by Jerome a Paris
Wed Mar 15th, 2006 at 07:58:54 AM EST
I started posting an extract of the article below in the "Breakfast thread, but I started to comment on it, and I started reading it more closely, and my comments grew and grew...
So here they are in full
Berlin and Paris reject EU fuel regulator (Financial Times)
Germany and France gave the cold shoulder yesterday to the European Commission's calls for a powerful regulator to prise open the EU's energy market.
Note immediately the assumption that the regulator's job will be to "prise open the EU's energy market", not to actually, you know, regulate
it, which would include things like definition or coordination of technical standards, ensuring system balancing requirements, promoting security of supply and reliability, emergency procedures definitions and management, enforcement of rules, and (definition and) execution of EU strategy for energy, etc...
Last week the European Union's executive body suggested setting up a European regulator, as part of efforts to spur greater competition and lower the prices consumers pay for electricity and gas in the EU's liberalised power markets.
"greater competition and lower prices". Markets don't provide lower prices. They provide more accurate prices that allow market participants to better allocate their money. Linking "competition" and "lower prices" is pure propaganda - and it works, obviously, as it is repeated unthinkingly everywhere.
Need I post here my table and my map with prices, showing that the cheapest energy is in continental Europe? But maybe that means that France actually has the greatest competition?
Yes, let's post them again:
But Georg Wilhelm Adamowitsch, secretary of state in Germany's economics ministry, said: "We do not need a new agency."
François Loos, the French industry minister, said it was premature to create a European regulator and existing national regulators should first co-operate more.
Note to journalists: so who's against Brussels' bureaucracy now?!
As part of the policy, Brussels also called for compulsory gas storage in member states, more use of "green" energy and a common EU approach to dealing with big foreign suppliers such as Russia.
Energy has moved to the centre of the EU's policy agenda as the Union grapples with high oil and gas prices, climate change concerns, and alarm about its rapidly rising dependence on foreign fuel supplies.
What "rapidly rising dependence"? France, Germany, Italy, Spain (and most of Eastern Europe) import close to 100% of their oil, 80-100% of the natural gas, and have done so for a long time. They have cared about their imports for just as long.
The Netherlands are exporters of gas, but have had long term planning including a cap on production to spare their reserves for future use.
The only country with "rapidly rising dependence" is - the UK. Is Brussels in charge of a EU energy strategy, or a UK energy strategy?
At the same time, conflicts within the internal market are growing as France, Italy, Spain and Germany spar over proposed mergers in the utility sector and several countries fail to introduce EU laws opening their markets to full competition.
FALSE. Not such failure. It's just that directives have been implemented in some countries at the minimum required level, and not at the maximum suggested level. But now this is failing to apply the "spirit of the law" in Newspeak.
The Commission's suggestion for a pan-European regulator is at an early stage but envisages an agency with powers over cross-border infrastructure and transmission capacity.
I wonder if the freemarketistas realise the can of worms they are opening there. Are they actually suggesting that a centralised, Brussels-based entity become responsible for infrastructure investment in a number of countries (and presumably take over national procedures for authorisation of such investments?)
As that map above shows, we are talking about building high-voltage lines in places like the Pyrénées, the Alps or under the Channel, projects that have for a number of them been bogged down for local/environmental reasons. Do they want Europe to overrule these objections?
The Commission believes that alongside a smoothly running internal market, the EU must strengthen its relations with important suppliers such as Russia, which provides a quarter of European gas needs.
"strenghten relations" presumably means: having only one interlocutor facing Russia in order to get better negotiating terms. How is that compatible with "competition" and free markets? How would such public entity allocate the savings extracted from the Russians to the private operators in Europe?
Gas deliveries to the EU were disrupted in January after a price dispute between Moscow and Kiev, sparking concerns about the reliability of supplies from Russia, which is hosting a meeting of Group of Eight energy ministers this week to discuss energy security.
These concerns are stupid, as all Russian pipelines go to Europe - we are their only client. It's a relation of co-dependency, which means mutual benefits if there is a modicum of trust, and mutual destruction if things turn sour.
But there was a guarded response to calls from Poland, which imports 65per cent of its gas from Russia, for a Nato-like initiative to increase EU co-operation over energy security.
One EU official said of the plan: "It's a bad idea. How can we have a Nato without the Americans?"
Indeed, how can we?
So, do we want markets, or do we want top-level political control over the energy sector?
Or is it the fact that political control is enforced by France, Germany and Spain instead of someone else?