Lecture
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The Luncheon-Roundtable organised by the European Office of the Konrad-Adenauer-Stiftung on 30th may 2006 featured Mr Hellmuth Weisser, President of UPEI (Union Pétrolière Indépendante) and President of AFM+E (Association of foreign trade for petrolium and energy) who spoke about the future of fossile fuels in the EU and the security of supply.
In the beginning Mr Weisser outlined the background facts: Till 2030 the bulk of energy needs would be covered by fuels such as coal, oil and gas. But while the energy demand will grow from today till 2030 by a factor of 2.5 and the import dependency will be more than 80 % for gas and for oil by 2030, gas and oil were supplied from political unstable areas. Hence, the growing international competition for fuels and the considerable dependence draw the attention to the aspect of the security of supply.
Mr. Weisser pointed out that Europe still has had to deal with several problems concerning the energy supply. According to Mr. Weisser, especially the Ukrainian “mini crisis” should be seen as a wake-up call for this topic.
Furthermore Mr. Weisser stressed the fact that in a liberalized environment freed from old monopoly structures, governments should take the responsibilitiy to set the rules and obligations for the market in times of crises. In this connection, Mr. Weisser criticised the asymmetry of the cost benefit calculation between market participants and the public at large. He highlighted that the EU needed strategic stocks which provide protection against all kinds of interruptions against natural disasters, political blackmail, terrorism, civil unrest etc.. Weisser emphasized that strategic reserves might serve to mitigate fundamental interruptions in the flow of energy. Thus governments could prevent energy shortage in times of crises. In this context, Mr. Weisser pointed out that the dramatic experiences of the oil embargo of 1973 had led to the creation of the framework of the IAE but big players like China and India have not been covered by the IAE system.
Regarding the today’s supply situation within the EU, Weisser avered that at least 12 EU Member states would rely on only one supplier. Another problem would be the EU dependence on only four trunk lines working to nearly full capacity. All in all, Mr. Weisser emphasized that the non-existence of a security system should not longer be accepted.
Therefore Hellmuth Weisser submitted three proposals to prevent a European energy crisis. First of all, he stressed that the EU and the IEA had to revise their policy leaving gas security matters to national decisions. Second, governments should boost alternatives as to countries of origin, transport, dual fuel plans and encourage free LPG markets.
Finally the governemnts are called upon to address the issue of security systems which are international and to create transparency to the avaibility of stocks.