EU says high oil prices and nuclear power to stay
EUobserver.com
EUOBSERVER / STRASBOURG - Brussels predicts that oil prices will stay high in the foreseeable future and that the EU will need to build more nuclear reactors, while pressing for extra transparency on oil markets as part of new measures to curb inflation.
"There are no miracles that we can use now to decrease the prices below the current level", energy commissioner Andris Piebalgs said on Tuesday (6 September).
He explained that instability in the Middle East and the impact of hurricane Katrina helped push levels up from $45 a barrel at the start of the year to some $70 a barrel today, causing alarm for EU motorists as petrol prices shot up across the union.
But he warned that the EU must focus on combating the long-term problem of demand growth outracing supply, with Chinese consumption alone soaring by 65 percent in the past three years.
The European Commission plans to accelerate the implementation of energy-saving and renewable energy source directives in the coming months to help stem European demand for fossil fuels.
But he warned that new coal and nuclear energy plants might also have to be built to help deal with the global problem.
"I expect investments in the nuclear sector in Europe, and in the rest of the world, will grow", the commissioner said.
Consumers' pockets suffer
Both the commission and MEPs agree that rising oil prices pose a risk to European economic growth and to ideals such as the free movement of persons, with socialist group leader Martin Schulz saying there is a "social risk" of limited labour market mobility for less well-off EU citizens under the status quo.
"Oil companies are bent on maximising profit in this situation, we will try to make them understand their responsibility in this regard", Mr Schulz said on Tuesday.
But Mr Piebalgs pointed out that the recent spike in oil prices has not harmed the global economy or the European economy as much as was originally feared, with oil-rich countries stepping up purchasing in oil-consuming regions.
The commissioner also sought to alleviate consumers' fears by highlighting that the International Energy Agency's (IEA) decision to release some 60 million barrels of oil reserves to the US has dampened down markets for now.
"There could be surprises, but in the current situation I don't expect much more in the way of price hikes", he said.
Meanwhile, a spokeswoman for British Petroleum told EUobserver that while the firm's third quarter 2005 profit outlook is "very good", the firm will spread the wealth back to shareholders and use it for investments in new energy-sourcing projects.
Shell, one of the world's largest petrol retailers, also stood up for industry by pointing out that the impact on consumers has been aggravated by government taxation policies around Europe, claiming that almost 80 percent of UK petrol prices is made up of excise duty.
Veil to be lifted on oil markets
One of the commission's more creative plans for stemming speculative price spikes in the oil markets is to set up a new oil and gas market observatory unit in Brussels, which will report on EU oil stocks in twice monthly bulletins starting "as soon as possible".
"The lack of transparency fuels speculation", Mr Piebalgs explained.
Brussels is also keen to rope in the remaining eight member states, who are not currently members of the IEA.
IEA members are obliged to keep stocks of at least 90 days' worth of their normal consumption for emergency purposes as in the hurricane Katrina case.
EUOBSERVER / STRASBOURG - Brussels predicts that oil prices will stay high in the foreseeable future and that the EU will need to build more nuclear reactors, while pressing for extra transparency on oil markets as part of new measures to curb inflation.
"There are no miracles that we can use now to decrease the prices below the current level", energy commissioner Andris Piebalgs said on Tuesday (6 September).
He explained that instability in the Middle East and the impact of hurricane Katrina helped push levels up from $45 a barrel at the start of the year to some $70 a barrel today, causing alarm for EU motorists as petrol prices shot up across the union.
But he warned that the EU must focus on combating the long-term problem of demand growth outracing supply, with Chinese consumption alone soaring by 65 percent in the past three years.
The European Commission plans to accelerate the implementation of energy-saving and renewable energy source directives in the coming months to help stem European demand for fossil fuels.
But he warned that new coal and nuclear energy plants might also have to be built to help deal with the global problem.
"I expect investments in the nuclear sector in Europe, and in the rest of the world, will grow", the commissioner said.
Consumers' pockets suffer
Both the commission and MEPs agree that rising oil prices pose a risk to European economic growth and to ideals such as the free movement of persons, with socialist group leader Martin Schulz saying there is a "social risk" of limited labour market mobility for less well-off EU citizens under the status quo.
"Oil companies are bent on maximising profit in this situation, we will try to make them understand their responsibility in this regard", Mr Schulz said on Tuesday.
But Mr Piebalgs pointed out that the recent spike in oil prices has not harmed the global economy or the European economy as much as was originally feared, with oil-rich countries stepping up purchasing in oil-consuming regions.
The commissioner also sought to alleviate consumers' fears by highlighting that the International Energy Agency's (IEA) decision to release some 60 million barrels of oil reserves to the US has dampened down markets for now.
"There could be surprises, but in the current situation I don't expect much more in the way of price hikes", he said.
Meanwhile, a spokeswoman for British Petroleum told EUobserver that while the firm's third quarter 2005 profit outlook is "very good", the firm will spread the wealth back to shareholders and use it for investments in new energy-sourcing projects.
Shell, one of the world's largest petrol retailers, also stood up for industry by pointing out that the impact on consumers has been aggravated by government taxation policies around Europe, claiming that almost 80 percent of UK petrol prices is made up of excise duty.
Veil to be lifted on oil markets
One of the commission's more creative plans for stemming speculative price spikes in the oil markets is to set up a new oil and gas market observatory unit in Brussels, which will report on EU oil stocks in twice monthly bulletins starting "as soon as possible".
"The lack of transparency fuels speculation", Mr Piebalgs explained.
Brussels is also keen to rope in the remaining eight member states, who are not currently members of the IEA.
IEA members are obliged to keep stocks of at least 90 days' worth of their normal consumption for emergency purposes as in the hurricane Katrina case.
posted by Marcel at 2:28 AM
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