progress and the recent publication of the Green Paper on energy efficiency, entitled 'Doing More with Less'. That Green Paper is currently stimulating considerable and – I would suggest – welcome discussion and debate as to how barriers can be overcome in order to deliver significant energy savings by 2020. It is also why the United Kingdom Presidency will strive to secure a second reading agreement between Council and Parliament on the Energy End-Use Efficiency Directive, which will set a framework and targets for energy efficiency savings in the European Union over the coming years.
The European Union has introduced the Biofuels Directive to encourage the development of alternative renewable fuels for transport. Member States have agreed to set indicative targets for biofuels sales in 2005 and for 2010 to help reduce European Union dependence on fossil fuels. Member States across the Union have introduced policies such as reductions in fuel duty and these have stimulated rapidly growing biofuels sales.
Fuel cells and hydrogen offer significant potential in the longer term, with many considering hydrogen fuel cells to be the ultimate replacement for oil and the internal combustion engine. The European Hydrogen and Fuel Cell Technology Platform has carried out sterling and important work in preparing a strategic research agenda and a deployment strategy for fuel cells and hydrogen. This work will, in turn, influence the Commission in determining priorities for funding under the Seventh Framework Programme. The Commission is currently soliciting industry support for a joint technology initiative in this area to allow major hydrogen demonstration projects to be undertaken here within the European Union.
Greater market transparency is also needed. Improved data on global oil demand, supply and stocks is essential for better informed market decisions. To this end, European Union members are contributing data to the Joint Oil Data Initiative, due to be launched in Riyadh later this year. The European Commission is also currently working on the improvement of data, notably for oil stocks for Europe.
Lack of transparency over the world’s oil reserves and plans for their development also undermine stability and cause uncertainty. Greater clarity and consistency is needed in worldwide reporting of reserves.
Increased dialogue and understanding between consumers and producers is, frankly, also important. The European Union now has a formal dialogue with OPEC, enabling an exchange of views on energy issues of common interest. The first meeting in June agreed four themes for enhancing cooperation between the European Union and OPEC. These were: oil market developments, in both the short and medium-to-long terms; energy policies; energy technologies; and energy-related multilateral issues.
Discussions on these themes will be developed through workshops and other meetings, helping to inform future dialogue meetings. In the first instance, a round table on oil market developments will take place on 21 November, concentrating on investment needs along the oil supply chain.
The European Union is also currently engaged in dialogues with Norway, Russia, China and India. The energy dialogue with Russia is a good example of effective cooperation between the European Union and the Russian Federation on an issue of great importance to their overall relationship. The basic idea behind the dialogue is a simple balancing of interests: Russia requires European investment to develop its energy resources, whilst Europe needs secure, long-term access to Russian oil and gas.
The developments we have seen in the oil market over the past few years raise both important issues and, at present, a number of key issues for the European Union.
Whilst given their rapidly growing need for oil and gas supplies to fuel growth, it is crucial for the European Union, in achieving both its energy security and climate change objectives, that we engage in constructive dialogue and practical cooperation with the emerging economies of both China and India.
Finally, I should also say something today about the response to the impact of Hurricane Katrina on the oil market, and the part played in this by the European Union.
The International Energy Agency called on its member states to release 2 million barrels of oil a day over 30 days. Although it is many years since the International Energy Agency’s response measures have been tested, the organisation was able very quickly to reach a view that the disruption to the world markets was large enough to justify releasing stocks, and to reach agreement with its member states that stocks should be released.
The IEA proceeds by unanimity. This agreement was a remarkable achievement and a tribute to all those concerned. It demonstrates the merits of the IEA’s multilateral approach and the need for such an approach when dealing with the global oil market of today.
Not all European Union Member States are members of the IEA. However, the EU Oil Supply Group met to allow all Member States to review their intended response and give those who are not members of the IEA an opportunity to contribute to that broader discussion.
The IEA Governing Board, at its meeting on 15 September, reviewed the contributions of its member states to the release of stocks. It also decided that no further action was immediately necessary and that the position could be reviewed again at the end of this month or in early October to see if any further action is needed.
The release of stocks has improved the supply situation and had a calming effect on the market and on prices. It was clearly the right thing to do, and done to the right timetable. EU Member States, as well as taking part in the release of stocks, were able to increase gasoline exports to the United States, while ensuring that European Union markets remained supplied without any domestic shortages.
Given the current climate, this debate is extremely timely. The European Union is already making an important contribution to improving conditions in the oil market, both in the short and medium-to-long terms, but there is a range of challenges ahead. I would now take the opportunity to invite others to contribute their thoughts to that future work.
Sustained high oil prices represent a significant risk to global economic growth and are a particularly damaging aspect for poorer countries. Access to reliable and affordable supplies of oil is vital for the European Union and the wider global economy. In 2003, oil products comprised 43% of total energy consumption in the European Union.
The importance of this issue was highlighted by the recent informal Ecofin meeting in Manchester, in the United Kingdom, which, when discussing the current economic situation, focused in particular on the impact of oil prices.
However, as has been well documented elsewhere, the current situation is different from previous periods of high oil prices. In real terms, current price levels are lower than the peaks seen in the late 1970s and early 1980s, and the pace of the rise in prices has been slower. This reflects the fact that very strong, and unexpected, global oil demand growth, rather than supply shock, has been the driving force behind higher prices. Because of this increased demand, global production and refining capacity has become very tight.
So what can be done to help improve present market conditions? Oil is a global issue and can only be solved by global action. Both oil producing and oil consuming nations have shared interests and responsibilities in delivering more stable oil prices that enable sustainable economic growth.
Consumer and producer countries and international organisations need to work together to help make international oil markets function more effectively, both on the demand and on the supply side. Open, transparent and competitive oil prices and oil markets are the most effective mechanism for delivering reliable oil supplies at those more stable prices.
The reserves are there to meet future demand. The world is not yet running out of oil or gas any time soon. However, action is needed to ensure that reserves are turned into actual supplies. Greater investment is needed in both production and refining capability. A climate more conducive to investment, with open markets, transparent business practices and stable regulatory frameworks, is required throughout the international oil sector.
Energy conservation and efficiency, and technology and innovation are also important and have a role to play. At Gleneagles, G8 Heads of Government published a plan of action on these issues in addressing climate change, but progress in these areas can also do much to enhance energy security."@en1
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