At their March 2007 summit, EU member states moved to boost European coordination to help secure and diversify energy supplies, increase the development and use of renewable and alternative energy resources within the EU, and reduce energy demand and consumption. Although member state governments remain reluctant to cede national sovereignty over energy-security aspects of their foreign policies, they have set binding EU-wide targets for the use of renewable energies and biofuels, and have agreed to ambitious but non-binding energy efficiency and carbon emission reduction targets for the year 2020. Europe's renewed interest in energy security has been influenced by both internal and external factors. In several hearings during the first session of the 110 th Congress, Members of Congress voiced concern about Europe's dependence on Russian energy resources, and the potential for Russian manipulation of European energy markets. Barring significant policy changes, this figure is expected to rise to 65% by 2030. In 1991, the European Union launched the Energy Charter Declaration, an initiative intended to promote energy cooperation and diversify Europe's energy supply. Despite these calls, some European countries and energy companies have continued to pursue long-term energy deals bilaterally. Europe imports about 50% of its total energy supply—slightly over 80% of its oil and close to 57% of its natural gas. An Energy Policy for Europe? European leaders have responded by renewing efforts to establish a more cohesive European energy policy. Commission officials place particular emphasis on the links between energy security, energy efficiency, and an EU-wide reduction in carbon emissions. However, bilateral energy agreements between some member states, notably Germany, Italy, and Bulgaria, and Russian firms, illuminate continued disagreement within the EU on how best to deal with Moscow. European leaders are expected to agree on a solution during the first half of 2008. Projections for European energy consumption indicate that one of the most important energy security challenges facing the EU over the next 20 years will be Europe's ability to diversify the sources and modes of transit of its energy imports. On the investment side, analysts also see Russia playing the political card. In March 2007, EU member states agreed to a legally binding target mandating that 20% of total European energy consumption be fueled by renewable energy sources by 2020. With regard to foreign policy, efforts to advance energy dialogues with Russia and other energy producing and transit regions are being pursued in a more open and coordinated manner between the EU's Office of the High Representative for Common Foreign and Security Policy and the individual member states, and the Commission has outlined specific foreign policy goals with regard to multilateral treaties and an expansion of the EU's Neighborhood Policy. None of these forums has convened more than twice, however, and at the April 2007 U.S.-EU Summit in Washington, D.C., the United States Administration reportedly rejected European calls for a commitment to pursue binding international global emissions and energy efficiency targets. Just as EU member states have expressed concern regarding a perceived U.S. reluctance to link transatlantic energy security to pursuit of a global climate change treaty, U.S. Administration officials and analysts point to a potential long-term threat to transatlantic relations arising from European dependence on Russian energy and Gazprom's growing influence in large segments of Europe's energy infrastructure.
Recent increases in energy prices and a steady escalation in global energy demand—expected to rise by nearly 60% over the next 20 years—have led U.S. policy-makers to engage in a wide ranging debate over how best to address the country's future energy requirements. Similarly, energy security has become a policy priority for the European Union (EU) and its 27 member states. The EU imports about 50% of its energy needs. Barring significant changes, the European Commission expects this figure to rise to 65% by 2030. About half of the EU's natural gas imports and 30% of its imported oil come from Russia. Europe's growing dependence on Russian energy, and long-term energy agreements between Russian firms and some European governments have fueled speculation that Moscow is using the "energy weapon" to try to influence European foreign and economic policy.
The EU has traditionally exerted little if any influence over individual member state energy policy. However, in March 2007, in the face of increasing concern about Europe's reliance on Russian energy, and growing public pressure to address global climate change, EU member states agreed to forge an "Energy Policy for Europe." They have agreed on a set of EU-wide targets—some legally binding—to increase the use of renewable energy, and reduce carbon emissions. However, member states continue to pursue divergent external energy policies, particularly toward Russia, and some European countries remain reluctant to cede national control over energy markets.
The United States and Europe have steadily broadened the transatlantic energy dialogue to include joint promotion of collective energy security, energy efficiency and alternative energy sources. At the April 2007 U.S.-EU summit, leaders on both sides of the Atlantic agreed to advance cooperation to develop alternative and renewable energy technologies. However, U.S. officials have expressed concern at some European member states' unwillingness to exert more pressure on Russia to comply with EU market principles. On the other hand, European leaders appear increasingly frustrated with U.S. reluctance to pursue binding multilateral regulatory frameworks to reduce carbon emissions and promote energy efficiency.
Members of Congress have expressed an interest in efforts to increase European energy security, particularly vis-a-vis Russia. In the first session of the 110th Congress, committees held hearings that touched on the issue of European energy dependence on Russia, and on European efforts to increase energy efficiency and renewable energy use. The second session of the 110th Congress may also hold hearings and pursue legislation on various aspects of EU energy policy.
This report examines some of Europe's critical energy security challenges and EU efforts to coordinate a common European energy strategy. It also includes an overview of broader transatlantic energy security cooperation and will be updated as needed. For additional information, see CRS Report RL34261, Russian Energy Policy Toward Neighboring Countries, by [author name scrubbed], and CRS Report RS22409, NATO and Energy Security, by [author name scrubbed].