Home­grown en­ergy se­cu­rity for Europe

Financial Mirror (Cyprus) - - FRONT PAGE -

The Euro­pean Union is highly de­pen­dent on for­eign oil. For ev­ery 100 liters con­sumed within the EU, 90 are im­ported. Mean­while, do­mes­tic oil pro­duc­tion is plum­met­ing, down more than 50% over the last decade. Un­less the EU changes course and in­creases its pro­duc­tion of al­ter­na­tive en­ergy – in­clud­ing bio­fu­els, an op­tion the EU has long ne­glected – some 95% of its oil will come from for­eign sources by 2030, ac­cord­ing to the In­ter­na­tional En­ergy Agency.

The cur­rent state of affairs re­mains the EU’s Achilles’ heel, be­cause it im­plies de­pen­dence on im­ports from un­sta­ble, au­thor­i­tar­ian regimes. In 2014, EU mem­ber states spent a stag­ger­ing EUR 271 bil­lion on for­eign crude oil – more than the com­bined GDP of Bul­garia, Hun­gary, Slo­vakia, and Slove­nia. Roughly half of this money went to Rus­sia, the Middle East, and North Africa.

Thus, not only is the EU ex­posed to global sup­ply dis­rup­tions; it is also help­ing to prop up au­thor­i­tar­ian gov­ern­ments and em­power hos­tile regimes, which lim­its its own abil­ity to pro­vide ef­fec­tive, co­or­di­nated re­sponses to threats and provo­ca­tions. The EU’s strug­gle to de­vise co­her­ent political and eco­nomic strate­gies to con­front the chal­lenges posed by Rus­sian ag­gres­sion in Ukraine and the in­ferno in the Middle East is a case in point.

The United King­dom’s re­cent de­ci­sion to boost de­fense spend­ing high­lights the grow­ing recog­ni­tion that strong mil­i­tary ca­pa­bil­i­ties will be needed to up­hold Europe’s se­cu­rity and sovereignty. But as long as its de­pen­dence on for­eign oil per­sists, the EU will re­main far weaker than it needs to be. The pro­posed Nord Stream II pipe­line – which would fun­nel even more gas from Rus­sia to Ger­many – is only likely to ag­gra­vate the sit­u­a­tion.

Europe’s en­ergy se­cu­rity is likely to gain salience in the com­ing months, as 2016 shapes up to be an­other tur­bu­lent year in in­ter­na­tional pol­i­tics. This year is also likely to see the com­ple­tion of the EU’s En­ergy Union, es­tab­lished to en­sure se­cure sup­plies of af­ford­able, cli­mate-friendly en­ergy. Un­for­tu­nately, Europe’s de­pen­dence on for­eign oil has been left out of the dis­cus­sion. The Euro­pean Com­mis­sion must pro­vide clear di­rec­tion if EU mem­ber states are to de­velop al­ter­na­tive sources of en­ergy.

Re­new­able en­ergy from wind and sun can cer­tainly play a role in de­creas­ing the EU’s en­ergy vul­ner­a­bil­ity. Such sources are al­ready help­ing to re­duce de­pen­dence on coal and gas for elec­tric­ity pro­duc­tion. How­ever, when it comes to en­ergy pro­duc­tion from oil – most no­tably fuel for cars – it is likely to be years be­fore wind or so­lar en­ergy can pro­vide vi­able al­ter­na­tives.

The EU should fol­low the ex­am­ple set across the At­lantic, where coun­tries have worked to re­duce their re­liance on for­eign oil. The United States, for ex­am­ple, has cre­ated in­cen­tives for in­vest­ment in al­ter­na­tive fu­els. In­deed, the US is the world’s largest pro­ducer of bioethanol, which – along with the pro­duc­tion of shale gas – has helped re­duce for­eign oil im­ports by at least 25%, while low­er­ing car­bon diox­ide emis­sions and cre­at­ing lo­cal jobs.

Brazil, too, pro­vides a com­pelling ex­am­ple, hav­ing worked since the oil crises of the 1970s to re­duce its re­liance on im­ported en­ergy. To­day, Brazil is a net oil ex­porter and the world’s se­cond-largest pro­ducer of bioethanol, which has re­placed more than one-quar­ter of the gaso­line once used in the coun­try.

Un­for­tu­nately, much of the pol­icy dis­cus­sion sur­round­ing bio­fu­els in the EU is dom­i­nated by out­dated ar­gu­ments link­ing them with ris­ing food prices. Food should not be used to fuel cars, op­po­nents in­sist. To­day, how­ever, ad­vanced bio­fu­els are not based on food, but on waste from in­dus­try, agri­cul­ture, and pri­vate house­holds. In the words of José Graziano da Silva, Di­rec­tor-Gen­eral of the Food and Agri­cul­ture Or­gan­i­sa­tion of the United Na­tions, bio­fu­els “can be an ef­fec­tive means to in­crease food se­cu­rity.” Done right, their de­vel­op­ment would mean “more fuel, more food, and greater pros­per­ity for all.”

Biofuel tech­nol­ogy kills four birds with one stone: It im­proves en­ergy se­cu­rity, re­cy­cles waste, re­duces green­house-gas emis­sions, and pro­duces jobs (of­ten in ru­ral ar­eas). That is why re­plac­ing im­ported oil with home­grown en­ergy is one of the most im­por­tant and far-reach­ing le­ga­cies to­day’s Euro­peans could leave to the Europe of to­mor­row.

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