Wednesday, October 12, 2005 - Energy a la Francaise - Energy a la Francaise

October 5, 2005; Page A20

PARIS -- For several months now, oil prices have been high and rising. Experts confirm that this upward trend will continue in the long term. The reason is simple: Demand keeps going up while reserves of oil -- a finite resource -- are not increasing commensurately. The result is all too familiar: At the slightest sign of international tension, prices skyrocket. The world economy is facing not just a simple oil shock, such as those we have seen in the past, but the advent of a new energy situation.

All industrialized countries -- some faster than others -- are becoming aware of this new reality, which strongly impacts their economies. Consumers are complaining about gas prices at the pump. Manufacturers see their production costs rising and fear for their profitability and competitiveness. And political leaders are worried about the repercussions of higher oil prices on economic activity and therefore on growth and jobs. These concerns are shared by France and the U.S. -- indeed by all the industrialized countries.

As the world's leading energy consumer, the U.S. was fortunate to have large petroleum and gas reserves on its territory and a specialized energy industry with a world-wide presence. And yet these advantages are not enough to completely satisfy its demand for petroleum products.

France, which does not have such fossil fuel reserves, should be more directly exposed to fluctuations in the price per barrel. But as President George W. Bush recently noted, France chose another path to ensure its energy independence: While the U.S. hasn't built any nuclear plants since the '70s, France has constructed 58 in that period of time. Today, nuclear energy accounts for 78% of our electricity consumption.

The choice of nuclear power dates back to the end of World War II. With insufficient fossil fuel reserves, our country very early on invested in energy alternatives. The two oil crises of the '70s convinced us to accelerate the construction of facilities to produce safe and economically profitable nuclear energy. That strategy paid off: In 30 years, France's energy independence has risen from 30% to 50%. While turning toward nuclear energy might have seemed unusual 60 years ago, I believe that it was an especially visionary choice.

The development of nuclear energy enabled us to meet several objectives: energy independence and security of supply, and competitive, stable energy prices. This nuclear option is also an economic and commercial asset for our country, whose capabilities in this cutting-edge area are world-renowned. In partnership with the French nuclear builder Areva SA and the European energy leader Electricité de France (EDF), we are building a revolutionary, safe and competitive nuclear reactor -- the EPR -- that will come on line around 2015. This new-generation reactor will allow us to take a fresh step forward in risk prevention as well as in environmental protection, since it will create less waste.

In the longer term, the ITER project, which France is hosting in Cadarache, will demonstrate -- we all hope -- the scientific validity of energy production through atomic fusion. Along with fission energy, fusion energy represents the hope for a clean, abundant source of energy for the future.

But let's be clear: Choosing to go all-nuclear isn't the only response to rising oil prices. Like nuclear power 30 years ago, renewable energies now constitute the main energy challenge in the coming decades.

That is why, at the behest of President Jacques Chirac and under the guidance of Prime Minister Dominique de Villepin, France has decided to implement an ambitious strategy to develop renewable energies. Our country is already their leading producer within the European Union. But we want to go further. To succeed, we must invest more in R&D, true to the pioneering spirit that guided us following World War II.

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What does this mean in concrete terms? France intends to develop all kinds of renewable energies: hydroelectricity and windmills at first, for which we have already established very favorable new regulations; and then renewable heat, in which we plan to make massive investments over a period of several years. And finally clean vehicles, whose research we will finance and whose marketing we will support. For renewable energies will not suffice: Energy economy is the second challenge we must face.

Clearly, this national strategy will be effective only if it is part of a European and international framework. That is the position France just defended at the last G-7 summit. In that way, we will be able to build an energy market that is more effective, better regulated and thus less volatile -- and less vulnerable to the energy cartels.

Sixty years ago, France stood in the vanguard. Today, all industrialized countries must have a similar vision in order to prepare for their children's future.

Mr. Copé is France's budget minister and government spokesman.


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