Committee Reports > List of Committees > Joint > 1975 > Committee on the Secondary Legislation of the European Communities > Report No. 04 - Energy Policy

SCHEDULE

1. The document contains an outline of a proposed new energy policy for the Community with proposals for a Council Directive on limiting the use of natural gas in power stations, a Council Directive concerning the restriction of the use of petroleum products in power stations, a Regulation of the Council concerning the common rules for imports and exports of hydrocarbons and a Communication from the Commission to the Council regarding the rational use of energy.

2. The new energy policy is designed to counter a repetition of the recent oil crisis which exposed the present defects in the Communities present energy supply system, viz. an undue dependence on oil particularly imported oil whose price has been enormously increased. It envisages the following far-reaching changes in the energy structure both in the long term by the year 2000 and in the medium term by 1985.

Long term (Year 2000)

Nuclear energy should provide at least half of total energy needs; gas (including natural gas) one-third, and the balance obtained from coal and oil. It is considered that at the end of the long term non-conventional types of energy should not provide other than a minimal supply.

The Commission points out that the advantages of nuclear energy are that it uses natural uranium which is available in many parts of the world, can be transformed into fuel in the Member States, is easy to transport and stock, does not present an environmental hazard and makes it possible to increase hydrogen production. As regards gas the Commission points out that over and above its inherent advantages as regards pollution and the rationed use of energy, gas also offers in the long term the advantage of an additional outlet for nuclear energy; the infrastructure for transporting gas could gradually be used for distributing hydrogen or synthesis gas produced by means of heat of nuclear origin.

Medium term (Year 1985)

Energy should be more rationally utilised and wasteful use reduced to a minimum to ensure that internal energy consumption is kept at a level of 10% lower than that considered necessary before the oil crisis. If these objectives are achieved the Commission feels that neither G.N.P. growth would be disturbed nor consumer interests left without supply.

An increase in consumption of electricity from 25% to 35% of total energy needs with nuclear energy providing 50% of electricity production. In this way dependence on oil need not be increased. Maintenance of solid fuel production at their present levels, any increases in supplies to be met by importing coal. A great increase in the production and imports of natural gas and the restriction of the consumption of oil to specific purposes, i.e. as motor fuel or raw material.

3. In order that its policy can be achieved the Commission feels that in regard to—

Electricity

There should be a more rational use of existing power stations. Finance should be made available for the new construction of power stations as a result of a suitable price policy. Coal should find a greater use in the production of electricity if greater supplies were available. Natural gas should not be made available to power stations. Power stations using petroleum products should be restricted to heavy residues from refineries. The building of new oil-fired base-load plants should, save in exceptional cases, be restricted.

Nuclear Energy

This should be developed to the maximum. New power stations should be built within the time required. Steps should be taken to ensure that the development of this form of energy should within the times stated be reinforced by (a) adequate power stations (b) continuous sources of supply and (c) provisions that the health of the general public be protected.

Coal

The Commission recognises that, with continued rising prices in oil, coal production within the Member States has again become competitive. It recommends the maintenance of this situation by the rationalisation of financing and prices, increased research, a wages policy, improved working conditions and the importation of coal to be allowed without domestic production being impaired. Its necessary conclusion to this recommendation is that a common commercial policy for the importation of coal into the Community should be established.

The Commission advocates the encouragement of coal production by finding increased outlets; ensuring that coal production be kept competitive with other energy producers; that the use of this material be promoted by conventional power stations and that a coal stockpiling policy be implemented to anticipate variations in demand and interruptions in the supply of this form of energy.

Natural Gas

By 1985 natural gas should cover 25% of total energy requirements. This would involve the doubling of domestic production and also increased imports. New fields should be found in the Community and imports be increased. Transport and storage systems should be improved and integrated to cope with seasonal variations and to ensure continuity of supplies. Natural gas should be utilised to its maximum advantage. Its use therefore (a) in new power stations should require prior approval and (b) in existing ones should be progressively reduced. This would require a harmonised policy in regard to prices and tariffs.

Oil

(a)Discussions of its proposals made in 1974 should be undertaken by the Council as soon as possible.

(b)Bilateral agreements should be the subject of prior consultation at Community level.

(c)The Community should speak with a single voice particularly in relation to OECD countries.

(d)Prospecting for oil should be stepped up within the Community.

(e)The existing Directives regarding the maintenance of minimum level of stocks and concerning measures to offset supply difficulties should be supplemented.

(f)Provision should be made for the speeding up of the information process and checks on oil movements within the Community.

(g)Harmonised efforts to reduce consumption and to coordinate prices should be undertaken.

4. To ensure smoother market organisation the Commission recommends

(a)that as an immediate step Regulation 1055/72 should be amended to include, in regard to oil, data concerning Community imports and exports, proposed investments by undertakings and the various elements involved in its cost and price,

(b)that continuous liaison should be maintained through the Energy Committee between the Governments of the Member States, the Commission and the oil companies, and

(c)that the existing Community provisions in regard to independent competition and mergers should continue, that hydrocarbon imports and exports be subjected to a joint inspection scheme and that gradually oil prices should be aligned.