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The Warsaw Voice » Business » June 3, 2014
Central Europe Energy Partners
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Energy for Europe: Challenges and Solutions
June 3, 2014   
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Political tensions in Central Europe have visibly influenced the attitudes of EU member states and the leaders of the bloc’s institutions towards energy security. The issue has been discussed for quite some time, but now it seems to be moving towards long-term decisions. The challenges are known and complex solutions need to be worked out.

Polish Prime Minister Donald Tusk’s proposal for a European Energy Union is a clear sign of that process being treated with due urgency. In my opinion, as the head of a major oil company, this is one of the most important political statements that has ever been made publicly on an energy strategy for Europe. It identifies existing problems and suggests ways to resolve them.

Prime Minister Tusk has announced a six-point program for debate and the future implementation of the agreed agenda in order to deal with all the major challenges in securing secure and stable energy supplies for Europe. I am very pleased to note that the framework outlined by Mr. Tusk refers to a number of vital points presented at international conferences and meetings co-organized by Central Europe Energy Partners (CEEP), as well as reflecting CEEP members’ views and needs, which have been signaled on a number of occasions. We are pleased that a major political figure in our region has considered the views and ideas of industry in outlining the problem, and suggested ways of successfully resolving them. Leveraging the purchasing power of the EU would obviously contribute towards better, more stable relations between suppliers and consumers of gas and oil, thus stabilizing the international market. This is particularly important for gas supplies to Europe, which are dependent on a small number of suppliers and a small number of gas transmission pipelines.

I understand that a political element is usually part of the overall picture of pricing and supplying gas to end users. Realistically, it will always be a factor to be reckoned with, but with strong, professionally induced stability on the market, price and supply volatility will be reduced. We all know full well that predictability and transparency serve the market and enhance energy security, while fluctuating, unpredictable movements damage it.

Using the collective purchasing power of European member states will certainly help stabilize the price structure and bring much needed equilibrium to the market. Solidarity between EU countries should be the name of the game in negotiating gas supplies. Poland will soon be celebrating the 25th anniversary of the dismantling of the communist system by the Polish Solidarity movement. Solidarity means power; it promotes reason and responsibility. Let’s use that experience for our future needs.

European investment in the energy sector should not only enhance energy security, but also turn a united Europe into a more competitive and modern manufacturing area. Energy prices in Europe are much higher than they should be. If we all start working together towards more affordable energy, prices will come down, especially when all roads are explored and common solutions are found. The energy industry is certainly eager and willing to take part in a modernization process regarding both energy production and fuel supplies, including renewable energy resources.

The basic condition for that process to be successful is to set realistic targets for CO2 emission reductions, in strong correlation with European industrial competitiveness, economic growth and the creation of new jobs. I may be slightly too optimistic, but I think that we have arrived at the right time to really talk business about these strategic and other vital issues.

This is particularly important within the context of CO2 emission reduction targets introduced by the EU Commission and geared to 2020. A majority of EU countries will fulfill them, including Poland. It is with respect to the longer-term perspective up to 2030 that European solidarity is needed in this very area. I don’t think that any company or industrial sector, or even a country, would be willing to flout the emission targets owing to some lack of internal procedures, or in order to simply save on the investment costs related to the best available CO2 reduction technologies. The stakes are too high: keeping jobs, producing GDP growth, and making sure that energy supplies are both secure and affordable.

Indigenous energy sources should remain an important component of the European energy-mix, for as long as it takes for renewable energy to become competitive and abundant.

Shale gas prospecting and extraction is another area in which European solidarity should be seen as universally binding. This requires new technology, and so far relatively little experience has been garnered in Europe on using it on a large scale. However, that should not mean rigid legal limits, which would effectively kill the economic attractiveness of this new source of gas supply. We can expect the U.S. authorities to be more open to the idea of not only selling their LNG to Europe, but also of offering the kind of prices prevailing in the EU. This will obviously help diversify the sources of supply, but will not solve the European gas problem. We have to join the shale gas revolution. The sooner we do it, the more impact it will have on the European gas balance, the security of supplies and overall economic growth.

Donald Tusk’s idea of a European Energy Union is both timely and important. It should trigger a flow of political and business ideas. I hope that we will progress quickly and effectively towards a united energy system in Europe that will combine the best policy solutions and industry’s experience. When that happens, it will send a strong signal globally that having a stable and sustainable energy supply system benefits everybody: the suppliers, the users, and the world at large.

Central Europe Energy Partners (CEEP) is an association formed by a group of Polish companies from the energy and fuel sectors that aims to facilitate integration in the energy sector in Central Europe and strengthen the position of this sector in the European Union. The association was established on May 4, 2010 in Brussels. This is the first industry-specific organization from Central Europe that has a permanent representation to the European Union. Currently CEEP consists of 22 companies from the Czech Republic, Lithuania, Poland, Romania and Slovakia, employing more than 300,000 people in total and with a combined annual turnover of 42 billion euros. In June 2014, Central Europe Energy Partners will celebrate its fourth birthday. As the first regional association representing the Central European energy sector and its companies (coal, oil, renewables, grids, etc.), its overriding goal is to support the integration of Central Europe’s energy sector within the framework of a common EU energy and security policy.
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