Positive Environment News

ANALYSIS - Merkel Eyes Renewables, Mideast for Energy Plans

Date: 12-Feb-07
Country: GERMANY
Author: Louis Charbonneau

Energy security has become a major political issue in the 27-nation European Union ever since Russia temporarily cut gas supplies to Ukraine last year and shut down a pipeline last month that supplied a tenth of Europe's oil via Belarus.

Merkel says diversification of Europe's energy mix over the long term is the key to achieving a secure and stable supply of energy so that consumers will not find themselves without power.

She won't be able to solve the problem overnight, but she can certainly get started over the next half year, analysts say.

According to Hajo Funke, a professor of political science at Berlin's Free University, the German government's idea of diversification of energy supplies is principally aimed at reducing Europe's dependency on Russian oil and gas.

One possibility is to increase EU oil and gas purchases from Norway, though analysts say the Scandinavian country alone could not solve the problem and give the EU the security it desires.

"One of the focuses of Merkel's energy security drive is peace management in the Middle East," Funke said. "This is why the EU wants a deal to be reached with Iran. In addition to this, it's pushing renewable energy sources in the energy mix."

Russia supplies about a quarter of the EU's natural gas and oil, making it by far the biggest single outside supplier of energy to the bloc.

Although few in the EU dispute the wisdom of pursuing renewable "green" energy sources like solar and wind power, the idea of importing more from North Africa or building pipelines from Iran across Turkey are politically sensitive ideas.


Iran, which has huge gas and oil reserves, is locked in a nuclear standoff with the West, which fears it wants to use its uranium enrichment programme to produce fuel for atomic weapons.

Iran says it has no interest in weapons and only wants to make enriched uranium to fuel peaceful power plants. The United States and EU have tried unsuccessfully to persuade Tehran to scrap its enrichment programme in exchange for incentives.

EU relations with Turkey, which has long yearned to join the bloc, have grown more tense since Brussels froze eight of 35 "chapters" in accession negotiations with Ankara.

Still, Alexander Rahr of the German Council on Foreign Relations says the EU has its eyes set on a future pipeline that would run from Iran to the EU.

"You only need to open the border between Iran and Turkey. This is exactly what the EU wants to do," Rahr said.

Rahr said it would take time to reduce dependence on Russian gas, but added that it would be possible. Europe successfully diversified its oil imports in the aftermath of the oil crisis three decades ago, he said.

Andrew Steel, a managing director at Fitch credit rating agency who also advises the United Nations on energy issues, said fears about energy security were partly exaggerated.

"If there are shortages, then whoever's willing to pay the highest price will get hold of the fuel," Steel told Reuters.

But he said it might be worthwhile for the EU to think about creating its own reserve system to deal with bottlenecks.

"It's impossible to see a scenario whereby countries will agree to let their existing strategic (national) reserves be used," he added. "You could create an EU strategic reserve system. But the member states would have to invest money in it."

Then there is the issue of nuclear energy, which is making a comeback throughout the world. It is a politically sensitive issue in Germany with Merkel's "grand coalition" of centre-left Social Democrats (SPD) and her conservatives split on whether Germany should axe plans to phase out atomic power by the 2020s.

"I think that nuclear power will have a much stronger role to play in the future energy mixes of countries," Steel said. "I'm sure there will be a renaissance of nuclear power over the next 10 to 15 years. I wouldn't be surprised if Ge

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