Finding the Energy: Europe’s Liberals Respond to the Shift in Gas Power

At their congress in Dublin last month, the European Liberal Democrats, the ELDR, re-launched themselves under the name already used by their group in the European Parliament, the Alliance of Liberals and Democrats for Europe or ALDE.

Their President, Sir Graham Watson, said their goal was to forge ‘in the smithy of our souls the consciousness of a continent’. Their more immediate task, over a weekend in Dublin, was to decide how to fuel the smithy, or at least debate how to respond to changes in the energy market.

Commission Vice-President Siim Kallas, former Prime Minister of Estonia, urged Europe to reduce its dependence on gas as well as oil; in particular, its dependence on Russian gas. He pointed out that if a free market requires free movement, then a free energy market requires physical infrastructure, which would for example end Bulgaria’s total dependence on Russian gas.

He reminded delegates that the Commission made proposals 18 months ago, proposals which he said would be at risk if the EU budget was cut. He observed that there is always some member state thinking it can get rich by not following European principles. It was possibly a dig at British demands for a budget cut but certainly a swipe at Germany’s bilateral gas deal with Russia.

‘Do we want European policies or not?’, the Commissioner asked. The former Danish Energy Minister Lykke Friis was on hand to point out that EU energy policy has encouraged less democratic regimes in the Middle East as it tried to reduce dependence on Russia.

Britain’s former Energy Minister, Chris Huhne, observed that shale gas has halved the price of gas in the United States. The USA built its liquefied natural gas terminals to import from the Middle East but it is now converting them to export, which will weaken the market power of Russia. Shale gas, obtained by fracturing or ‘fracking’ rocks underground remains a highly controversial fuel in Europe.

Sir Graham Watson warned that the development of oil and gas networks disadvantaged electricity, including green electricity for renewable sources, such as wind power. Britain’s Deputy Prime Minister, Nick Clegg talked of ‘exciting ideas’ in green electricity, such as interconnecting Britain and Ireland so that Irish wind energy can be exported to the United Kingdom.

Echoing Commissioner Kallas’ call for safeguarding EU investment, Clegg poured scorn on the British Green MP Caroline Lucas voting with Labour and right-wing Conservatives to call for a EU budget cut. Watson made it clear that he did not think there would ever be a place for the Greens in the ALDE.

Lykke Friis stressed that in Denmark a green energy policy had become the political consensus. The country’s ‘Declaration of Energy Independence’, which she promoted when she was a minister, had cross-party support and has been continued by the new Danish government. It aims to make Denmark carbon neutral by 2020, with 70% of its energy from renewable sources, including 50% from wind.

She was equally non-partisan in drawing inspiration from America, citing the ‘Elvis principle’, that member states could start living up to existing EU energy policy with ‘a little less conversation, a little more action’. She also reminded her fellow Liberals of the wise words of Ronald Reagan, that ‘the status quo is just Latin for the mess we’re in’.

Trade Commissioner Karel De Gucht noted that the recent US Presidential election had demonstrated an almost complete indifference to the European Union. As America trades more with the emerging economies, the EU’s relationship with the land of cut-price shale gas is being diluted.

He too is having difficulties getting member states to co-operate fully with his aim of securing a comprehensive new trade agreement with the United States. He hopes for a final report from EU and US officials by the end of the year, the basis of what he called ‘an ambitious deal to avoid unnecessary problems and costs’.

De Gucht wants to end tariffs and have an open market for services, as well as eliminating ‘sub-federal’ barriers on both sides of the Atlantic. He said every member state is in favour in general but not in particular. Big battles loomed over giving the US access to the European agricultural market and to public procurement contracts.

As Commissioner Kallas prepared to do legal battle with Russia and Gazprom over separating gas supply from pipeline ownership, Commissioner De Grucht said the big picture was that liberal democracies should stick together. His quote was from Winston Churchill, ‘you can rely on the Americans to do the right thing –after they have tired everything else’.

No-one in Dublin suggested waiting to see if the Russians adopted the same approach.

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