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19.1.2.  International energy cooperation

    After the October 1973 oil crisis, the United States took the initiative of organising an international conference in Washington in February 1974, whose work culminated in the conclusion of the International Energy Agreement and in the creation of the International Energy Agency under the auspices of the Organisation for Economic Cooperation and Development (OECD). The Agreement on an International Energy Programme, signed in November, 1974, by the OECD member countries is a wide-ranging cooperation programme which seeks: to ensure, in the event of crisis, a common level of oil supply autonomy and common measures to restrict demand and share out the available oil; to establish an information system on the international oil market; to implement a long-term cooperation programme to reduce dependence on oil imports and to promote cooperation relations with producer countries and with other consumer countries.

    The International Energy Agency (IEA) was set up on November 15, 1974 by the OECD's Council. Its main tasks are to: draw up and implement a long-term cooperation programme on the development of resources and energy savings; analyse national programmes for energy conservation and the development of new energy resources; improve the information system on oil and natural gas markets; create a statistics centre for energy; introduce a mechanism to restrict demand and share out oil resources in the event of supply difficulties. The European Commission has observer status within the Agency and coordinates, on the one hand, the positions of the EU Member States and, on the other, the action of the IEA with that of the EU, particularly in the areas where there is Union competence such as that of the commercial policy. The introduction of a contingency scheme by the IEA, on 17 January 1991, together with the commencement of Allied hostilities against Iraq - in compliance with UN Resolutions and under US command - after Kuwait's invasion, was instrumental in calming the oil markets, which remained stable until the end of the conflict.

    The 1973 crisis gave rise to several initiatives seeking to establish "dialogue" between oil producer and consumer countries. These have not borne much fruit. There are occasional meetings between the European Commission and the secretariats of the Organisation of Petroleum Exporting Countries (OPEC) and the Organisation of Arab Petroleum Exporting Countries (OAPEC), which discuss oil trade, the situation on the international energy market and the interest of all, consumers and producers alike, in avoiding too large price fluctuations. This dialogue is certainly useful, but cannot in itself lay the foundation for cooperation between the European Union and energy producing countries, notably the Gulf countries where the World's most important hydrocarbon reserves are located.

    Pan-European cooperation in the energy field is assisted by the Instrument for Pre-Accession Assistance (IPA) and by the European Neighbourhood and Partnership Instrument (ENPI) for candidate and other neighbouring countries [see sections 25.2 and 25.4]. Technical assistance programmes in the energy field cover the drafting and planning of energy policy in these countries, energy supply and demand, tariff system and pricing, energy savings, the interconnection of East-West networks, training, environmental protection, the reshaping of the energy industry and nuclear safety. Agreements between the European Atomic Energy Community (Euratom) and the Russian Federation in the field of nuclear safety and in the field of controlled nuclear fusion provide for cooperation between the parties concerning reactor safety research, radiation protection, nuclear waste management, decommissioning, decontamination and dismantling of nuclear installations, and research and development on accountancy and control of nuclear material [Agreement on nuclear fusion, Agreement on nuclear safety and Decision 2001/761]. A multilateral environmental programme and a protocol establish a coherent legal framework for implementing nuclear-related projects in the Russian Federation [Framework Agreement, Protocol and Decision 2003/462].

    The European Energy Charter attempts to put some order in energy supply and demand conditions in Europe. It lays down the principles, the objectives and ways of achieving pan-European cooperation in the field of energy. Signed in the Hague on December 17, 1991 by almost all European countries as well as by the European Community [Decision 98/181], Canada, the United States, and Japan, the Charter is in fact a code of good practice. Its interest is to give the first tangible demonstration of a consensus based upon solidarity and complementarity, in particular between the countries of Western Europe - with their know-how and advanced technologies - and those of Central and Eastern Europe, including the countries of the former Soviet Union, which have relatively abundant energy resources.

    The Charter pursues the following operational objectives: expansion of trade, especially through free market operation, free access to resources and the development of infrastructure; cooperation and coordination of energy policies; and the optimal use of energy and protection of the environment. These objectives should be attained through the implementation of joint measures by the signatory countries in six specific priority fields: access to resources; use of resources; investment arrangements; liberalisation of trade; harmonisation of technical specifications and safety rules; research and technological development and innovation.

    The implementation of the Charter is provided by the European Energy Charter Treaty, signed in Lisbon on 17 December 1994 [Final Act of the Conference, Annex 1, Annex 3 and Decision 94/998, Amendment to the Treaty, Decision 98/537 and Decision 2001/595]. This Treaty is designed to develop new relations between the main European countries, most of the independent States of the former Soviet Union and Central and Eastern Europe, Canada, the United States and Japan concerning the transit of energy products between east and west, trade, investment and energy cooperation. The European Commission assists the Secretariat of the Conference, which is established in Brussels. The practical implication of the Energy Charter is the diversification of the supplies of European Union countries in oil and natural gas and, hence, their decreasing dependence from Middle Eastern sources.

    Russia has signed but not ratified the Energy Charter Treaty and the Partnership and Cooperation Agreement between the EU and Russia (signed in 1994 and in force since 1997) has not solved the energy problems between the two parties [see section 25.4]. Therefore an energy dialogue was deemed necessary to resolve energy questions. Since its launch in 2000, the energy dialogue between the European Union and Russia has resolved a number of difficulties between the two parties. It has contributed to the smooth operation of the internal market, sustainable development with the ratification by the Russian Federation of the Kyoto Protocol, and the security of energy supply. This exchange has also resolved important questions such as the preservation of long-term supply contracts and the abolition of measures which are contrary to European competition rules. European and Russian companies investing in the energy sector have benefited from this dialogue, which thus helps the creation of a pan-European energy market.

    Οn 25 October 2005, the EU and eight partners in south-east Europe (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Former Yugoslav Republic of Macedonia, Romania, Serbia and Montenegro and UNMIK, on behalf of Kosovo) signed the Energy Community Treaty in order to create the legal framework for an integrated energy market [Decision 2006/500 and Treaty]. The main objectives of this treaty are to create: a stable market framework capable of attracting investment in order to ensure a stable and continuous energy supply; and a single regulatory space for trade in network energy (electricity and gas). As a result of this treaty, the EU internal market for energy will be extended into the Balkan peninsula as a whole. This means that the relevant acquis communautaire on energy, environment and competition will be implemented there. Market opening, investment guarantees and firm regulatory control of the energy sectors will also be enhanced.

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