There is more than one way to meet the world's fuel challenge Co-operation, efficiency and democracy are the keys, believes Douglas Alexander
Douglas Alexander, The Herald, Mar 25
ENERGY was at the top of agenda yesterday at the European Council in Brussels and it isn't hard to see why.
You don't need to be an economist or a politician to know that gas and oil prices have increased sharply in the past two years.
Anyone who has opened a domestic bill knows the problems posed to ordinary household budgets.
The challenge we have to face is that these rises may not just be blips, as they have been in previous eras. We are entering a new energy landscape with three distinct features.
Firstly, easily accessible oil and gas supplies are dwindling. The UK has become a net importer of natural gas.
By 2030, Europe as a whole is forecast to be importing 70per cent of our energy needs. Supply is becoming scarce.
Second, those countries which do have energy supplies to exploit are often in areas of instability.
The political climate in the Middle East, Central Asia and the Caucasus could make things cold here if we are over-reliant on their gas supplies.
And third, but arguably the most urgent priority, climate change means we have to cut back on the use of carbonbased sources of energy if we are to have any hope of reversing global warming.
In this new landscape, we need new sources of energy that are reliable and environmentally sound and we need national and international solutions to help find them.
A first step is opening a European single market for gas and electricity.
We need to create the conditions where Europe's best energy companies can grow, be innovative and bring benefits to all member states.
Some argue for "economic patriotism" and say we should stop foreign companies investing in domestic utilities, but protectionism ultimately destroys what it seeks to protect. Instead, a single energy market will make sure the best companies can bring the best service and prices to every member state.
But this European-wide structure does not mean that we cede national control of energy policy. The energy mix must be decided by national governments, although we can learn from our European partners.
Last week I was in Sweden, where the government sees addressing these questions as an opportunity as well as a challenge.
They have set up a commission on oil independence which is due to report this summer.
Their aim is ambitious - to reduce the country's dependence on oil and other fossil fuels to zero by 2020, but they have already managed to cut their oil consumption by 70per cent over the past 30 years.
Full oil independence will only be achieved if industry is more efficient; the Swedes are confident that industrial and domestic heating needs can be met through new fuel sources such a bio-fuels by 2020; but the third and thirstiest sector - transport - will need a more complex approach.
However, opening a single European energy market and finding new energy sources is not the whole story.
However we manage to limit it, we will still have to import a degree of gas and oil. We need to build a strategic working relationship with Russia and its gas-producing neighbours. That means encouraging democracy and stability and entering into meaningful partnerships.
Energy security will be at the top of the agenda at the G8 summit this summer. It is crucial that we and our European partners find the right answers.
Douglas Alexander is minister for Europe.