Getting a grip on energy prices (debate)
President
The next item is the debate on:
the oral question to the Council on Getting a grip on energy prices, by Hannes Swoboda, on behalf of the PSE Group - B6-0460/2008)
the oral question to the Commission on Getting a grip on energy prices, by Hannes Swoboda, on behalf of the PSE Group - B6-0461/2008)
the oral question to the Council on Getting a grip on energy prices, by Giles Chichester, Anne Laperrouze, Sophia in 't Veld and Eugenijus Maldeikis, on behalf of the PPE-DE, ALDE and UEN Groups - B6-0463/2008)
the oral question to the Commission on Getting a grip on energy prices, by Giles Chichester, Anne Laperrouze, Sophia in 't Veld and Eugenijus Maldeikis, on behalf of the PPE-DE, ALDE and UEN Groups - B6-0465/2008)
the oral question to the Commission on Getting a grip on energy prices, by Rebecca Harms and Claude Turmes, on behalf of the Verts/ALE Group - B6-0466/2008),
the oral question to the Council on Getting a grip on energy prices, by Esko Seppänen and Ilda Figueiredo, on behalf of the GUE/NGL Group - B6-0468/2008),
the oral question to the Commission on Getting a grip on energy prices, by Esko Seppänen and Ilda Figueiredo, on behalf of the GUE/NGL Group - B6-0469/2008).
Hannes Swoboda
author. - (DE) Mr President, I would like to welcome the Commissioner and Minister Borloo very warmly. We have a number of questions because we feel, quite honestly, that the European Union - and this applies to the Commission and perhaps also to the Council - has devoted too little attention to oil price trends. Although I have the greatest respect for the Commissioner, I believe that we should be doing more here.
Let me turn, firstly, to rising oil prices. I have always pointed out, Commissioner, that substantial profits are being made. What is happening to them? In reality, they are not being invested in alternative energies, for example, or in other important investment projects; instead, they are being used to buy up shares and pay dividends.
Secondly, as to the falling oil prices which exist to some extent as well, does the Commission have an overview of whether these falling oil prices are being passed on to consumers? I am afraid that this is not the case, and I would be grateful for an answer from you on this issue too.
Thirdly, I would like to raise the issue of energy poverty, which we have discussed before, also in connection with the reports which we adopted in committee. There is no reason why the Commission, independently of future legislation, should not bring in a very practical fuel poverty package. This is not only a measure that the Commission could take; it is also a measure which the individual governments must of course take. Here too, though, we would like to see more initiatives from the Commission.
That brings me, fourthly, to the issue of external energy policy and the energy supply, and especially gas, of course, which is a topic we have discussed many times. I hear that you were in Nigeria recently. It would be interesting to hear what initiatives have been adopted in that context.
We are seeing the Nabucco project drifting, to cite just one example. The Americans have achieved the PTC pipeline for oil. Everyone claimed that this was not going to be profitable but it certainly is profitable now, with the surge in oil prices. They simply said, 'This is what we want and what we need to diversify our energy supply'.
What is Europe doing? I think Europe's approach has been far too wishy-washy to achieve certain things and I would like to see the Council and Commission being far more robust and resolute in pursuing diversification for Europe, as this is also important for our energy supply. A particular concern for our group, however, is the issue of energy poverty and what we are doing to address it, for this is still a very serious problem in Europe.
Giles Chichester
author. - Mr President, I am sorry the Socialists have chosen to vent their old prejudices about profits and social issues in what is, essentially, an economic and industrial question. Clearly, oil price rises are serious for the real economy - especially any volatility or instability in those prices - but let us remember the lessons that we learned from the 1970s. Those lessons include the fact that higher prices will encourage more exploration and the development of resources. They will discourage excessive consumption, and they will drive efficiency. I submit the issue of fuel poverty is an important one, but it should be tackled via social security measures and not through market distortions such as seeking to cap prices.
Let us also remember that prices can come down as well as rise, and that markets always tend to overshoot before settling down at a realistic level. Establishing a truly competitive market is an essential prerequisite for pursuing other policy objectives. This prices issue underlines the fundamentals of EU energy policy and the EU energy situation - the three pillars, namely: the essential need for truly competitive markets - markets which will deliver the lowest prices and the most efficient services; the security of supply issues in our dependence on imported fuels; and the convergence of sustainability objectives with the other two elements of our policy. Let us beware throwing out the baby with the bathwater because we are concerned about price rises last summer and forget that prices come down as well as go up.
Rebecca Harms
author. - (DE) Mr President, ladies and gentlemen, Commissioner, Mr Chichester, of course the prices can go down as well as up, but I think almost all of us here would agree that given the scarce energy resources and their limited availability, and the growing competition worldwide over access to, and shares in, these resources, it is likely that prices will remain very high over the long term.
Current developments and the problem of energy poverty demonstrate that we have not yet responded adequately to this situation. In my view, the acute social problems related to high energy prices must always be tackled through social policy, but we also have to ensure in structural terms that our societies are no longer wasteful of energy resources. Mr Piebalgs will undoubtedly have something to say about this, as he showed such commitment to this issue at the start of his term in office.
The goals of energy saving and energy efficiency must be pursued much more consistently than has been the case so far. We have often said that we should build a different type of house, and that we need different types of heating and cooling systems and more efficient electrical appliances, but where is the large-scale concerted action that we need to harness the major potential available to us in relation to energy efficiency and energy saving?
If there is an area where we need some kind of European master plan or national plans, it is here. In my view, the Structural Funds, the Cohesion Fund and European Investment Bank programmes etc. should be utilised in a joined-up way in order to pursue seriously the objectives that you, Mr Piebalgs, repeatedly proposed three years ago.
If we look at the current debate about oil prices, for example, and see what has been proposed in this House in order to apply the brakes to the Commission, which after all wanted to make cars more energy-efficient, the question we should be asking ourselves is whether the idea that prices will remain high for the long term is actually being taken seriously.
Commissioner, I would like to encourage you to place your earlier proposals on energy efficiency and energy saving at the heart of the Strategic Energy Review, because this will be the area which will determine whether we do the right thing for our societies or not, and whether we serve their needs at times of permanently high prices.
Anne Laperrouze
author. - (FR) Mr President, Mr Borloo, Commissioner, ladies and gentlemen, the increase in energy prices is having all kinds of negative effects, the most obvious being the rise in the cost of living for our fellow citizens. This again illustrates just how reliant we are on energy. Various actions are needed if we are to reduce energy price fluctuations and, more especially, drive down prices.
I have three proposals to make in this regard. The first course of action concerns the economic management of energy prices. This is something that has to be done right away, in other words the Member States need to develop financial mechanisms whereby the factor of rising prices can be deleted from company budgets and from household budgets too. They also have to promote social measures aimed at combating energy poverty in low-income households.
The second line of attack is to work on the prices being charged for imported energy. What are you proposing that will enable the European Union to speak with one voice when dealing with the producer countries - and people are always talking about 'speaking with one voice' - so that all these neighbourhood policies and partnership agreements can at last take proper account of the energy dimension? Allow me, perhaps naively, to put forward a solution that might help ease relations in our negotiations with Russia. Why not interconnect the Nabucco gas pipeline operation with the South Stream project? Perhaps this would help calm things down a bit.
The third course of action is to reduce imports, or even stop them completely, which would be the ideal solution. To achieve this we need to break the symbiotic link between increasing growth and increasing energy consumption. It is really important that growth should not automatically generate a proportionate rise in energy consumption. Of course we need to develop renewable and low-CO2 forms of energy, and the report presented by our colleague Mr Turmes is a step in this direction. Being efficient in energy also means saving energy, which is something we are not doing sufficiently at present. The texts that will be tabled here are therefore well overdue. We need to focus on physical and technological energy storage capacities and indeed on those elements that are acting as vehicles for energy consumption.
Could you tell us, Mr Borloo, if you have high hopes of the energy-climate package being adopted at any time in the weeks ahead? What would need to happen before an ambitious package of measures is put in place to meet these various objectives?
Esko Seppänen
author. - (FI) Mr President, Commissioner, in the compromise resolution the significance of speculation in the rise in the cost of energy is excluded from energy prices. Virtual oil is, however, being sold on the derivatives markets for six times more than physical oil. The price of electricity is also tied to the securities market: virtual electricity is being sold on the energy markets for more than physical electricity, and on the European Energy Exchange it costs five times more.
There is massive evidence of fraud in the OTC derivatives market, which is unregulated and not monitored by the stock exchanges themselves. The harmonisation of electricity will result in automatic windfall profits for big companies, and by 2013 emissions trading will increase the scope for speculation many times over.
In the energy derivatives markets, consumers are being forced to pay the price of speculation, the same way they did in the subprime mortgage market in the United States: the profits were privatised and the losses are being socialised. Capitalism is a casino where the price of energy is raffled in the stock exchanges. Thank you.
Jean-Louis Borloo
Mr President, ladies and gentlemen, after having listened to the various questions that practically everyone seems to be asking, allow me to make a few remarks of my own.
The first concerns the erratic way in which prices have been changing: at one point USD 10, then 140 a short time ago, now it is back to 100. In fact there seems to be a disconnection between the way the product itself is appreciating and the financial market that is based on that very same commodity. However, in the long term, it seems to me to be fairly clear that speculators will always be active as long as it is our perception that global energy needs - which continue to grow - are not based on a new energy mix that is less reliant on hydrocarbons.
Moreover, I note that in Jeddah at the end of June, where Commissioner Piebalgs and I attended a gathering of all the producer and consumer countries, the common message was absolutely clear. The expectations were unmistakable: the main consumer countries have to indicate their clear intentions to modify their energy mix, implement energy efficiency measures and become less reliant on hydrocarbons. The producers themselves are all for this. I think that this is what the forthcoming climate-energy package is all about and I believe that Europe's 500 million consumers are saying: let us have more locally produced energy, more self-sufficient energy, and let us have a more direct link between producers and consumers.
That said, in the very short term it is obvious that there are various regulatory problems to be solved, including access to information on commercial stocks, and this does not just mean strategic stocks. The United States does it, Japan does it. The Commission has been asked to think about this. I believe that by the end of October or early November the Commission will be putting forward a proposal aimed at providing greater transparency in this area in the very short term. However, a proper strategy for energy self-sufficiency and a different energy mix still represent the most effective response in the medium and long term.
Andris Piebalgs
Member of the Commission. - Mr President, I think these are very timely questions and this is a very important debate. The Commission is now finalising the second Strategic Energy Review, which is also based on the debates in this House. I expect that this second Strategic Energy Review will be adopted in November, and it will particularly cover the issues that we have been addressing today.
Definitely there is a limit to what we can propose in the strategic energy review due to the Lisbon Treaty ratification, because there is an energy article that would give much more opportunity to streamline the response. But still we can do quite a lot.
The Commission shares the opinion that oil prices are likely to remain high in the medium and long term. The justification for this type of prognosis is volatility in daily markets. Even if now, the oil price is USD 106 or USD 110 per barrel, which is much lower than it was some time ago, at USD 145, the daily volatility still makes the situation relatively difficult to predict, and it is definitely making a major, wide-ranging impact and deserves a response.
While there is clearly a need for short-term action by Member States to mitigate the impact on the most vulnerable households, the main policy response should aim at facilitating our transition towards clearly more sustainable ways of producing and consuming energy. In other words, to pursue our aim of becoming a low-carbon and energy-efficient economy. In order to do so it will be vital to take forward the Commission's proposals on climate and energy policy, following up on the political commitments of the European Council.
On the structural reforms. It is important to underline that we are facing an energy price increase, not only for oil: it also goes for coal, it also goes for gas and, as a result, it also has an impact on electricity prices. Links between these prices are related by pricing structure: for example, gas contracts often use oil price benchmarks; gas-fired electricity generation is increasingly marginal and thus price-setting. So I think it is very important to address not only issues about oil prices but all the sectors. The situation clearly reinforces the need for encouraging competition throughout the whole energy sector. That is why, again, I would like to underline the importance of swiftly reaching an agreement on the third internal energy market package.
Europe can and must develop its own strengths to deal with the fast-changing global energy economy. A well-functioning, fully interconnected and competitive EU-wide internal market is a response. This will diminish European vulnerability to energy-supply disruption and facilitate our cooperation with energy producer and transit countries. Solidarity between Member States in crises will be enabled by European networks.
On European energy oil stocks, we have now prepared legislation that will clearly address two things: one, that these oil stocks will be always available at moments of crisis and can be easily used; and second, it is issues of precedence addressed, it is transparency and reporting on a weekly basis on commercial stocks. In this respect, even though we are not the biggest oil consumer in the world, we are able to influence transparency in the market and diminish volatility and the level of speculation in the market.
Speculation is definitely an issue. We have done an analysis. The available evidence suggests that supply and demand are the main drivers of oil prices, and that these fundamentals are set to underpin high prices in the future. But, at the same time, we will continue our work on analysing what impact speculation has at a particular moment and whether there is really the ability to diminish volatility and have more supervision in the energy market.
In any case, it is very clear that transparency in oil markets, both in terms of contracts and related financial instruments and fundamentals, is a must. I would also like to say that both Commission and national competition authorities are acting against anti-competitive behaviour. This is a way in which we can pass the changes in oil prices to the consumers, because consumers use refined products. The Commission will make additional efforts in this respect - we are following this issue - and a lot of competition authorities in member countries have already started investigations into the issue of how soon and how fast the oil price changes are being passed to the consumers. At the same time it is very clear that there are differences between different member countries, because there are different sourcing strategies for the companies concerned. Also, in some countries there are biofuel blends that also influence the velocity of the possibility to change prices according to the oil price. Nevertheless, it should be very clearly in the focus of attention in all anti-trust authorities.
Energy efficiency, renewables and diversification: it is very clear that our main lines are in our energy and climate policy, and it will be prominent in our Strategic Energy Review.
There is already a substantial European legal framework in place. In addition, there are many actions being pursued under the current Energy Efficiency Action Plan, including also legislative initiatives and studies. And there are also support actions, for example under the Intelligent Energy Europe programme.
Regarding existing EU legislation, it is implementation that is very essential. The ambitious 2020 target for energy savings cannot be met without adequate transposition by Member States. The Commission is vigorously pursuing infringement procedures to ensure that member countries are really implementing their existing EU legisaltion.
This year the Commission also will adopt an energy efficiency package. This will include a communication with a comprehensive overview of the Commission's ambitions for energy effciency, as well as legislative and policy initiatives - in particular, prominent proposals for an ambitious recast of the Directive on the energy performance of buildings; also for a modification of the Energy Labelling Directive, to ensure more effective and dynamic labelling. Needless to say, continued high energy prices further support the need for action in this area. And also we get clear involvement of the European Investment Bank in this area.
The European Council, when analysing the appropriate responses to the high oil price situation, underlines the importance of a sustainable and adequate tax framework.
There is considerable scope for the EU and its Member States to make more systematic and effective use of taxation to encourage energy savings. The Commission intends to present proposals and recommendations on the cost-effective use of taxation and specific tax incentives, including reduced VAT, to promote the demand and supply of energy-efficient goods and services.
Furthermore, in its review of the Energy Tax Directive, the Commission will look at how it can better support the EU's energy and climate policy, encouraging energy efficiency and emission reductions. More widespread and systematic use of road pricing, in line with the principles of the Commission's 'Greening Transport' Communication, would also encourage a shift to more energy-efficient transparency rules.
On financing alternative energy technologies and research, let me draw your attention to the fact that we are in the process of preparing a communication on financing low-carbon technologies as a follow-up to the European Strategic Energy Technology Plan. The Communication will analyse the resource needs for long-term research and development, large-scale demonstration projects and the early-stage commercialisation phase. We are considering measures that best use public investment to leverage additional private investment, such as the creation of a specific facility for large-scale demonstration projects. This could be built on existing instruments such as the Risk Sharing Financing Facility, a joint initiative of the Commission and the European Investment Bank. The Commission also encourages Member States to use national resources, for example potential resources that could be raised through the auctioning of CO2 allowances in the revised ETS schemes.
On energy security and foreign policy aspects, I come back to the idea that Europe can and must reinforce its own strengths to deal with the fast-changing global energy economy. Internal and external policy in energy work together. The stronger a common European energy market is, the stronger it will be towards external energy suppliers. We are pursuing diversification with countries like Azerbaijan, Turkmenistan, Egypt, Iraq, Nigeria, but it is clear that we also encourage predictable relations with current suppliers like Russia, and definitely we are looking very much at the possibility that Norway could increase supply to the market, because it is very clear that the EU market is attractive for suppliers, and we should not be afraid that we will run out of gas, but we should really work for competitive supplies to the European market and not be in a situation where we could be blackmailed on prices.
Regarding the issue of assistance to oil-importing developing countries. Given the strong impact of access and price of energy on development and global climate change, energy cooperation is increasingly important throughout our development assistance activities. It was a central theme of my joint visit with Commissioner Michel to the African Union and a number of African countries earlier this month. We invest substantial resources in supporting movement of these countries, not only to eliminate energy poverty, but to power themselves with clean and new energy sources.
On macroeconomic and social aspects, the increase in oil price levels certainly put a strain on consumers and certain sectors of the economy which face difficult adjustment processes. More immediately, most member countries have undertaken - or are currently considering - short-term measures in response to the recent surge in energy prices. In line with the European Council conclusions, most of these policies focus on vulnerable households. Some Member States have also implemented or discussed temporary measures targeted at specific sectors.
As high energy prices are expected to prevail in the long term, it is essential that the policy measures aim at facilitating the structural shift to more sustainable patterns of production, transport and consumption. This also points to the significance of flexible product and labour markets and the Lisbon agenda, and to the importance of the transition towards a low-carbon and highly energy-efficient economy.
But I believe there is clearly not one answer to these issues. Still, the framework that we propose with the energy and climate change package and the internal energy market package is a backbone, because, the sooner it is adopted, the stronger we will be, and also there will be more competition and lower prices for consumers. At the same time we should be open and honest and say to the people: do not expect oil prices to come back to USD 20 per barrel. That means each of us also should change our behaviour, because part of the issue is also our behaviour, and I believe that we should really pay true attention in our everyday lives.
Jerzy Buzek
on behalf of the PPE-DE Group. - (PL) Mr President, we are confronted by two different problems. The first relates to the price of oil and gas. The Union imports most of the aforementioned resources. The second relates to the price of electrical energy.
Regarding the first point, I should like to say that oil and gas prices could fall, if the producers, not just the consumers, become subject to market forces. This is a subject for our negotiations as a Union with Russia, the North African countries and OPEC. We must also significantly improve energy efficiency and energy saving. It is our duty to do so and we should give priority to this task. We have been discussing it for a long time now. Obviously, we must also develop the use of renewable energy, as it exploits our indigenous resources. It will certainly not suffice for our purposes, however. That leaves us with our coal and our nuclear energy. If we wish to forestall drastic price increases, we cannot afford to disregard either of these two energy sources.
This leads on to the second point, namely electrical energy. The cost of electricity could be reduced through a determined effort to create a common European market in energy. Swift implementation of the third energy package is needed. We can also control electricity prices through sensible and gradual implementation of the energy and climate change package. This is particularly important for the electrical energy sector. In connection with the latter, it is important to consider benchmarking or phase-in arrangements in the directive on the emissions trading scheme.
I should like to thank the Commission for undertaking such hard work on these matters, and the authors of the resolution for raising the subject.
Robert Goebbels
on behalf of the PSE Group. - (FR) Mr President, on 2 January 2008 Richard Arens, who is a trader at Nymex, offered USD 100 000 for a consignment of one thousand barrels of oil. The price of a barrel of oil had reached USD 100 for the first time. The trader laid out some USD 5 000 for this transaction. He sold it on immediately and in doing so accepted a loss of USD 800. It was a small loss that he fittingly celebrated with his colleagues as being the first to break the psychological barrier of USD 100 a barrel.
New York traders were frequently to celebrate new records in the months that followed. On 14 July oil reached USD 148 a barrel. Even if prices are now falling again the damage has been done. The explosion in oil prices has triggered an orgy of speculation in raw materials, including foodstuffs.
The global economy cannot do without markets, but it is unacceptable for the financial world to be indulging in wild commercial gambles more worthy of a gaming casino. With a lever of a mere USD 5 000 the New York trader had succeeded in triggering a wave of speculation on oil that was to wreak havoc throughout the world economy. The stock-market authorities finally put the brakes on this unadulterated speculation by prohibiting traders, at least temporarily, from selling shares they did not hold, a process known as 'naked short selling'. If we are to curb this unhealthy practice it is not temporary rules that we need but absolutely strict regulations. We therefore have to be more consistent in the way we control the gambles being made by the speculators. The US Senate is now debating a proposal aimed at increasing to a minimum of 25% the actual stake being put up by traders for each transaction. This would prevent many of the risky gambles that at the moment are based on nothing more than small change.
The amount of money invested in the US raw materials market alone has increased tenfold in the course of the last four years. The price index for the 25 main commodities has exploded by more than 200%. Price levels are no longer being determined by physical supply and effective demand for raw materials but by the speculative mechanisms of the financial markets. During the first six months of this year 60% of the deals being done on the American oil market were for virtual oil that was repeatedly sold and re-sold. The stock exchange is no longer being used as a means for adjusting the complex interplay between available supply and actual demand but has become a venue where bets are being placed on financial products whose complexity is even too much for those in charge of the finance companies to understand. The only thing that matters to the traders and their bosses is the bonus. All these 'golden boys' from this global casino have pocketed millions while losing billions belonging to their clients. The profits were cashed in while the losses have now been nationalised. American taxpayers are going to have to fork out more than USD 1 000 billion to pay off the bad credits of the financial world. This is equivalent to seven times the total EU budget.
In Europe, too, purchasing power is down, credit has become more expensive and recession is looming. The Commission and the national governments have always refused to introduce too much regulation to the financial markets, which were renowned for their efficiency. However, with the total demise of these financial geniuses the public authorities now have to act quickly by imposing stricter rules and by introducing effective measures to prevent the wild speculation running through the markets, including the oil market.
Liam Aylward
on behalf of the UEN Group. - Mr President, I welcome the fact that this debate is encompassing all energy prices, and not just that of oil - which of course is a major concern. Over the past year it is not only oil that has experienced a price shock: the cost of coal and gas is rising just as fast as oil, if not faster. As is always the case, the consumers are the worst affected.
Spikes in energy prices put huge pressure on the budget of the average consumer. As representatives of the people at policy level, it is up to us to implement policies that will ensure a sustainable fuel supply at a reasonable price. How can we achieve this as fuel wells' supplies approach depletion? We should be concentrating to an even greater degree on renewable energy and resources. We should increase study of, and investment in, alternative fuel sources. This is by no means a new idea, yet to date we have not done enough in this regard. We have a duty to the European people, and for the sake of our environment, to turn our words into actions.
Environmental protection and consumer financial welfare are not mutually exclusive goals. By spending more money, time and resources on the area of renewable energy, we can achieve them both and can ensure a sustainable supply of energy for the future.
Claude Turmes
on behalf of the Verts/ALE Group. - (FR) Mr President, ladies and gentlemen, Mr Goebbels is quite right that there is massive speculation in oil prices, and indeed Mr Borloo and Mr Piebalgs have said the same. The Greens, the Socialists and the United Left have all tabled amendments aimed at ensuring that our resolution takes this issue into account and those on the Right who today applauded the idea of measures to combat wild speculation in the oil market - and I am delighted about that - will, I hope, be voting for our amendments tomorrow. It would be ridiculous if this House were to vote for a resolution that did not deal with the subject of excessive speculation in the oil markets.
The second important matter is the social aspect. We have to help the poorest members of our society to overcome this situation. I for my part would recommend targeted aid. It would be better to give poorer households EUR 100 than to float so-called good ideas such as reducing VAT. This notion, so dear to Mr Sarkozy, will clearly be rejected tomorrow by Parliament, for we would rather side with Mr Borloo, who is for encouraging the bonus-malus system, by giving citizens access to services and appliances that consume less energy.
Let me just make two final remarks. Firstly, we shall only be able to deal with the issue of the allocation fund by making progress in the area of energy management and renewables management. I would therefore ask the Commissioner if the Commission is once again set on looking foolish by presenting a strategy document on energy and energy security that fails to deal with the issue of transportation? In all the drafts that I have seen there is no mention of transportation. This is ridiculous, for Europe is most heavily reliant on oil, not on gas, and there is nothing about this in your documents.
Now a final remark to Mr Borloo: today Coreper discussed renewable energies and I for my part no longer comprehend the French Presidency. You are undermining things with the rendez-vous clause, including the 20% target. Thankfully, this proposal was today rejected by the majority of the Member States. I would therefore appeal directly to the French Presidency: stop jeopardising this directive, for it is a very important document.
Sergej Kozlík
(SK) Europe has a great opportunity to influence energy prices by achieving sufficient production of its own energy based on resources other than oil and gas. Is Europe going down this route, however?
In the 1980s, Slovakia and Hungary began the joint construction of the Gabčíkovo-Nagymaros hydroelectric power plant. Hungary subsequently withdrew from the project and Slovakia completed the hydroelectric power plant alone. Rather than the production of peak energy, the consequence was an international arbitration dispute, the results of which, however, have been ignored by Hungary.
In the 1990s, Slovakia invested significant resources in improving the safety and extending the service life of the Jaslovské Bohunice nuclear power plant. The International Atomic Energy Commission confirmed that the safety standards were satisfied. As part of the process of accession to the European Union, however, Slovakia was obliged to close two reactors at the power plant prematurely.
The European Commission is currently considering the matter of the construction of two additional reactors at the Mochovce nuclear power plant. The first two reactors are already operating safely and efficiently. The European Commission, however, is taking its time in producing a response. The example of Slovakia shows that the aim of increasing our own production and thus controlling energy prices in Europe is still a long way away.
Margaritis Schinas
(EL) Mr President, the rise in oil prices this year is a major scandal, which hits the lowest-income households in Europe. It demands answers in terms of policy because, as well as adjusting to a green economy, a policy for pipelines, and an energy package policy, we must resolve the fight against the oil cartels without fail.
There are currently two oil cartels operating at the expense of European citizens.
One is the international oil cartel, which we do not address in one voice - or any voice at all - because when OPEC acts, it feels under no pressure from the EU to refrain from doing so.
There is a second cartel, within the European market itself, Commissioner; your fellow Commissioner responsible for Competition is still observing it without interfering. I think that beyond the profiteering issue that Mr Goebbels has quite rightly raised, we have to deal with a lack of transparency in the internal market for petroleum products. This is a shining opportunity for the European Commission's Directorate General for Competition, from which we expect some action in the interests of citizens, as, if I am not mistaken, competition policy remains a Community responsibility.
If, then, we have difficulties with OPEC, let us implement competition policy within the EU.
Eluned Morgan
Mr President, there are going to be radical changes in the way the EU produces and consumes its energy. This has been based on a three-pronged strategy by the Commission: security of supply, sustainability and competitiveness. But the Commission left out a fundamental part of this important debate, namely the issue of affordability.
Since the publication of the Green Paper on energy, Socialists in this Parliament have been asking for consumers to be put right back into the driving seat. We want to see energy poverty as a part of this debate. So far in the EU there are no national definitions and there is no data collection, so we have no idea of the scale of this problem. We know that energy prices have been rising exponentially and they are hitting the most vulnerable in our society the hardest.
I would like to give fair warning to the Council that, in the negotiations on the electricity and gas directives that we are about to begin, the issue of energy poverty will be fundamental to our agreement. We are not going to step on your toes. We are asking for domestic action on this - not Community action - but we do expect action for the poorest people in the EU on energy poverty.
Luca Romagnoli
(IT) Mr President, ladies and gentlemen, I would venture to suggest that one cannot possibly say how to curb rising energy prices in just over one minute. Let us try to sum up the situation: first of all we need national social policies in favour of the most vulnerable groups and small businesses, such as fishermen, but also public authorities. I am therefore in favour of targeted social measures, as Mr Turmes said. Next, we need a different policy towards producer cartels and countries, as Mr Buzek and perhaps others have said. This is without doubt essential.
I also wish to stress another aspect on which we often draw a blank. It is the question of excise duty. If the maximum price governments could charge for fuel were capped, excise duty would automatically be adjusted to this ceiling without infringing either fiscal subsidiarity or the laws on free competition. Why not consider this idea? It seems to me that Mr Piebalgs was implying that he favoured something similar.
Generally speaking, in my view, we need a strategy which rewards those who consume less and penalises those who consume more: in other words, a strategy which rewards energy efficiency. However, we also need measures to clamp down on speculation, which do not exist as yet, and a two-way adjustment of retail prices and production costs.
Vito Bonsignore
(IT) Mr President, ladies and gentlemen, the trend in energy prices is throttling the economy and eroding the purchasing power of families, who are seeing energy bills rise relentlessly.
In this new context the link between energy prices and foreign policy, and hence the increased political clout of producer countries, is obvious. Clearly, Europe must pursue a short strategy based on speeding up the use of renewable energy sources, the promotion of and search for new methods of exploiting natural, clean energy, and the building of new pipelines. Therefore it is also necessary to increase our oil and gas reserves.
All of this is not enough; new initiatives are required. I would emphasise the two proposals made by Prime Minister Berlusconi in recent weeks: a coming-together of all energy-purchasing countries and hence the setting of a maximum price; and the launch of a major plan for nuclear power stations. Can the Commission respond to these two proposals, Commissioner? Furthermore, when elucidating its strategies for mapping out a different future in terms of supplies, can you tell us whether - as far as you know - financial speculation is taking place, and what the Commission intends to do about it?
Reino Paasilinna
(FI) Mr President, this resolution is important and we have our own basic view of it. This situation is as stormy as the Bermuda Triangle, and dependence, climate problems and prices that the poor just cannot pay are making the sea churn - not to forget the speculators and the price of food.
Saving energy is necessary and the most effective solution; that we know. The carbon footprint of the poor, however, is tiny compared to the rich, who have no intention of actually reducing it but are ready simply to pay more.
Should we in this situation therefore introduce legislation on energy taxation that is progressive? Those who can afford to pay would pay relatively more for energy. Or should we impose a higher price on goods that consume a lot of energy or services that waste it? The speculators must obviously be brought under control. We speak of sustainable development: its heroes are the energy-poor and their situation needs to be organised sustainably. That is our basic view.
Jim Allister
Mr President, among the projects that the EU has encouraged is the single electricity market on the island of Ireland. Can the Commission explain why it is not working for consumers in Northern Ireland and why, instead of stability and price savings, we have seen a massive 52% hike since January of this year and an ever-widening gap with prices prevailing in the rest of the United Kingdom, where in the same period the price rise was 29%? Big in itself, but a lot less than 52%.
Will the Commission investigate the failure of this scheme to deliver the promise of Minister Dodds, when he launched it, of efficiency savings and enhanced competition to help minimise the wholesale cost of electricity, with the vast bulk of the benefits, he said, going to the consumer? For my constituents, less than a year on, that rings very hollow indeed. In particular, will the Commission investigate the contribution to the non-delivery of the single electricity market of the failure adequately to address the dominance of the ESB in the southern market and the resulting lack of competition, which of course is the imperative to success in any single electricity market?
Ari Vatanen
Mr President, we always talk about renewable energy when we talk about prices. Well, we know that it is going to cost us an arm and a leg and so financial responsibility regarding energy prices often has gone with the wind. What about this 80%? What about meeting the needs of tomorrow's increasing energy consumption?
Look at Nord Stream. We are just talking about the environmental standards regarding Nord Stream. Well, that is a little bit like looking at the standards of the rope that is a noose around your neck, because Nord Stream and such projects are reducing our energy independence when we have to increase our independence.
So, what are we going to do? The only really responsible answer is the nuclear one: it is independent, it is cheap, it is competitive and the price is foreseeable - it is also emission-free and Russia-free.
Atanas Paparizov
(BG) Mr President, Commissioner, in the conditions of growing energy prices it is especially important to ensure more transparency in respect of price formation. Common rules have to be regulated for the development of a single European energy market. This will provide greater security for new investments in the energy sector and in electricity and gas transmission networks. It is precisely the third energy package that must be adopted as soon as possible, and the role of the Commission and the Council in this respect is particularly significant. The package strengthens the rights and independence of energy regulators, and harmonises their activities through the newly established agency. It is also necessary to pay particular attention to the notion of "energy poverty" and to the national definition of this notion, among other things in order to ensure, through the mechanism of public services of general interest, a minimum amount of energy in winter for people below the poverty threshold.
I believe that the problem of high energy prices could also be brought under control by an adequate energy policy, intended to offer incentives to energy efficiency, renewable energy sources and environment-sparing products. We will consider with interest the proposal on the matter of energy efficiency that Commissioner Piebalgs discussed in his statement.
Rareş-Lucian Niculescu
(RO) According to research, at least 20% of the energy consumed in the EU is wasted. We should stress that households have an energy-saving potential of nearly 30%, which means that one third of the energy currently consumed by apartment buildings can be saved. A handy solution is the heating rehabilitation of houses, but this solution is unjustly ignored and underfunded by the European Union.
In Romania, for instance, rehabilitation would lead to savings in excess of 600 000 tonnes of oil equivalent every year. I believe that the European Parliament should support the increase by at least 10% of the EU funding that can be allocated to improving household heating efficiency. This is a concrete, convenient and sustainable solution to the problems caused to citizens by the increasing price of energy.
Gyula Hegyi
Mr President, I would like to speak about only one aspect of energy prices, namely the price of district heating. In Hungary, hundreds of thousands of households use district heating - mostly families with modest incomes - and its price is a crucial social issue. However, due to the run-down infrastructure and for other technical reasons, district heating is far more expensive than individual heating. This contradicts common sense and the basic interests of the environment. That is why, whenever I can, I urge the Commission and the Council to provide financial support to improve district-heating systems in order to make it socially acceptable and environmentally efficient. As long as district heating is more expensive in some Member States than individual heating, it is nonsense to speak about energy efficiency.
Paul Rübig
(DE) Mr President, Mr President-in-Office of the Council, the European Commission has unveiled a package of measures for the safety and security of nuclear power plants. Will you ensure that this package is now finally put on the agenda of the Council working group so that it can become a success for the French Council Presidency?
I would like to ask Commissioner Piebalgs whether it would be possible to talk to Commissioner Kovács to see whether we could get some incentives and opportunities to write off investment in the energy sector, so that the profits can be invested sensibly. This could also drive down prices.
DanutBudreikait
(LT) In order to solve our energy problems, it is essential to have a common energy policy with foreign policy aspects. We have to establish the internal market. The third energy package forms the basis of this. However, the directive itself is not the answer. We need financial input and the creation of proper links in the sphere of both gas and electricity. This would guarantee our energy security.
With regard to the external aspect, the European Union, like the WTO, should speak unanimously. The Commission should have the power to negotiate energy prices. This should not be a matter for every individual state to speak about; we should negotiate this subject jointly as one major world market participant.
We should take a wider view of who our energy suppliers are. Are we not building gas pipelines that could potentially have no gas, as is suspected with Nord Stream? Do we view the Arctic as a potential energy source?
I would also like to point out the importance of short-term measures. Here I am thinking of talks with the OPEC countries and the issue of value added tax.
Christopher Beazley
Mr President, during this debate colleagues from the Socialist and Green benches have referred to speculation and how unacceptable that is in terms of energy prices, and I agree with them. I would ask them also to reflect on the political context of energy pricing, and in particular on the career of former German Chancellor Gerhard Schroeder, currently employed by Gazprom, who quite clearly is pursuing an interest which is nuclear-free, but as Ari Vatanen has reminded us, is not free of Russian politics.
I should like to ask the Council if it could explain in its reply the route map towards achieving a common energy policy in the EU, giving the timescale. And I should like to ask the Commissioner whether he has produced a table for the Council of relative costings of oil and gas, for example from Russia, as opposed to liquefied natural gas from Qatar, nuclear energy, and all the others, because it seems to me that our governments are not actually producing energy at the prices that the consumers would want. They are pursuing their own political interests.
Jean-Louis Borloo
Mr President, here are three pieces of information. I really think that the era of producing energy in one place and then transporting it and selling it all around the world has taken us into a territorial situation that for good reason has become part of the global financial crisis, for there is rainfall that is beneficial and then there is flooding. When we suddenly have too much rain in a place that cannot absorb it we call it a flood and a disaster, and this results in a stream of by-products and in all this accumulated money supply being managed in an unreal way.
Mr President, Commissioner, ladies and gentlemen, energy is the subject of the century. I have listened to Mr Goebbels speaking just now and I was struck by the emotive tone of his contribution. I am of the view that we not only have to reduce our consumption levels but also localise it in a way that removes our dependence on the type of energy involved. This will also create problems, as is the case with coal, which is a localised resource and one that has to be taken into account. We also need to localise speculation, we need to limit it and we need to combat it.
The EU-OPEC meeting one and a half months ago proposed calling in specialists to carry out a major review in an attempt to understand what has been happening from a short-term perspective in various market sectors.
Then we have the matter of long-term anticipation. The only response as far as anticipation is concerned is to abide by what was decided at Jeddah, namely that Europe, which means every country in Europe and Europe as a whole, has to move towards energy efficiency and reduced consumption. If we give up six to nine billion, and if we follow this model, then the anticipators will clearly always be right.
The question may arise, Commissioner, about a certain course of action, about increasing the global financing for various areas of research. As for energy efficiency, that is a subject to which we will certainly be returning.
Andris Piebalgs
Member of the Commission. - Mr President, I really would like to reassure you that oil prices will go down. But I would like to draw attention to the issues that somehow we have underestimated. Oil markets have ensured the physical delivery of oil, gas markets are delivering physical supplies of gas and coal markets deliver coal. That means that the interaction between financial markets and oil markets can work. In other words we do not need to question the market, but we need to change the way we produce and consume energy inside the European Union. This is the real answer, because we cannot expect the market to become easier.
There is growth. If growth is there, then there is more demand for energy resources, and none of the existing energy resources are in such quantities that we can say easy access is guaranteed. So for this we need a paradigm shift, we need to really invest in energy efficiency, renewables, research and development: a new investment.
But for this we need money, coming from both private investors and public investors. So we should be able to do this only if there is a really functioning market. A really functioning market means that everybody pays the real price to cover not only the cost but also the interest on investment. What we need to concentrate on - and there is EU existing legislation on this - is public service obligations that apply to households or small and medium-sized enterprises that really need it. But we should not deviate from this course.
I believe - and I have said it again and again - that the proposals made in the second package are crucial to making this change, and for this to be strengthened we will add a couple of elements in the second strategic energy review under the headings: infrastructure needs and diversification of energy supplies, external energy relations, oil and gas stocks and crisis mechanisms, energy efficiency and making the best use of the EU's indigenous energy sources.
We are on the right track. We do not need to deviate and believe that there is a magic solution that will bring prices down immediately. But, if we follow this path, we can really guarantee that already in this generation we will have efficient, affordable, clean energy. If we are slow in changing the energy sector, then not only will we suffer but also the next generations will suffer.
So we are at this critical stage and, as the Minister said, energy is this century's main issue. It is a main issue, but the public perception is not always there. The belief is that we have this silver bullet which will change everything. We should continue on the path we have started with Parliament, and I believe it is consistency that matters, and I very much hope that the proposed legal proposals will be adopted during this Parliament. It is crucial: this is the best response to the rising oil prices.
President
I have received six motions for a resolution pursuant to Rule 103(2) of the Rules of Procedure.
The debate is closed.
The vote will take place tomorrow.
Written statements (Rule 142)
Ilda Figueiredo
in writing. - (PT) We recently saw an unprecedented rise in fuel prices. This mainly resulted from speculation engaged in by companies which have made very high profits from the speculative valuation of oil stocks purchased at lower prices.
This scandalous rise in prices has worsened the living conditions of the general population, particularly the economically weaker sections of society, and has had a devastating impact on economic activity in various sectors, such as transport and other services, industry, agriculture and fisheries.
However, despite a significant fall in the price of crude oil, in some countries high prices are being maintained and the victims are the consumers. This should prompt the creation of a tax, by each Member State, imposed solely on extraordinary and speculative profits in order to bring these into the State coffers, which can then help to support the sectors and people most affected by the situation.
However, the main changes should be structural, with a halt to the liberalisation of the energy sector, bearing in mind that this is a strategic sector for development. As a result, this should be nationalised in order to guarantee public policies that serve national interests and the population as a whole.
Urszula Gacek
in writing. - How appropriate that the European Parliament is debating energy prices just as the summer ends. Many of my constituents are already watching the thermometer with a real sense of dread. Falling temperatures mean that they have to calculate whether they can justify switching on the oh-so-expensive heating.
The day the bill for a household's gas or electricity is expected is anticipated with dread. It is not just the poorest families who have to make the decision of which essential purchases they will have to do without this autumn and winter in order to keep themselves warm.
Households with small children or elderly residents are especially hard hit. They have the most limited budgets and at the same time the greatest requirement for energy.
Any action taken which alleviates the burden of energy costs placed on the most venerable in society gets my wholehearted support.
In the civilised heart of Europe, in the 21st century a warm home cannot be treated as a luxury item.
András Gyürk
in writing. - (HU) In recent months, right before our eyes, energy prices have risen as never before. The soaring costs of energy consumption may have extremely harmful consequences for Europe's competitiveness. Furthermore, the process has a severe impact on the most defenceless layers of society. The problem is made even greater by the fact that some countries subordinate the reserves of raw materials available to them to political goals. For these reasons, the increase in energy prices has become one of the most sensitive political questions.
Although not a single Member State can pull itself out from under the impact of price increases, some countries are in a particularly defenceless situation. Thanks to drifting, erroneous government policy, Hungarian consumers have been forced to bear an increase in gas prices four times in 2008 alone. For this very reason, the increase in energy prices has become one of the most important sources of social dissatisfaction in Hungary.
Coordinated, consistent action is needed in order for prices to remain manageable. Everything must be done to ensure that the system of long-term international agreements that define energy supply is transparent. Furthermore, competition must be tightened up both at Community and Member State level, together with measures aiming for an improvement in energy efficiency. The European Union must take real steps in order to make a firm stand, primarily through building alternative energy transport routes. At the same time, we feel it is appropriate to coordinate measures aiming to protect the most defenceless. We feel that the increase in electricity prices may not combine with an exacerbation of social differences.
Katrin Saks
in writing. - (ET) It is essential that this coming winter the Governments of the Member States do everything possible to support individuals for whom the rise in energy prices may be too much. Price rises of up to 30-40 per cent are also forecast in Estonia. I am especially worried about the impact which rising energy prices may have on those on low incomes, the poor and vulnerable groups.
I agree one hundred per cent that the Member States must take adequate measures to guarantee affordable energy prices. These include dedicated income support and abatements, and incentives to improve the energy efficiency of domestic households.
I am also convinced that the Member States should compile action plans to combat energy poverty. There is above all a need to define 'energy poverty'. Definition of the concept would help focus attention on the objectives. We must lift everyone out of fuel poverty!
Unlike for example in Great Britain, at home, in Estonia, the term 'energy poverty' is very strange. It is a typical example of Euro-jargon which, whether intentionally or not, is creeping into use. Behind it, however, is a very interesting idea with which the authors of legislation must familiarise themselves.
Dedicated support for the elderly, large families and the disabled along the lines of 'winter fuel payments' or 'cold weather payments' in Great Britain play an important role. Measures such as these are, in my view, a magnificent example to others.
There is much talk of savings but little action, although action would be the quickest way of changing anything. The better insulated and energy-efficient our homes, the less we will have to spend on maintaining the temperature inside them. The savings would be large because in Estonia, for example, buildings absorb 40% of primary energy. But on this point we must not rely on leaving things to the initiative of each person feeling the cold.