Speeches, Interviews

Speech by Federal Minister Martin Bartenstein, European Parliament

Ladies and Gentlemen,

The events of the first week of January in connection with the gas dispute between the Russian Federation and Ukraine have brought home to us that we cannot take security of energy supply for granted.

More than a quarter of gas consumption in the EU is covered by imports from Russia and as much as 80% of those are piped via Ukraine.  Uninterrupted and continuous transport of gas from Russia to the EU through Ukraine is therefore of vital importance to households and industry. Some EU Member States actually experienced supply shortfalls of up to 50% on 1 and 2 January, however. The European Commission and the Austrian Presidency helped to bring these shortfalls to a swift end with a diplomatic initiative. In this connection I should also like to mention the problems between Moldova and Russia and call on both partners to seek a longer-term solution. According to media reports a solution has been found for at least three months.

Now we have to draw the proper lessons from these events.  The following three measures are required to secure Europe's natural gas supplies in the long term:

1. Diversifying sources and transport routes for natural gas: a series of new pipeline projects with a carrying capacity of approx. 140 bn m3 per year are at the planning stage. These projects must be speedily implemented. One promising project is the "Nabucco" pipeline from Austria via Turkey to the Caspian Area. In its final development stage in 2020 this 3 300 km long gas pipeline could carry between 25 and 31 bn m3 of natural gas a year to the EU on a new route.
2. Pushing ahead with the introduction of Liquefied Natural Gas (LNG): the current capacity of existing installations is approx. 60 bn m3 per year. In some countries there are ongoing projects to construct new terminals or extend existing installations. By 2010 capacity can be expected to increase to 160 bn m3 a year.  The EU's aim should be to quintuple LNG imports by 2010. This will make available to the EU other supply regions with which pipeline connections are not feasible.
3. Increased transparency on the hydrocarbon markets to reduce price volatility and secure stable, market-based prices and better information on the amount of natural gas imported.

Substantial investment will be essential. An investment-friendly climate in the energy economy will be of crucial importance if undertakings are to be willing to make these investments in practice.

In the short term we shall have to consider how we can avoid situations of this kind or overcome them without consequences. Better integration of the pipeline network in the EU is certainly one of the possibilities; it would facilitate intra-Community gas exchange and thereby alleviate the unilateral dependence of some Member States on certain supplier and transit States. Increased intra-Community gas exchange means of course that the requisite volumes of gas must be available, so that we must endeavour to support the establishment of liquid wholesale markets. A further instrument in the short term is of course the holding of gas reserves to bridge any two-month supply shortfalls, and here secific national circumstances such as storage in geological cavities or stockpiling at power stations or industrial plants will have to be considered.

The Austrían Presidency will give priority to energy policy and in particular to security of energy supply. Security of supply is one of the three pillars - along with competitiveness and sustainability - of European energy policy, at both national and Community level. Europe must make greater efforts to get to grips with the energy policy challenges: by 2030 we will be consuming 50% more energy worldwide. Europe's dependence on imports of fossil energy sources will significantly increase.

Altogether we shall have to choose an approach involving various strategies in order to guarantee security of energy supply to the European population and industry:

Within the European Community we shall have to step up the diversification of energy supply, through increased use of renewable energy sources, for instance by tripling the use of biomass by 2010. The cost-efficient use of renewables should provide support for European energy supply. The use of coal with clean technologies and in the long term the use of hydrogen will be further options for Europe. In Austria's view, however, the use of nuclear energy is not an option. On the supply side, overall, efforts to establish a common European internal market will need to be taken further and investments in energy supply increased.

On the consumption side, energy efficiency in the Community will need to be improved. There are at present substantial differences between Member States in terms of energy efficiency measured as energy consumption per unit of gross domestic product. In this connection we might together point to the agreement between the European Parliament and the Council on the Directive on energy efficiency and energy services.

The events of New Year's Day have also shown how important the European Union's relations with its partners are. These partnerships must be taken forward consistently, both multilaterally - through the dialogue in the International Energy Forum or under the Energy Treaty with South-East Europe - and bilaterally - under the EU - Russia and EU - OPEC dialogue. Willingness to cooperate is a key element in securing energy supply.

We thus have a wealth of possibilities. It is incumbent upon us to use them effectively and quickly. And as a secure energy future for the EU is in the interests of all Member States, I am convinced that we can succeed.

Thank you for your attention.

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