Energy Relations in Europe

Friday, October 24

Panelists
Mr. Paul Rübig, Member of the European Parliament
Mr. Christian Schönbauer, Director General, Federal Ministry of Science, Research and Economy
Mr. Ulrich Streibl, Senior Vice President, Corporate Strategy, OMV
Ms. Natalia Nosdrina, Head of Division for International Cooperation, Ministry of Energy of the Russian Federation
Mr. Kurt Bayer, Former Executive Director, EBRD

Chair
Mr. Norbert Funke, Director, Joint Vienna Institute

Summary
On October 24, 2014, the Joint Vienna Institute hosted a high-level panel discussion on “Energy Relations in Europe,” as part of a newly designed course on “Integration in Europe: European Union and Eurasian Union,” jointly organized by the Oesterreichische Nationalbank and the Austrian Federal Ministry of Finance.

Mr. Paul Rübig, Member of the European Parliament, started by noting that the timing of the event could not have been better, as European leaders reached an agreement on the 2030 climate and energy policy framework on October 23. The agreement foresees a cut in greenhouse gases by at least 40 percent by 2030 (compared to 1990), a 27 percent target for the share of renewable energy, and a 27 percent target for energy efficiency improvement. The so-called “40:27:27” target follows the “20:20:20” target for 2020. However, Mr. Rübig also acknowledged that there were a number of challenges ahead, including investment in energy infrastructure, diversification of energy supplies, and affordability of energy to consumers and industry.

Mr. Christian Schönbauer, Director General at the Austrian Federal Ministry of Science, Research and Economy, highlighted that the goals of the Austrian energy policy were in line with European policies and aimed at stable energy supplies, environmental sustainability, and affordability. He pointed out that Austria was one of the foremost producers of hydroelectric and wind energy. Mr. Schönbauer stressed that other large countries needed to follow the European example, as Europe only accounts for 12 percent of the world’s total CO2 emissions. A global reduction of emissions depended essentially on developments in other advanced economies and emerging markets.

Acknowledging the energy transition, Mr. Ulrich Streibl, Senior Vice President of OMV (an integrated international oil and gas company) argued that traditional sources of energy continue to play an important role in the energy mix in the medium-term. In particular, natural gas and oil are important stabilising pillars in our energy mixes for the next decades. Mr. Streibl also stressed that energy autarky was not an objective in itself. Europe’s security of energy supply is ensured by domestic sources, especially in the North- and Black Sea, as well as long-term relations with reliable partners, the latter being beneficial to both energy exporters and importers. For many years, OMV’s experience with its partners, including Norway and Russia, has been excellent.

Ms. Natalia Nozdrina, Head of the Division for International Cooperation Department of the Ministry of Energy of the Russian Federation, further highlighted the importance of reliable energy cooperation. She pointed out that European companies account for a significant share of foreign investments in the Russian oil and gas industry as well as the power sector. The largest part of Russian oil and gas is exported to Europe. About 53% of energy demand of the European Union is covered by import. Ms. Nozdrina emphasized the beneficial role of energy cooperation between Russia and the European economies with regard to mutual dependence on export-import deliveries. She underlined that a stable and predictable development of the energy market is one of the key conditions for energy security in Europe.

Looking critically at recent developments in Europe, Mr. Kurt Bayer, former Board Director of the European Bank for Reconstruction and Development, pointed out that Europe’s achievement of the 2020 emission target was partly due to a low-growth environment. He also argued that one flaw in the EU strategy was its focus on primary energy use instead of energy services. In his view, a strong new impetus towards a modern and sustainable EU-energy-services policy is needed. Energy policy should be better integrated into general economic policy. More investment is needed and the EU energy policy should become a focal point for the EU infrastructure policy.

The lively debate and the following question and answer session concentrated on energy ties between the EU and its major suppliers (e.g., Norway and Russia), the prospects of achieving the renewable energy target set by the EU, and the possibilities to explore shale gas in Europe. There was broad agreement on the critical role of strong cooperation between countries to achieve energy security, affordable supply and global goals, the importance of investing in infrastructure, and the relevance of innovations related to the use of renewable energy sources, in order to live in a low-carbon society and to keep our planet sustainable for future generations.

Asel Isakova, Junior Economist
Michael Huber, Consultant

Event Photos

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