Speech KVGN
Speech by Ms M.J.A. van der Hoeven, Minister of Economic Affairs of the Netherlands on the subject of energy policy in a European framework, at the Annual Meeting of the KVGN.
Ladies and gentlemen,
It is a pleasure to speak to you today on the subject of energy policy in a European framework. How to maintain and strengthen a strong European outlook on energy affairs is very much at the forefront of our thinking at the moment. Today we will be discussing European perspectives on demand, supply and sustainability. Events as in the Ukraine, Belarus and Georgia have made clear that it is vital for Europe to speak with one voice. In the face of common threats, common dilemmas and common challenges, it is vitally important that a common commitment underlies all our actions.
At the moment, it is proving an Herculean task to maintain some kind of balance, globally speaking, between demand and supply. Oil and gas prices tell a story of their own. Evidently, we are dealing with a market that is still highly volatile. Market fundamentals have not altered since prices started to increase rapidly. And I think we can safely predict that the energy market will remain volatile for some time to come.
In the Netherlands, as in other European Member States, the main policy response towards market volatility and insecurity has been to diversify, in two ways. Firstly, by creating an energy mix, adding renewables to the palate of fossil fuels already in use. And secondly, by spreading risks through an increase in the number of energy suppliers that we are dealing with.
The route towards further diversification is a joint European one, but also involves bilateral negotiations. Do the latter stand in the way of a firm European stance in energy affairs? Should we even speak of an inherent tension in European thinking on energy policy, in which the pursuit of national interests seems wholly at odds with EU-solidarity?
Ladies and gentlemen, I do not think so.
Much has been said about European countries being caught up in a struggle for energy resources, leaving them vulnerable - allegedly - to political manipulation and internal division. I would like to take another perspective today and point towards the merits of combining a strong EU energy policy and bilateralism.
Common challenges require common action. We need Europe, it's a simple as that. Yet, I also believe that EU-energy policy must leave room for individual Member States to manoeuvre and pursue their own goals and interests. Business should roam free, that should be our point of departure. Business contracts give shape to our energy future, more than any policy decision will ever be able to. After all, ministers do not buy oil or gas! I think we can all agree on the fact that bilateralism, in some form or shape, is indispensable to any energy policy.
It is tempting to conclude that bilateral contacts serve the purpose of two countries only. That's just too easy. Instead, I would like to contend that EU energy policy and bilateral action by Member States must be judged to be complementary. Bilateral relations benefit other countries too. For this to be the case, however, EU energy policy needs to meet certain conditions or include a number of elements, rather. These I would like to outline today.
- First of all, frameworks.
The EU is to provide Member State countries with challenging and workable frameworks for developing national policy.These will include policy frameworks of a regulatory and operational kind, but also relate to the external dimension of energy policy, i.e. the relation of the Union with third countries. It is highly relevant that the EU enters into dialogue with external parties, seeking to establish new and stronger partnerships. Just think of the WTO, the PCA, the EU-OPEC dialogue and partnership talks with Russia (now suspended). These may contribute substantially in terms of security of supply. In this context, I very much look forward to the Commission's second Strategic Energy Review, which is expected for November. It is to focus on security of supply, relating to natural gas in particular.
The EU policy objectives on sustainability, as set out in March last year, already provide greater coherence among Member States. EU government leaders committed to a 20% improvement in energy efficiency by 2020 and a 20% reduction in greenhouse gas emissions. By 2020 sustainable energy sources will cater for 20% of our overall energy use. The importance of the Emissions Trading Scheme may also serve to illustrate the importance of working together to combat pollution and improve sustainability. CO2 'burden sharing' is absolutely vital.
- Secondly, solidarity.
The EU must promote solidarity among its Member States. As I said earlier, it is important for the EU to speak with one voice. The recent conflict between Russia and Georgia lay bare tensions threatening European solidarity. Ultimately, however, the EU did manage to show its leadership qualities, with due effect.
Solidarity requires mutual trust. If only we could achieve greater openness about how we wish to pursue our own interests within the EU-framework. Perhaps, at times, there will be conflicts of interest, that I cannot rule out, but greater transparency at least will open the way to dialogue.
- Thirdly, the internal market and infrastructure.
The EU should help to establish proper-functioning markets and high-quality infrastructure covering all regions involved. This means plenty of cables and pipelines. As for gas, we also need infrastructure that featuring a sufficient number of interconnectors, facilitating international trading. Also, high profile international projects such as Nabucco deserve our unfailing attention.
Of course, I would also like to point towards the importance of a well-developed knowledge infrastructure and technological innovation here. The IEA has stated in its recent review of the energy policies of the EU that investments need to be increased in order to address the energy and environmental challenges the world is facing at the moment. Our major ambition, after all, concerns the cleaner production and use of energy.
My main point is that bilateral relations will benefit not just the two countries involved. I would like to illustrate this by giving you an example. Speaking on the occasion of the KVGN Annual Meeting, I think it is only appropriate to draw inspiration from the gas market. The Dutch ambition to strengthen its position as a gas roundabout for North-West Europe is a good case in point here.
The gas roundabout concerns a Dutch business venture. It main aim is to raise security of supply in the Netherlands and the rest of Europe. In this way, the roundabout will profit European partners. Furthermore, we need to take into account that a gas roundabout is always in need of gas. Dutch and other European businesses using our infrastructure will enter into trading contracts with businesses abroad. This may require sustaining bilateral relationships, but in the end Europe as a whole will benefit in terms of security of supply. Also, other EU countries can make investments in the Netherlands, thus also profiting financially from the Dutch business initiative.
Ladies and gentlemen,
We are heading for a single market. In a sense, it is already an anachronism to think in national terms. At the same time, I am still - first and foremost - being held accountable by the Dutch Parliament for promoting Dutch national and commercial interests.
Of course, this is only a seeming paradox.
Let me explain by pointing out that it is companies that make energy policy work. It is companies that enter into contracts. In the field of energy too, not governments, but companies produce, transport, process and distribute energy products. We depend on business to come up with creative and profitable solutions. But business depends on us - national governments and the EU - to establish greater market flexibility, provide high-quality infrastructure and sustain stable international relationships.
We will have to resign to the fact that many energy companies, across the board, still operate from a strong national base. That is the reality I face. That is the reality other EU-countries face. But let's keep in mind that there have always been differences of interest among European countries. Let's not worry too much about that.
As long as the EU outlines the frameworks within which we operate, promotes solidarity among Member States and establishes strong markets with high-quality infrastructure, bilateral agreements will only help strengthen our common efforts to safeguard security of supply and help establish a greener Europe.
The EU has a role cut out for itself in the field of energy, demanding full dedication on the part of Member States. But at the same time individual countries also have their own part to play in the great spectacle that is enfolding worldwide: a thorough-going transition to an energy future that is both secure and sustainable for generations to come.
Thank you.