EU urges members to focus on improving energy efficiency

May 02, 2005 02:00 AM

As high world oil prices continue to put a drag on global economic growth, the European Union urged member governments to focus on improving energy efficiency to curb rising demand.
"We only have a small margin for manoeuvre as far as the supply is concerned," said EU energy commissioner, Andris Piebalgs, "As a result, we should strengthen our efforts on the demand side." This strategy will form the cornerstone of a new policy paper on energy that the Commissioner plans to release in the coming months, Piebalgs added.

Piebalgs made the remarks at the biennial meeting of energy ministers representing the 26 members of the International Energy Agency, including the US. The IEA is the Organization for Economic Cooperation and Development's energy watchdog.
Piebalgs remarks underline stark differences between the EU and US over energy policy. The EU is committed to reducing greenhouse gas emissions under the Kyoto protocol on climate change, an international anti-pollution treaty the US has pulled out of. In addition, the EU is keen to promote renewable energies, aside from nuclear.

That contrasts sharply with administration of President George W. Bush, which is focusing on the quest for new supplies to deal with what it describes as an energy crisis rather than on environmental issues. Earlier, the US President unveiled plans to offer government risk insurance for nuclear power plants, expedite federal approvals for new LNG terminals and encourage the construction of oil refineries on mothballed military bases.
Piebalgs is due to holding a separate meeting with US Secretary of Energy Samuel Bodman on the sidelines of the IEA meeting, Piebalgs's spokesman said.

Energy supply security is a priority for Europe. The EU is a major world consumer of oil and is heavily dependent on energy supplies from abroad. Three-quarters of EU's oil and half of its gas needs are met by imports. Piebalgs said energy efficiency was essential to stabilize imports at their current level. If Europe fails to act, it will be importing 90 % of its oil and 70 % of its gas by 2030, according to forecasts by the EU Commission.
In the past, the EU Commission as targeted buildings for tighter regulation because heating and lighting them accounts for around 40 % of all energy consumed. This time around the Commission may focus on reducing energy demand from the transport sector as well.

Producer and consumer countries need to improve transparency in the market so that prices better reflect market fundamentals, Piebalgs said. The countries should provide data on reserves, production capacities, stocks and future investment plans, Piebalgs added.
Closer cooperation among between the EU and major producers such as Russia, Caspian nations, Norway could make an important contribution to the stabilization of the market, he added. The EU also plans to bolster ties with members of the Organization of Oil Exporting Countries, he added.

The Commissioner also touched on supply diversity during his speech, saying that it was reinforcing its cooperation with transit countries like Ukraine, the major route into Europe for natural gas from Siberia and the Caspian.

Source: Dow Jones
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