Energy & Europe: Driving to Disaster (12/03)

When dealing with energy questions, Europeans face two uncomfortable facts. First, the price of oil has tripled since 1999; and second, Europe lacks a clear energy policy. Aside from special treaty provisions for coal and nuclear power, the European Union (EU) has hardly addressed the issues of energy sources and supply security. Yet, it already imports half its energy, and, by 2030, the figure is expected to reach 70 percent.

Coal imports overtook production in 1995. Current production in the 15 EU countries is less than half of what it was 10 years ago, and one-seventh the output of the early 1960s. Germany and Spain are running down their mines, France will stop producing in 2005, and Portugal and Belgium no longer turn out any coal at all. Only Britain’s privatized mines have a chance of competing. Poland produces more coal than the rest of the region combined, but is restructuring to prepare for EU entry. If there is any future for European coal, it’s only as a strategic reserve in times of crisis.

The popular alternative for electricity generation is natural gas. Gas power stations already produce 15 percent, and are expected to reach 40 percent by 2030. Europe currently imports 40 percent of its natural gas, mainly from Russia and Algeria. Gas is controlled by the oil companies, and its market price is linked to the price of oil.

Like the US, Europe’s major weakness is oil dependence. While it managed to improve that situation after the crises of the 1970s, imports still account for three quarters of consumption; they are expected to approach 90 percent by 2030. Since 40 percent of oil imports already come from the politically unstable Middle East, this is obviously a concern.

Beyond all this, the burning of fossil fuels – coal, oil, and gas – is perceptibly changing global climate through the emission of greenhouse gases such as carbon dioxide. To have any chance of meeting the targets established in the Kyoto treaty, the region must make drastic changes.

Uncomfortable Options

It’s not uncommon to hear the argument that the only major source of energy that doesn’t contribute to global warming is nuclear energy. Indeed, the 1957 Euratom Treaty was supposed to reduce dependence on imported oil by going nuclear. Presently, nuclear plants generate 35 percent of electricity within the EU.

But these plants are aging, and maintaining current levels of production would require building about 70 new reactors before 2025. Nevertheless, five of the eight EU countries with atomic reactors have decided to phase out nuclear energy. Finland is the only state where new stations are expected to be built in the next few years.

Due to the accidents at Three Mile Island in 1979 and Chernobyl in 1986, not to mention waste disposal problems, public support for nuclear power is virtually non-existent. In fact, over 100 non-governmental organizations don’t want the Euratom Treaty included in the new EU constitution. Many claim the treaty is biased, out of date, and undemocratic, actually requiring member states to promote nuclear power. They also criticize nuclear research grants and subsidized projects, over which the European Parliament has no jurisdiction.

With its coal industry undermined by foreign competition and nuclear energy discredited and depleted, energy self-sufficiency looks impossible. Europe will continue to rely on fossil fuel imports unless and until it develops serious alternatives. The only option is large-scale development of renewable sources – wind, solar, hydroelectric, biofuels, and geothermal.

Germany offers the most striking example of wind energy growth: over 4000 megawatts of generating capacity, more than half Europe’s total. The failure to pursue wind power in countries like Britain, which generates only about 338 megawatts, underlines the need for both government support and sensible policies. Germany’s Renewable Energy Feed-in Tariff (REFIT) system, which guarantees producers fixed prices for wind energy, is much more effective in encouraging new capacity than the British, Irish, and French models, which involve bidding to provide a fixed capacity at the lowest price.

Using renewable energy to supplant existing sources is still a possibility. But if the EU fails to quickly develop a concrete energy policy, this will play only a small and limited role in meeting Europe’s immediate needs. Such a policy would include the political will to reform the tax system, removing the hidden subsidies that support fossil and nuclear sources, and investing more in research and alternative technology development. Without this commitment, the contribution of renewables to total energy supply is likely to rise from six percent today to a mere eight percent by 2030.

Countdown to Crisis

A report by an EU consortium of researchers, "World Energy, Technology and Climate Policy Outlook", offers a grim forecast. It assessed the impact of individual energy projections, energy technology progress, and climate change indicators on the future of global energy systems. Unless research activities and policies are stepped up to cut greenhouse gases and better promote the deployment of renewable energy, the report concludes, the world will have a huge energy and environmental crisis on its hands within the next 25 years.

If current energy consumption trends and structural changes in the global economy continue, world energy consumption will double over the next 30 years. In this scenario, fossil fuels continue to dominate, still supplying almost 90 percent of total energy in 2030; oil production increases by 65 percent, remaining the number one source of energy, followed by coal. In fact, the report projects a doubling of coal production, with most growth taking place in Asia and Africa.

In Europe, natural gas is expected to be the second largest energy source, less than oil but more than coal and lignite. However, the report also indicates that European gas reserves are limited. This could lead to supply risks, since the gas needed to meet EU demands will have to be imported from the Middle East and other potentially unstable regions.

With fossil fuels continuing to dominate, the report also estimates that world carbon dioxide emissions (CO2) will increase rapidly, at a rate of about two percent a year. By 2030, emissions are expected to be more than double what they were in 1990. In Europe, emissions will rise by about 18 percent, but the US increase could be as high as 50 percent. Developing countries, which accounted for only 30 percent of world emissions in 1990, could be responsible for half or more by 2030.

The report concludes that if other energy options, particularly renewables, were implemented on a larger scale, the cost of meeting Kyoto targets could be reduced by 30 percent. Yet, it also concedes that such energy sources will still generate a very small percent of total EU supply.

Journey into Darkness

Skeptics often note that the untapped potential of renewable sources hasn’t been developed because nobody has yet figured out how to own the sun or wind. Whether that’s true or not, the West’s love affair with automobiles is certain to make a bad situation worse. The number of cars is increasing, especially in parts of Central and Eastern Europe. Unfortunately, governments seem more interested in building new highways and expanding existing road networks rather than investing in public transport or using rivers and rails.

The publication of a recent "Eurobarometer Survey" supports the view that energy is at the heart of a continental paradox. An overwhelming majority of Europeans worry about the threat that energy consumption poses to the climate. Most claim to favor renewable energy and research; yet, they don’t seriously question their own behavior. Rather, they see industry as the main culprit. Although many interviewed for the survey are aware that saving energy (through insulation and more energy-efficient devices) is important, they underestimate the role of personal transport in the equation. In short, most Europeans show little inclination to change their habits.

The "information society" and e-commerce are meanwhile putting additional strains on existing infrastructure. Energy demand has already brought power grids near the point of collapse. The energy crisis that has plagued California, plus the recent blackouts in London and across the eastern US, are portents of things to come.

As electronic gadgets spew commodity content and computers chain people to the speed of machines, electric wires are forming an ever-tightening noose. We may ultimately hang ourselves. But, at the very least, the future currently looks dark indeed.