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Today's paper. Last Updated: 02/09/2012

EU Moves to Cut Winter Gas Risks

Reuters

Andris Piebalgs telling reporters in Brussels on Thursday about plans to overhaul the EU’s energy security rules.
Jim Buell / AP

Andris Piebalgs telling reporters in Brussels on Thursday about plans to overhaul the EU’s energy security rules.

BRUSSELS — European Union countries must build new gas infrastructure to withstand future supply cuts of up to 60 days in winter, the EU’s executive arm said Thursday as it overhauled energy security rules.

The EU aims to reduce the risks from a possible repeat of January’s gas crisis, when a pricing dispute between Russia and transit country Ukraine cut gas supplies to Europe during freezing weather.

Ukraine faces fresh problems with paying for Russian gas and the EU will host talks with Kiev, Moscow and international lenders Friday to try to avert another crisis.

“Europe must learn the lessons of previous crises and make sure that European citizens are never again left in the cold,” European Commission President Jose Manuel Barroso said.

About one-fifth of EU demand is satisfied by Russian gas that flows through pipelines in Ukraine.

EU Energy Commissioner Andris Piebalgs said he had resisted what he described as a knee-jerk reaction of setting minimum levels for gas storage.

He said EU countries could use other measures, such as new supply routes or terminals for liquefied gas shipments by sea. “Where are the biggest challenges? It’s the Baltics,” Piebalgs said. “The two countries where the biggest investments need to be made are Lithuania and Slovenia.”

“The easiest steps are for Denmark, but Greece is also doing quite well,” he added. “Germany is fine. Belgium is doing fine — those countries that have decent storage capacity.”

Europe wants to reduce its reliance on Russian energy and EU countries signed an agreement with Turkey on Monday on the Nabucco pipeline, which is intended to provide gas from the Caspian and the Middle East.

Under the new gas security rules, the European Commission would declare a “Community Emergency” if the EU lost more than 10 percent of its gas imports. EU countries would then have to help each other by ensuring unhindered flow of gas across their borders.

By the end of March 2014, member states will have to ensure their infrastructure is sufficiently diversified to deal with a cut of up to 60 days in freezing weather.

The German government and industry group BDI said energy firms should take the lead in managing gas crises. “Only in very exceptional cases should the Commission step in,” said BDI secretary general Werner Schnappauf.

The proposal now requires the approval of the European Parliament and member states, many of which are reluctant to cede control of energy supplies, despite repeatedly calling on the Commission to help coordinate efforts. EU energy ministers approved a similar proposal on oil stocks last month after stripping it of its most key provisions.

Piebalgs said EU states had been widely consulted on the new gas rules and were unlikely to weaken them.

“I think we have sufficient support to say they will not be watered down, because we have proposed a text that is optimum,” he said.


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