Verbatim report of proceedings

Wednesday, 28 September 2005 - Strasbourg

23. Oil

  President. The next item is the Council and Commission statements on oil price rises and dependence on oil.

  Douglas Alexander, President-in-Office of the Council. Mr President, thank you for this opportunity to address Parliament today on this important and timely issue.

The developments we have seen in the oil market over the past few years raise both important issues and, at present, a number of key issues for the European Union.

Sustained high oil prices represent a significant risk to global economic growth and are a particularly damaging aspect for poorer countries. Access to reliable and affordable supplies of oil is vital for the European Union and the wider global economy. In 2003, oil products comprised 43% of total energy consumption in the European Union.

The importance of this issue was highlighted by the recent informal Ecofin meeting in Manchester, in the United Kingdom, which, when discussing the current economic situation, focused in particular on the impact of oil prices.

However, as has been well documented elsewhere, the current situation is different from previous periods of high oil prices. In real terms, current price levels are lower than the peaks seen in the late 1970s and early 1980s, and the pace of the rise in prices has been slower. This reflects the fact that very strong, and unexpected, global oil demand growth, rather than supply shock, has been the driving force behind higher prices. Because of this increased demand, global production and refining capacity has become very tight.

So what can be done to help improve present market conditions? Oil is a global issue and can only be solved by global action. Both oil producing and oil consuming nations have shared interests and responsibilities in delivering more stable oil prices that enable sustainable economic growth.

Consumer and producer countries and international organisations need to work together to help make international oil markets function more effectively, both on the demand and on the supply side. Open, transparent and competitive oil prices and oil markets are the most effective mechanism for delivering reliable oil supplies at those more stable prices.

The reserves are there to meet future demand. The world is not yet running out of oil or gas any time soon. However, action is needed to ensure that reserves are turned into actual supplies. Greater investment is needed in both production and refining capability. A climate more conducive to investment, with open markets, transparent business practices and stable regulatory frameworks, is required throughout the international oil sector.

Energy conservation and efficiency, and technology and innovation are also important and have a role to play. At Gleneagles, G8 Heads of Government published a plan of action on these issues in addressing climate change, but progress in these areas can also do much to enhance energy security.

Ultimately, market mechanisms will ration the remaining supplies of oil and provide an incentive for a shift to alternative sources of energy, but appropriate action can be taken in support of that and to promote energy efficiency.

Energy efficiency is rightly at the top of the European Union energy policy agenda at present. Improving energy efficiency within the European Union is the most cost-effective means of simultaneously reducing energy demand – to promote security of supply and improve the competitiveness of European business – and reducing greenhouse gas emissions. Much has already been achieved by the European Union, it is right to acknowledge that in this sphere, with a range of regulatory and voluntary measures now in place, but it is clear that whilst significant potential for further improvements in energy efficiency remains, there are also barriers to now realising that potential.

That is why Member States have welcomed the high priority that Commissioner Piebalgs has attached to making further progress and the recent publication of the Green Paper on energy efficiency, entitled 'Doing More with Less'. That Green Paper is currently stimulating considerable and – I would suggest – welcome discussion and debate as to how barriers can be overcome in order to deliver significant energy savings by 2020. It is also why the United Kingdom Presidency will strive to secure a second reading agreement between Council and Parliament on the Energy End-Use Efficiency Directive, which will set a framework and targets for energy efficiency savings in the European Union over the coming years.

The European Union has introduced the Biofuels Directive to encourage the development of alternative renewable fuels for transport. Member States have agreed to set indicative targets for biofuels sales in 2005 and for 2010 to help reduce European Union dependence on fossil fuels. Member States across the Union have introduced policies such as reductions in fuel duty and these have stimulated rapidly growing biofuels sales.

Fuel cells and hydrogen offer significant potential in the longer term, with many considering hydrogen fuel cells to be the ultimate replacement for oil and the internal combustion engine. The European Hydrogen and Fuel Cell Technology Platform has carried out sterling and important work in preparing a strategic research agenda and a deployment strategy for fuel cells and hydrogen. This work will, in turn, influence the Commission in determining priorities for funding under the Seventh Framework Programme. The Commission is currently soliciting industry support for a joint technology initiative in this area to allow major hydrogen demonstration projects to be undertaken here within the European Union.

Greater market transparency is also needed. Improved data on global oil demand, supply and stocks is essential for better informed market decisions. To this end, European Union members are contributing data to the Joint Oil Data Initiative, due to be launched in Riyadh later this year. The European Commission is also currently working on the improvement of data, notably for oil stocks for Europe.

Lack of transparency over the world’s oil reserves and plans for their development also undermine stability and cause uncertainty. Greater clarity and consistency is needed in worldwide reporting of reserves.

Increased dialogue and understanding between consumers and producers is, frankly, also important. The European Union now has a formal dialogue with OPEC, enabling an exchange of views on energy issues of common interest. The first meeting in June agreed four themes for enhancing cooperation between the European Union and OPEC. These were: oil market developments, in both the short and medium-to-long terms; energy policies; energy technologies; and energy-related multilateral issues.

Discussions on these themes will be developed through workshops and other meetings, helping to inform future dialogue meetings. In the first instance, a round table on oil market developments will take place on 21 November, concentrating on investment needs along the oil supply chain.

The European Union is also currently engaged in dialogues with Norway, Russia, China and India. The energy dialogue with Russia is a good example of effective cooperation between the European Union and the Russian Federation on an issue of great importance to their overall relationship. The basic idea behind the dialogue is a simple balancing of interests: Russia requires European investment to develop its energy resources, whilst Europe needs secure, long-term access to Russian oil and gas.

Whilst given their rapidly growing need for oil and gas supplies to fuel growth, it is crucial for the European Union, in achieving both its energy security and climate change objectives, that we engage in constructive dialogue and practical cooperation with the emerging economies of both China and India.

Finally, I should also say something today about the response to the impact of Hurricane Katrina on the oil market, and the part played in this by the European Union.

The International Energy Agency called on its member states to release 2 million barrels of oil a day over 30 days. Although it is many years since the International Energy Agency’s response measures have been tested, the organisation was able very quickly to reach a view that the disruption to the world markets was large enough to justify releasing stocks, and to reach agreement with its member states that stocks should be released.

The IEA proceeds by unanimity. This agreement was a remarkable achievement and a tribute to all those concerned. It demonstrates the merits of the IEA’s multilateral approach and the need for such an approach when dealing with the global oil market of today.

Not all European Union Member States are members of the IEA. However, the EU Oil Supply Group met to allow all Member States to review their intended response and give those who are not members of the IEA an opportunity to contribute to that broader discussion.

The IEA Governing Board, at its meeting on 15 September, reviewed the contributions of its member states to the release of stocks. It also decided that no further action was immediately necessary and that the position could be reviewed again at the end of this month or in early October to see if any further action is needed.

The release of stocks has improved the supply situation and had a calming effect on the market and on prices. It was clearly the right thing to do, and done to the right timetable. EU Member States, as well as taking part in the release of stocks, were able to increase gasoline exports to the United States, while ensuring that European Union markets remained supplied without any domestic shortages.

Given the current climate, this debate is extremely timely. The European Union is already making an important contribution to improving conditions in the oil market, both in the short and medium-to-long terms, but there is a range of challenges ahead. I would now take the opportunity to invite others to contribute their thoughts to that future work.

(Applause)

  Andris Piebalgs, Member of the Commission. Mr President, the European Commission is highly concerned about the current situation in the oil market, characterised by a strong rise in prices. The underlying cause for these high prices is the increasingly tight balance between supply and demand, mainly due to a strong growth in the demand for oil over the last years, particularly in the United States and China, and, as a result, the current significant lack of spare crude production and refining capacities. In fact, in 2004, there was the largest worldwide increase in oil demand ever. In such circumstances – where there is limited spare capacity – specific events, such as the war in Iraq and Hurricane Katrina, fuel speculation, pushing prices ever higher.

Because these high prices are beginning to have a significant negative impact on the wellbeing of our citizens, particularly the most vulnerable, and upon our economy, the Commission as well as the Member States must focus its efforts on this challenge. Whilst, of course, the Commission alone cannot solve this problem, I believe that it can make a significant contribution towards bringing prices to more reasonable levels. This is essential for EU citizens, but also for the vulnerable populations in developing countries for whom the impact is ever more devastating.

Following in-depth debates within the College and with the full support of my colleagues, and in particular President Barroso, I have recently presented a five-point plan of measures that the Commission is already taking, and which will now be accelerated to deal with this challenge.

Our first action must be to save energy and to reduce demand. Since I took office I have made this my first priority. The Commission has already adopted a Green Paper on Energy Efficiency in June 2005, which identifies the potential for Europe to save as much as 20% of its existing energy use in a cost-effective manner. Existing legislation, when fully implemented, could achieve some 10% energy savings. The Commission is therefore taking measures to accelerate a European Action Plan on energy efficiency which will follow up the Green Paper with a series of concrete measures to achieve the 20% potential; increasing pressure for the full and rapid implementation of the new Buildings Directive, and pushing strongly for an agreement on the proposal for an Energy Services Directive.

However, for Europe alone to save energy will not provide an answer. The real challenge is to use the good example developed in Europe to push for energy policies abroad that also focus on constraining demand rather than simply increasing the supply of oil and gas. In this context, the European example can illustrate how increased energy efficiency can reduce production costs. I am making this my priority in my bilateral contacts with other major energy-consuming nations and through the International Energy Agency. At the same time, we are sensitive to the specific situation of the heavily oil-dependent and vulnerable developing countries.

Our second action must be to increase Europe's use of alternative forms of energy. The most logical response to high oil prices is to switch to using alternative, competitive and, wherever possible, more environmentally friendly energy sources. For instance, the energy potential of biomass in the EU needs to be developed. A Biomass Action Plan will be tabled before the end of the year. We should also boost research on wind, wave and solar energy, hydrogen – in particular with respect to transport – and on clean coal and carbon sequestration, and I shall be arguing for proper funding of this in the Seventh Framework Programme. The proper implementation of the Biofuels Directive can also be fruitful in this sense. Finally, before the end of 2005, the Commission will present a communication on financial support schemes for renewable energy sources. Furthermore, we should work actively to build global alliances to explore more viable use of renewable energy sources, especially in the developing world.

Thirdly, we must increase the transparency and predictability of the oil markets. The lack of transparency on world oil markets facilitates speculation and inhibits investment in the oil sector. The Commission will pursue several actions to address this situation, such as accelerating the creation of a European Energy Market Observation System within the Commission. The aim of this observation system would be to provide reliable information to facilitate investments of private operators in the energy sector, as well as to improve decision-taking by policy makers. The Commission will also speed up measures to make its services able to publish data on the level of European oil stocks on a more regular basis.

Fourthly, we must increase the supply of oil and gas. Whilst priority must be given to reducing demand and switching from oil, it would be wrong not to recognise the fact that the world will need more oil and more refining capacity. To this end, the Commission will strengthen producer-consumer dialogue with oil-producing countries, including OPEC. This dialogue was already initiated this spring and on Sunday, 18 September, I met the President of the OPEC Conference, Mr Sheikh Fahad al Sabah, in Vienna. I conveyed to him our concerns about the current oil situation, as well as the expected cooperation from OPEC.

In this respect, let me inform you that OPEC has committed to help to stabilise the international oil market and to contribute to bringing oil prices back to sustainable levels. In that meeting OPEC emphasised the need for investment along the entire oil-supply chain and, in particular, it pointed out the insufficient refining capacity in the oil market. OPEC also declared that it is looking forward to getting more opportunities to invest in the European oil downstream sector. On the Commission side, we conveyed to OPEC our concerns about the fact that current insufficient spare capacity contributes to facilitating speculative movements on the international level and creates additional pressure on the oil market.

Other dialogues with important oil-producing countries – like Russia, Norway and the Persian Gulf countries – with the oil and gas industry and with the main oil-consuming countries in the world – like China, India and the United States – will also be continued. A 'China-EU Action Plan on energy efficiency and renewable energies' has recently been set up.

Finally, I will be meeting shortly with executives from the major oil companies, as I consider it very important that oil companies behave in the most responsible manner given this situation. In particular, I will insist on the need for more investment by them, and to determine which additional measures can be taken to remove bottlenecks preventing further investment, particularly in refining capacity.

Fifthly, we must react effectively to emergency situations with respect to oil stocks. In this context, the Commission has supported the proposal of the International Energy Agency on 2 September for increasing oil supply by 2 million barrels per day over a period of 30 days. While most of this international collective effort will initially consist of releasing security oil stocks in the international market, the Commission strongly advocates encouraging energy-saving behaviour, which may lead, if needed, to the use of demand restriction measures by Member States if further actions are required. This is particularly true if the loss in supply is finally expected to persist for several months.

As you may know, under EU law, all Member States must keep emergency oil stocks equivalent to 90 days of normal consumption, to be used in the event of short-term physical supply disruptions. While the EU has security oil stocks, it has never used them since it has no legal means to do so. Europe needs to play its own role, as not all EU Member States are members of the International Energy Agency.

In this respect, the Commission has already started convening the Community's Oil Supply Group on a regular basis in order to discuss oil prices, the emergency measures taken by Member States and more efficient ways of coordinating emergency measures at Community level.

Recent events show the clear need for a mechanism that assists in coordinating the use of oil stocks in the European Union. The Commission is now considering how best this can be done, and will discuss this with all stakeholders at a new Fossil Fuel Forum I have established, that will meet for the first time in Berlin in October. I should note that in developing such a proposal I shall pay careful attention to the view taken by the European Parliament on the previous Commission proposal on this matter.

As a final comment, I should note that the Commission does not believe that the best reaction to high oil prices is lowering taxes to compensate. This only encourages consumers to continue to consume. The Ministers at the last informal Ecofin meeting have clearly agreed that distortionary fiscal and other policy interventions that prevent the necessary adjustment should be avoided. It is a fact that uncoordinated fiscal reductions can have a distorting effect on competition in the internal market.

In conclusion, the Commission has been very active in proposing measures for remedying the situation. It will be a success only if all concerned – European institutions, industry, third countries and international organisations – work together. I am determined, therefore, to use the balanced energy policy model developed in Europe as a model for more international change, and to demonstrate our commitment to helping vulnerable populations both in the EU and in developing countries.

(Applause)

  Giles Chichester, on behalf of the PPE-DE Group. – Mr President, Minister, Commissioner, I would like to start by commending the Commissioner for his measured approach to this situation and to express in general terms support for the approach he is taking. Let us not over-react in haste to a situation that is changing as we speak; prices are moderating to some extent and we should let the market work.

If there are problems that should be specifically addressed, for example if there are concerns over the poor and vulnerable and disadvantaged, then we should use alternative social measures to assist them and not fall for the short-term fix of cutting tax. The fundamentals of our situation remain unchanged: the EU is heavily dependent on oil and heavily dependent on imports of oil. We should seek to reduce that dependency through measures of efficiency, conservation, substitution and new technologies.

There is an important principle that taxes should remain set by Member States. This should not be surrendered in favour of the ephemera of an EU-wide tax system. It is also important to remember that in the road transport sector by far the largest element of the price of fuel is taxation. Therefore, to those who are concerned about the windfall profits of oil companies, I would say perhaps we should be more concerned about the windfall profits of finance ministers or the tax man.

Finally, I wonder whether in addition to looking at the transport sector and roads, we should be thinking again about the aviation sector, to see whether we could find international agreement on achieving efficiencies and conservation of fuel in that sector. At the moment it is by its very nature untaxed.

  Hannes Swoboda, on behalf of the PSE Group. – (DE) Mr President, I should like to begin my short speech by emphasising that we hold Commissioner Piebalgs in very high regard on account of his efficiency and commitment in driving energy policy forward. I am very pleased that he has supported and emphasised that again in recent days, and also that the Presidency has made a number of commitments here on the issue of energy policy.

Nevertheless, from the point of view of our Group, the words of the Commission or Commission President on this subject have been rather inadequate, for, as Mr Alexander explained, these markets – if one can even call them that – are very lacking in transparency. On the other hand, the EU must speak in a clear political language in all fields – from foreign policy to transport policy, from agricultural policy to trade policy. This is also – not exclusively, of course – particularly applicable to energy policy.

I warmly welcome the Commissioner’s statement today, as it goes a little further than our previous discussions. He said the same thing this morning in committee. On the subject of the oil companies, however – I do not envy them or their shareholders their large profits – I do believe that greater socio-political responsibility for our common society and for the future of the companies themselves is needed. It must be recognised, however, that only a small proportion of these profits can be used for increasing investment for their own benefit, for example in the mixing of biofuels, as is now the case in some countries, and also, of course, in research and development in the field of alternative energies.

The Commissioner said this morning that he is aware that what has been spent up to now is only peanuts. I hope that, following the dialogue that you announced here, this will be at least a few more peanuts. If you remain Commissioner even longer, there may even, over time, be enough for a cake, an energy cake, which we can offer the European public. I wish the Commissioner good luck and a great deal of strength, and I ask him to tell the executives of the major oil companies that Parliament is expecting them to do something for our common society.

  Fiona Hall, on behalf of the ALDE Group. – Mr President, I welcome the emphasis that has been given this afternoon to the demand aspects of the oil problem. It would be easier for us to focus on the supply side and the difficulties caused by Hurricane Katrina, but if we did that we would just be applying a sticking plaster, when what we really need is major surgery.

At the bottom of the problem is Europe's over-dependence on oil. With a third of EU oil being imported from Russia and a quarter from the Middle East – and those proportions are rising – we face a structural problem which goes far beyond any short-term crisis. The simple fact is that we have to cut oil consumption: really cut it, not just talk about cutting it, and we have talked about it a great deal in the context of curbing CO2 emissions. But there is still a huge gap between the grand rhetoric about using less oil and the amount of real practical action taking place on the ground.

I have two specific requests for the Council and Commission today. It is welcome news indeed that the UK Presidency is committed to getting an agreement before the end of December on the energy efficiency and energy services directive, but will the Minister assure us today that this will be a directive with big teeth; one which makes serious, binding commitments on energy reduction; one which sets a framework for energy efficiency and stimulates a rapid growth in energy efficiency services across Europe? That is the sort of commitment we need if we are going to tackle the demand side of oil dependency, rather than just talk about it.

Secondly to the Commission: will the Commission commit to engaging in joined-up thinking on the issues of alternatives to oil? I welcome the forthcoming strategies which Mr Piebalgs mentioned. I hope that these will be coming not just from the Energy Commissioner, who we know is deeply committed to promoting energy saving and renewables. I hope that there will be wide and integrated Commission strategies to stimulate European action across the board, bringing together policy initiatives on transport, industry, taxation and agriculture. In many cases we have the technology, we even have a successful pilot project somewhere in the EU, but what we do not have is the means to roll out the technology and make it mainstream.

In my own region we have the beginnings of a successful bio-diesel industry in the Tees Valley. Very high-yield oil seed rape grows right next to an existing petrochemical industry. We already have the start of a 'green route' of filling stations supplying 5% biodiesel, but there is not yet the infrastructure, the capacity, or the tax regime to roll out that biodiesel programme everywhere. Biodiesel is just one case where the talking has to stop. I am afraid oil demand will not go down unless there is more concrete structural action on both renewables and energy efficiency.

  Claude Turmes, on behalf of the Verts/ALE Group. – Mr President, let me first thank the Commissioner for setting the right priorities. We live in a world where there will be 150 million cars in China in 2015, whereas today there are only 6 million. We have to stop allowing two-ton monsters to transport people who weigh 80 kilograms. So long as we are not serious about efficiency, especially in the transport sector, there will be no answer to oil or to climate change.

In its resolution tomorrow, Parliament will call for Europe to become the most energy-efficient and least oil-dependent economy by 2020. This is a huge opportunity for environment policy and for employment policy. For every euro we spend to heat a house with oil, we send money outside Europe instead of investing in insulation and in jobs in Europe.

As happy as I am with the Commissioner's proposals, as scandalised as I am about the Barroso Commission as a whole, it is ridiculous to come up with a communication on oil without a single sentence on transport, when we all know that transport accounts for 70% of oil consumption in Europe. Therefore my question to you, Commissioner, is: when will the Commission come up with a plan under which Mr Barrot, Mr Kovács and Mr Verheugen take on their responsibilities? It is not you alone who have to do so.

My final question is to the UK Presidency. You did not mention the directive on road tolls for lorries. That is on the table. So if the Council wants to produce not only words but also action, why does the UK Presidency not press for an agreement on road tolls based on the Swiss model?

  Umberto Guidoni, on behalf of the GUE/NGL Group. – (IT) Mr President, Commissioner, ladies and gentlemen, the problem we have to face is guaranteeing energy supplies to meet the essential requirements of our modern society, while at the same time ensuring a really low environmental impact and reducing public health risks.

The only answer is to initiate change in order to bring the oil age to an end. Even though there are no miracle cures, we have two options on which we must act: energy efficiency and renewables. That is the only way in which Europe will be able to guarantee immediate answers both to the supply crisis with its high prices and to the diversification of energy supplies, to reduce our dependency on foreign oil.

For the planet, that might mean reducing the tensions that lie at the root of many conflicts. We have reached a point where our energy system has become too costly compared with its benefits: not only in financial terms – USD 100 a barrel now seems imminent – but also in terms of environmental damage, health risks and the burden of a military and logistical apparatus to guarantee control of production areas and the security of transport worldwide.

In Europe we have to address the energy crisis through research programmes that can stimulate the technological development of energy systems that are sustainable and competitive – not least in economic terms, (the speaker was interrupted) so as to create jobs. For that reason too, our journey towards an economy based on renewable energy and energy efficiency cannot do without the guiding hand of public investment.

  Guntars Krasts, on behalf of the UEN Group. – (LV) Mr President, the current high, unstable oil prices may influence global economic growth. This would be particularly painful for those European Union Member States that in recent years have not experienced a strong economic upswing, but are being forced to pay a higher price for oil which is dictated by strong economic growth worldwide. In several new European Union Member States, the elements of an increase in oil prices produced by the dominant role played by old and energy-wasteful technologies in their economies are also at the basis of growing inflationary pressure.

At the moment there are no objective preconditions for an increase in the quantity of oil on the market. Even if in the next couple of years this were to happen, the geographical location of oil production would not change, in any case, and this means many risks will still remain, and this will not allow the oil price to fall substantially. In the same way, there is little hope that the oil-producing countries will have a genuine interest in making the oil market more stable or the ability to work together with oil consumers to achieve this. The recent nationalisation of oil companies in Russia and Venezuela, which was ideologically and not economically motivated, has made the oil-producing sector in these countries less transparent and less predictable. This is the reality with which we have to deal in forming European Union policy, and not only in the sphere of energy.

As for the current short-term challenges — in a situation where there are no free oil reserves on the market — the only available tool for stabilising oil is the reduction of consumption. Here, we should suspend all forms of subsidy and tax incentives for the oil refining sector and consumers. Tax incentives give the wrong signal to the market on the direction of oil prices and encourage consumption, and in the end increase the profits of the oil companies. The European Commission, acting in coordination with the bodies that monitor the markets of the Member States, should create a mechanism for monitoring the oil market in order to reduce speculation on the oil market, which lacks transparency. Regarding all the action strategies presented that have been planned by the Commission to expand the energy portfolio and to reduce oil dependency in the European Union, I must say that it is vital to look at a substantial increase in funding in the Financial Perspective for the expansion of the energy portfolio.

  Sergej Kozlík (NI). – (SK) Just a few months ago, the institutions of the European Union addressed the issue of energy security in Europe. According to one admittedly platonic statement, the dependency of European countries on external energy sources will increase from 50 to 70% in the next twenty years.

The countries of the European Union do not possess significant natural sources of energy. I therefore support measures in favour of increased energy efficiency, alternative and renewable sources of energy, and energy conservation. Similarly, I support planned measures aimed at increasing stocks of oil and oil products in the Member States, and a common position for the European Union in talks with OPEC and other countries, aimed at improving the stability of the market for crude oil and energy.

On the other hand, however, EU institutions must adopt a more forward-looking approach to the closure of existing energy installations. In this context, I must criticise the decision, motivated largely by political considerations, to decommission prematurely the nuclear power plant at Jaslovské Bohunice, although the plant meets operational safety requirements. This will weaken the energy potential not only of Slovakia, but also of the entire European Union.

  Robert Goebbels (PSE). – (FR) Mr President, we are living in a world starved of energy, where some 1.5 million people have no access to electricity. Crises such as the one rocking the oil market demonstrate our over-dependence on fossil fuels. We will probably never run out of oil, but the extraction of the remaining oil will become so expensive that our economies will be forced to move away from it: all the more reason to prepare for the post-oil period. Energy savings and better energy efficiency are priorities. All forms of renewable energy must be encouraged.

Nevertheless, major technical progress is still needed in order to increase the economic use of ‘clean’ energies. Europe must increase investment in all forms of energy research, and in technological developments related to hydrogen. The transformation of hydrogen requires a great deal of energy. We will not get away from nuclear power straight away. I hope that, via ITER, we will achieve fusion. In the meantime, coal will remain an important source of primary energy, even though it is necessary to develop cleaner technologies.

Currently, the erratic movement of the crude market is causing problems. The intelligence of this market could be questioned in view of the sudden explosion in the prices caused by the announcement of a cyclone and the sudden collapse of those prices once Hurricanes Katrina and Rita had run out of steam. There is too much short-term speculation on this very special market, shaped by a cartel and oligopolies. The Commission must follow more closely the predatory activity of certain highly speculative funds and aim to provide greater transparency in the setting of oil prices. The citizens of Europe would be grateful for greater regulatory involvement.

  Vittorio Prodi (ALDE). – (IT) Mr President, ladies and gentlemen, I too should like to thank the Commissioner for being here today and for his commitment. We discussed the approaches to take this morning, and I agree with his views on the need for a systemic approach to this problem, precisely because we are faced with a huge challenge.

Oil is running out and so is the ecosystem’s ability to absorb the flows of waste and combustion products. We have to bring the oil age to an end – we simply have to – but that means change, and therefore we also need leadership for change. We cannot accept the inaction shown by many national governments in this field: that is like taking everything for granted. What we can take for granted, in fact, is that oil prices will rise even higher because, given current demand, there is no reason for them to come down.

We have to take action straight away and already introduce measures along the lines mentioned before: savings, efficiency and diversified sources of energy. We have to focus on renewable energies above all, as they are the ones that will enable us to fulfil the commitment we have made to the new generations. Besides, leadership implies an ability to steer the process at a cultural level as well, because we can prepare for the real change in demand precisely through a change in culture.

It is not for the sake of austerity or sobriety, but we can raise our civilisation to new levels by taking the knowledge-based society seriously. We must do so systemically, and that is the leadership commitment that we must accept.

  Satu Hassi (Verts/ALE). – (FI) Mr President, the rapid rise in the price of oil has made everyone realise that it will not last forever. This has been obvious to thinking people for a long time now, and most recently since the analyses which have been carried out by petroleum geologists with regard to the relationship between demand for oil and the growth in its annual production.

Now we must focus on developing clean alternatives with a sustainable future, such as renewable energy and improvements in energy efficiency. It would be foolish now to squander resources on fossil fuel alternatives which are even dirtier than oil, such as liquid fuel manufactured from coal or oil shale.

As my colleague, Mr Turmes, said, most oil is used for transport. For this reason, we need to rethink our transport system. As well as biofuels, we should aim to develop public transport. For example, in EU-funded communication investment projects there should be greater emphasis than ever on the railways.

  Dimitrios Papadimoulis (GUE/NGL). – (EL) Mr President, I am sorry but, despite the fact that the oil crisis has been with us for a year, the Commission's response is, at the very least, relaxed and the Council's is non-existent. We have heard today, yet again, excellent pronouncements which, however, are not accompanied by concomitant measures. This shows a lack of perspicacity.

I ask you: have drastic measures been taken to mitigate the dependency on oil? Have solutions been sought in the energy-intensive transport sector, which consumes 70% of total production? The answer, unfortunately, is 'no'.

The conclusion is that the increase in oil prices, in conjunction with the natural disasters, due – in great part – to the careless consumption of mineral fuels, imposes the need to abandon an energy-intensive development model and quickly develop alternative forms of energy. However, in order to achieve this, we need money and, unfortunately, both the Council and the Commission refuse the idea of a special fuel tax to finance this investment in the future.

  Liam Aylward (UEN). – Mr President, while I welcome what has been said by the Council and the Commission, the reality today is that there is an ever-growing demand for fossil fuels. In the coming years, Chinese requirements alone will increase to unheard-of levels. Eventually they will be competing directly with the US for ever-diminishing supplies, which is a forbidding thought and, as we know, fossil fuels are running out very quickly.

Alternative energy sources are vital for our future. What will it take to make us serious about this? Bioethanol is one of these sources. The EU Commission recognises the importance of this industry and the fact that certain agricultural products, including sugar, could be used for producing bioethanol.

The Commission currently contributes financially to the creation of European biofuel projects. Regrettably the take-up and use of these funds by the Member States is still deplorably low.

More land will become available for alternative use as a result of the mid-term review of the common agricultural policy. Our farmers, who are guardians of the rural environment, could and would seriously contribute to controlling climate change by alternative use of agricultural land for the production of alternative and renewable sources. Is it not time that we really got serious about this?

  Luca Romagnoli (NI). – (IT) Mr President, ladies and gentlemen, when talking about oil we should ask ourselves about the European Union’s foreign policy and its substantive endorsement of the policy of aggression and robbery of energy resources and principal raw materials that is practised by the multinationals and the United States.

Everything that on the one hand produces wealth and on the other impoverishes the legitimate owners of the resources immediately becomes a target for attempted robbery by the financial and political administrations I have mentioned. Nobody here wants to talk about reducing VAT or duty; what, then, can be done to release our peoples from the yoke of dependence on interests outside Europe?

1. Nationalise resources; 2. strengthen political and economic ties with producer countries so as to become their privileged trading partners; 3. stop supporting or being complicit with US foreign policy; 4. release European research organisations working on alternative energy sources, especially biomass, geothermal and all other renewable energies, from constraints and conditions and instead give them substantial financial support; and 5. monitor the prices that oil companies charge in the various countries of the European Union.

  Christoph Konrad (PPE-DE). – (DE) Mr President, ladies and gentlemen, it is important to emphasise that the Group of the European People’s Party (Christian Democrats) and European Democrats, too, is in favour of alternative energy, and of such energy not only being promoted, but also made competitive. It is unacceptable that it should remain subsidised indefinitely. We must put alternative energy on the path towards competitiveness.

Listening to the debate in this House, I note that here, too, many Members place great trust in the state. Members are urging state intervention, basically forgetting that, after all, the oil price in a competitive economy still follows the market. It is first and foremost a market price; we have to accept this. Yet we are all aware that, ultimately, part of the problem is refinery capacity. This is insufficient at the moment, but the situation will change again somewhat.

When, though, over 70% of fuel prices at the pump in EU Member States such as Germany is accounted for by tax, we Members of the European Parliament must appeal to the national governments to take ad hoc action on this, in order to give the public in high-tax countries, in particular, something back and thus ensure continued mobility in these work-oriented societies. This is another demand that is primarily of a political nature. One cannot rail against the markets whilst being responsible for 70% of the price oneself; this would be attributing responsibility in the wrong quarters. We would therefore be well advised to make it clear that the state should support alternative energy – in moderation – but that we should also invest in new technologies. There is a wide range of such options to choose from, for example hybrid-drive systems, amongst others. The emphasis here should be on moderation and good sense, however, rather than ideology.

  Reino Paasilinna (PSE). – (FI) Mr President, Russia is increasing its cooperation with OPEC. The oil producers’ cartel is becoming more powerful than ever. The hopes and actions relating to the development of renewable energy sources are not having an effect quickly enough. The price of oil remains high, while Europe grows increasingly dependent and crisis-prone.

While the wind gathers force on one continent, Europe plunges headlong into crisis. In the United States of America, wind and water brought a tenth of oil refining activity to a halt, but the price rose by 40%. There will be more crises in the future, as the demand for oil and the oil supply are so closely related. Companies’ profits ought to be used to develop sustainable alternative forms of energy. Demand will go down, therefore, and in its place research, biomass and alternatives.

We have not, however, tried to draft laws restricting the stock exchange game which raises prices, as my colleague, Mr Goebbels, has said, or lessening the social inequality that results from oil. Is the Presidency, which also heads the G8, prepared to hold a summit meeting between the major consumers and sellers as soon as possible, and before the conference of oil ministers next spring? We ought to stabilise oil prices.

Finally, Commissioner Piebalgs, what is the situation regarding the European Union-Russia Energy Dialogue? Is progress being made?

  Roberto Musacchio (GUE/NGL). – (IT) Mr President, ladies and gentlemen, this debate of ours today on the oil problem means talking of the difficulties of our current situation – from wars to the exhaustion of non-renewable resources and to environmental damage – and deciding whether we shall have a different future or whether we shall have any future at all.

The oil crisis is not due to short-term economic factors, as is now obvious; it is linked to the fact that the current social and geopolitical set-up and development models are defunct. Finding a way out of it requires fairness, redistribution of wealth, new development paradigms, and new energy policies based on efficiency and on clean, safe, renewable alternatives, the opposite of coal and nuclear. Peace, fairness and the environment are the only options that can take us into the future. We must make them happen by means of practical policies that are not left to the market but are developed through new political choices and new action in the public sphere.

  Luis de Grandes Pascual (PPE-DE). – (ES) Mr President, Energy Commissioner, thank you for being here. Your presence is very appropriate. There was undoubtedly a unanimous clamour within the Union with regard to the need to tackle the harsh reality of the rise in the oil price. The situation was predictable, but the reality has been much more brutal than was expected. The fact is that the forecasts have doubled and crude prices are impacting on economic growth and the well-being of the Union’s citizens.

The diagnosis is shared and the formulae for alleviating the macroeconomic imbalance within a context of rising crude prices are very similar to each other. I am not saying that it is a bad thing that there is agreement in terms of the analysis, but I would say that they are medium and long-term measures and also require will, and that they are insufficient in the short term.

If you will allow me, I shall not waste time – time which I do not have – saying the usual things. Instead, on behalf of the Committee on Transport and Tourism, I would like to draw attention to the extreme situation that the road transport sector has reached, not in a temporary sense, but in a structural sense that will be difficult to resolve.

We will agree with actions by the States aimed at adopting measures to facilitate the modal change towards more efficient modes of transport. We will agree with adopting measures for more efficient use of the different modes of transport and, finally, we will agree with taking measures to increase the energy efficiency of vehicles. Having said that, however, you will have to agree with me that in the short term it is not possible to alter reality and that the main victim of the results of this situation is a sector such as transport, which is overly dependent on the evolution of demand and is at the mercy of fluctuations in oil prices.

The constant rises in the price of crude have led to a sharp increase in companies’ operating costs, placing the sector in a completely impotent situation, given that it is impossible for them to pass the rises on to the prices of the service they provide. For all of these reasons, we believe it would be appropriate, without prejudice to the adoption of measures of a general nature with which we will agree, for the Commission, together with the Member States, also to study measures to harmonise downwards the tax on diesel oil for professional purposes and to modulate taxation in a manner that has a serious effect on employment.

  Ewa Hedkvist Petersen (PSE). – (SV) Mr President, President-in-Office of the Council, Commissioner, as has been said in this Chamber, the transport sector accounts for by far the greater part of total oil consumption in the EU. We are all extremely dependent upon oil for transporting goods and for moving about because road transport is so dominant.

That is something that industry and ourselves have known about for quite some time, but awareness has not led to action. We must now make the conversion and embark upon work designed to produce renewable energy sources and fuels. Encouraging tendencies can also be seen, however: awareness is increasing and, following Katrina, the US car industry has requested that the President call a summit on what can be done to develop alternative fuels. The big car manufacturers also say that the US must reduce its dependency upon petrol. We must make use of this awareness and create the relevant basic conditions in our societies and in the EU, and that is of course something that we as politicians can do. In the transport area, we must carry out research with a view to producing new renewable fuels, placing our hopes in, for example, synthetic diesel. We must favour alternative fuels such as ethanol. We must renew the stock of vehicles and, in this area, it is a question of doing quite a lot quite quickly. We must also pin our hopes on alternative forms of transport.

We have talked about the railways today and decided to develop rail traffic. That is important but, in overhauling the White Paper, we must also write more, and take more decisions, about alternative fuels and the renewal of our stock of vehicles.

  Carmen Fraga Estévez (PPE-DE). – (ES) Mr President, I have come here to talk about a sector that is being particularly affected by this situation: the fisheries sector. I agree with the Commission that it is necessary to draw up a medium- and long-term action plan, which enables the fleet to deal with a state of affairs which is evidently structural rather than temporary, although I must also make it clear that I do not deny that some of the solutions which the Directorate-General for fisheries is indicating, for energy saving, such as the scrapping of the Community fleet, are a cause of very great concern to many of us.

I believe that, when preparing for the future, we must also take account of the present, since the fleet is already in a desperate situation and we are not convinced by the short-term measures indicated at the last Council of Fisheries Ministers.

The temporary halts of the FIFG have not been designed to deal with this kind of crisis, because the governments, furthermore, have already allocated their funds and reprogramming is problematic. Commissioner Borg’s announcement on the increase in de minimis aid does not sort the problem out either, since we will have to wait for nine months and for new Community rules in order for this to be resolved.

This is leading many Member States to help their sectors as best they can, which also causes significant distortions of competition. We would therefore once again call on the Commission, represented here by the Energy Commissioner, as we did a year ago, to enable the fisheries sector to escape from this crisis, which would involve introducing a mechanism that can be brought into play automatically when there are sudden or continuous rises in fuel prices, and that it should be mobilised before fishing companies begin to collapse en masse.

  Mechtild Rothe (PSE). – (DE) Mr President, Commissioner, Minister, ladies and gentlemen, there are a number of important responses to the current oil crisis. I am deeply convinced, however, that the only correct response in the long term is to overcome our dependence on oil, a source of energy that will last for perhaps a further 40 to 60 years, is prone to crises and is increasing in price the scarcer it becomes. We can see, therefore, that the alternatives are an obvious choice.

Energy conservation must come first. Studies have shown that savings of 14% in the transport sector and 20% in the building sector are possible, and this without any sacrifices in terms of comfort. I am addressing the President-in-Office of the Council when I express my fervent hope that, particularly in this difficult situation, we shall succeed in arriving at a sensible, workable compromise regarding the Directive on energy end-use efficiency and energy services.

A great deal has been achieved in the European Union in the field of renewable energy, but shortcomings remain. Nearly half of all energy produced is used for generating heat, a large proportion of this from oil. Here, in particular, we see that penetration is not reaching its potential. I would urge the Commissioner, therefore, to really present an appropriate directive on this, which sets out clear objectives and produces the relevant measures in the Member States.

  Paul Rübig (PPE-DE). – (DE) Mr President, Commissioner, ladies and gentlemen, the present situation with regard to oil prices is highly unsatisfactory.

On the one hand, consumers are paying very high prices; on the other, windfall profits are being generated, in not only the oil sector, but also other energy sectors. I believe that it is our responsibility to discuss the best use to which the companies could put these windfall profits and also, in particular, what the states that benefit the most from them could be doing with these taxes.

The primary issue must be that this revenue is not being invested in other fields. Perhaps the Commission should draw up an action plan for a questionnaire enquiring as to the best use to which the companies and, in particular, the nation-states could put this additional revenue pouring into their coffers. One possibility would be to launch a kind of benchmarking and best-practice project to ensure that this revenue is spent on research and development, efficiency measures, tax relief – not on consumption, but in the investment field – on relocations and on the CIP Programme.

A completely new possibility of embarking on a new path opens up in this regard. I believe that we could collect examples of the best way of managing this in the nation-states – and perhaps even at international level.

The second major issue is as follows: at the present time, invoices are being issued in dollars. This may be to our advantage at the moment, but it is also possible for the tide to turn, that is to say, when prices rise further and the dollar changes direction. For this reason, we should perhaps consider whether it is possible to create a separate euro zone in the energy sector for non-OPEC countries, or even incentives for the creation of such a zone, because this, too, would bring a certain degree of stability and independence.

My final point is that, for the hedge funds, we need capital requirements and conditions of liability that are complied with, and ultimately also transparency, in order to suitably prevent unnecessary market speculation in future.

  Riitta Myller (PSE). – (FI) Mr President, I support those who have realised that dependence on oil must cease through a determined effort to invest in renewable energy sources and energy saving. The EU ought to support the breakthrough in new environmental technologies. These innovations can help us not only to increase our self-sufficiency in energy, but we can also improve air quality and reduce greenhouse emissions.

Many of the renewable energy sources that help conserve the environment are already within our reach. Biomass can be used in diverse ways for heating, for producing electricity and as fuel. So far it is the only renewable energy source which may be used to replace liquid transport fuels. The EU should set ambitious targets to reduce dependence on oil and increase savings. Renewable energy sources should account for at least 25% of the EU’s entire energy consumption by the year 2020.

  Ján Hudacký (PPE-DE). – (SK) The current energy situation, caused primarily by the oil crisis, compels us to seek a prompt solution. It is essential to make the most effective and efficient use of crude oil. There can be no doubt that the European Union’s efforts in this direction should include moves to abandon the use of crude oil for producing electricity as soon as possible. The time has come to discuss this issue openly.

Nuclear power is a much more effective substitute for crude oil, in terms of both available production capacity and environmental protection. Nuclear power engineering employs the most up-to-date technologies with high safety standards. It is, moreover, a clean source of energy that does not produce any CO2 emissions. A safe solution has also been found to the problem that opponents of nuclear energy often stress – nuclear waste. Investment for research into safe nuclear waste recycling and the further development of new technologies, which the European Union can also provide by enabling access to the 7th Framework Programme, would soon eliminate any doubt concerning the safety of nuclear plants.

On the other hand, I do not wish to downplay the importance of other alternative sources of electrical energy, particularly those sources that do not produce CO2 emissions. However, the seriousness of the current energy situation requires the adoption of the only rational and expedient solution: a return to nuclear power through the construction of new production capacity.

  Mia De Vits (PSE). – (NL) Commissioner, if you want to cushion the direct impact of the increase in oil prices, it is not good enough to come up with long-term solutions alone. We expect the Commission to play a coordinating and supervisory role for short-term measures too. It is among the public, particularly the weak, and those on the lowest incomes, that expensive oil claims its victims. It is up to each country to take measures in order to alleviate those problems, but the European Commission could coordinate the measures, by for example allowing VAT at the reduced rate within its field of competence. The Commission is also sceptical about support to industries that are hit by high oil prices, especially the transport industry, but also the fisheries industry, and in these too, it could play an important role in coordinating the changeover to energy-friendly equipment. Many fishermen lack the financial resources to cover those costs, and that is why I should like to ask you to redouble your support in order to bring this changeover about.

  Alejo Vidal-Quadras Roca (PPE-DE). – (ES) Mr President, Commissioner, Mr President-in-Office of the Council, I would like firstly to congratulate the Energy Commissioner on his speedy reaction to the extreme and recent volatility of oil prices represented by this plan, the main points of which he has explained to us today and the basic ideas and concrete measures of which I fully accept.

The price of crude rose by 50% last year and this increase has led to a notable deterioration of the competitiveness of our economy. Many governments are therefore subject to strong pressure to reduce the tax on oil in certain transport sectors. As the Commissioner has said, however, that is not the solution. As well as creating distortions in the market and problems with the rules on State aid, it opens the way to possible increases in consumption and future rises in the barrel price.

We must adopt the measures that the Commissioner indicated in the plan: decisive promotion of the use of renewable energies and improving efficiency, increasing refining capacity, combating speculative movements, considering nuclear energy as an essential element of the security of supply strategy and promotion of the use of biofuels. We are debating a crisis today, but we must draw sufficient strength from it to plan for our future in an intelligent manner.

I do not wish to end without asking the Council, the representative of which is currently looking at a piece of paper with immense interest, to consider very seriously the effects of an intolerable reduction in the funds dedicated to technological research and innovation in the seventh framework Programme given the current circumstances.

  Antolín Sánchez Presedo (PSE). – (ES) Mr President, the energy system is vital and is of a global dimension. The measures adopted within the European Union to alleviate the effects of rising prices should conform to a coordinated approach and be consistent with our multilateral commitments.

We must achieve more transparency and balance in the setting of prices, eliminating speculative behaviour, preventing the abuses by large operators and preventing public actions that create distortion. We must introduce more rationality and efficiency into the global system, preventing energy wastage that we all pay for — the United States use 50% more energy per dollar of GDP than the European Union.

We must reduce the disparity of environmental regulations, demonstrated in the United States by the recent hurricanes, urging companies to hold bigger stocks and promoting new investments.

We must move towards a new energy model by means of innovation in transport, the development of technologies for decarbonisation and diversification and the development of renewable resources, and also by means of stable and lasting international cooperation.

  Peter Liese (PPE-DE). – (DE) Mr President, Commissioner, ladies and gentlemen, I join with those who have thanked and praised Commissioner Piebalgs for his active and coherent strategy.

I should now like to discuss the subject of renewable energy: not because I believe that it is the only solution to the problem but because, as shadow rapporteur on behalf of my group, I bear particular responsibility for this issue. It is true that renewable energy forms part of the response to the high oil prices; but, in my view, another important factor is that Europe and the Member States have not always set the right priorities with regard to renewable energy.

We have a directive on electricity, and are active in that field, albeit rather less active in the field of biofuels. Yet we do not have a coherent European strategy for promoting renewable energy in the field of heating and cooling, even though dependence on oil and gas is strongest here. We also know the reason for this: namely because many advocates of renewable energy see it only as standing in opposition to nuclear power. I wonder, however, whether it is really a matter of supreme importance to withdraw from nuclear power. Is it not much more important to reduce dependence on oil and gas and bring the consequences of global climate change under control as far as possible?

Some might say that it is important to do one thing and imperative to do another; but that is not so easy with only limited means at our disposal. Germany, for example, has an Act on renewable energy, under which EUR 0.5 per kilowatt-hour is invested in photovoltaic technology. Cumulatively, EUR 3 billion will have been raised in this field in the coming years; of course, this money cannot be found elsewhere.

We must remind ourselves that, for every euro invested in heating and cooling, for example in heating based on biomass, heat pumps or solar thermal energy, 45 times as much carbon dioxide and 45 times as much fossil fuel is saved. That is why it is time for some new priorities.

  Péter Olajos (PPE-DE). – (HU) Mr President, although the price of crude oil has tripled on the world market within the past three years, the insatiable hunger of mankind for energy does not seem to have abated. Moreover, the economic impact of natural disasters this year seems to sound warning bells for our petrol-based society. The majority of Member States rely on energy sources of remote areas and faraway countries, resulting in a dependency on less democratic states. If we do not act early enough, we will have to fall back on even more polluting fuel types when we run out of pure oil and gas, resulting in even more serious environmental damage. Therefore I strongly welcome the five-point plan of the Commission, especially its chapters on energy efficiency and the use of alternative energy sources.

We must reduce oil consumption in energy production and especially in transport, by all means. The relevant directive must be followed more strictly in order to facilitate the promotion of biofuels. Service providers as well as consumers must be encouraged by preferential tax and administrative measures. It is extremely important to support non-oil based energy production research to a larger extent in Europe, both at community and Member State level. Nanotechnology in the solar energy sector, biotechnology in the biofuel sector, MUX in the nuclear energy sector or ITER in the area of thermonuclear energy production must all be supported, as they are crucial both for the environment and economy, and such support is indispensable if we want to stop the alarm bells ringing. It is good news that major oil consumer and environment polluting countries like the USA, China, India, Australia, Japan, and South-Korea signed an agreement in June this year in Laos as a ‘counter-Kyoto agreement’ to develop and promote cleaner energy types and technologies, since just like the problem itself, the solution must also be global.

  Ivo Belet (PPE-DE). – (NL) Mr President, Commissioner, expensive oil is, of course, the best incentive for both the authorities, industry and consumers to look for alternatives, and it goes without saying that we unreservedly endorse the initiatives you have developed in this area over the past few weeks. This is all good and well in the longer term, but in the short term, as has already been pointed out this afternoon, countless families, single people, both the old and young, are at risk of being left in the cold, quite literally, in the next few months, because they can simply no longer pay their heating bills. I fear that the Commission, with its consistent, yet somewhat harsh stance, has too little consideration for this.

Meanwhile, various national governments have taken all kinds of new and diverse measures. The Belgian Government, for example, intends to reimburse some of the heating oil in order to relieve the pressure, but such measures do not, of course, solve the heating problems of the very many people here and now, and that is why I appeal to you to at last do something in the short term. A temporary reduction in VAT on fuel oil may not be such a bad idea. I know, Commissioner, that it is not one that you favour, but this is a social measure, after all. In the longer term, you may want to put a kind of bandwidth in place. With this, I mean not only a minimum, but also a maximum rate, in other words a lower limit and an upper limit within which the Member States should move. In that way, we can do something about the huge and ridiculous price differences between the Member States.

Fuel oil, gas and electricity are all basic necessities for heating houses and are definitely not luxury goods. They are vital and, as you know better than I do, much of the price goes on VAT and excise to boost the national coffers. There is therefore definitely room to take structural measures, certainly in the short term.

On a final note, Commissioner, whilst you must obviously protect the EU’s interests in the longer term, you could make a very kind gesture towards all those vulnerable families who are at risk of getting into difficulty in the coming weeks.

  Ivo Strejček (PPE-DE). – Mr President, I wish to make a few remarks that some might find heretical.

In my opinion, the European Union should encourage international political debate that would open the way for investment in developing countries. The benefits of this are obvious: major European companies would contribute financial resources to developing countries, while Europe would benefit from the cheaper oil from those countries and help to increase living standards there.

From an economic point of view, we should let the market work without any regulation, any limitation or any further burdens. We should stop dreaming of cure-all renewable energy sources and remain realistic. We should not make any attempts to artificially influence oil prices. The only possible solution is to let the market work. The market forces stemming from a supply and demand approach will themselves re-establish the balance between high consumption devices and the natural and consumer-friendly development of brand new products.

We must not step up our efforts to achieve tax harmonisation at a supranational level and we must not promote tax incentives that would result in lower rates of taxation for individual segments of the energy or oil industry.

  Douglas Alexander, President-in-Office of the Council. Mr President, I thank all the honourable Members for their speeches. I am conscious of time, but let me seek to respond to a number of the points made in the course of what was a useful and timely debate.

Mr Chichester began the debate with a clear plea for the maintenance of national taxation and urged a measured view of the present situation. I have some sympathy for the views that he outlined.

Mr Swoboda echoed points I had made earlier about ensuring transparency in relation to the operation of international oil markets. Ms Hall asked about the energy end-use efficiency and energy services directive. I can assure her that Member States and Parliament are working hard to identify compromise positions on those issues where there is still divergence between the Council and Parliament. We hope that all the institutions will engage constructively in a process to secure what is an important directive for all of us.

Mr Turmes raised wider questions of environmental sustainability – I have just mentioned the energy end-use efficiency and energy services directive. He also, however, referred to what he called 'the Swiss model agreement on road tolls'. On the assumption that he was referring to the Eurovignette, let me set out the Presidency's position. As the Presidency, we will make real efforts to secure a negotiated agreement with the European Parliament at second reading. However, I should stress at this stage that the agreement reached on 5 April at the Transport Council represents a delicate balance and a delicate compromise, so that there is limited room for further changes in light of the decisions reached at that stage.

Mr Kozlík welcomed the steps that have already been taken in relation to oil shocks and the greater cooperation that has been established with OPEC. On the issue of investment in refining capacity, it is important to recognise that this is already taking place, but prices are sending a signal that even greater investment is needed throughout the oil sector, including in refining capacity; greater transparency and improved investment climates are needed to help bring forth the necessary investment that we have been arguing for.

Mr Goebbels argued powerfully for hydrogen transformation and urged greater transparency – a point I have already addressed.

In relation to the more general question of speculation by traders, it is difficult to know exactly the balance, the exact role that speculation has played in prices. However, I would refer to the analysis produced by the IMF in its recent World Economic Outlook, which implies that speculative activity follows movement in oil prices, raising doubts about whether speculation has really been the key driver of the current high prices.

Mr Prodi argued that it is unacceptable for us to do nothing. I hope that my remarks and the Commissioner's remarks at the outset of this debate have been sufficient to convince him that steps are being taken and will be taken in the future.

Mrs Hassi raised questions relating to the sustainability of supply. The International Energy Agency noted in its 2004 World Energy Outlook that most estimates show that proven oil reserves are sufficient to meet projected world demand over the next three decades and that global oil production will not peak before 2030, provided the necessary investments – which is an important caveat – are made. As I mentioned in my opening remarks, the key challenge is creating the right climate for that investment now to be made.

Mr Papadimoulis raised a number of points. I have to say that I respectfully disagree with his views as to whether it is necessary or appropriate for the Council to seek to impose a Europe-wide tax in relation to the circumstances in which we find ourselves.

Mr Aylward raised the issue of the common agricultural policy. The British Presidency has never been averse to discussing that policy, but I would respectfully suggest that there are perhaps other forums in which it would be more appropriate to explore the wider issues raised by his speech.

Similarly, Mr Romagnoli raised a number of fascinating issues, including the foreign policy of the United States. However, regrettably, given that I have five minutes to wind up this debate, now is probably not the time to further explore those particular issues.

Mr Konrad raised the issue of refining capacity. I would refer him both to my introductory remarks and the remarks I have just made.

Mr Paasilinna raised the important issue of the relationship with Russia. Again, I would respectfully refer him to the fact that, in my introductory remarks, I stressed that there is an energy dialogue – perhaps that will be something to which the Commissioner will return – and that there is a continuing dialogue between Russia and the European Union during our Presidency, not just on energy matters, but on a whole range of issues.

Mrs Fraga Estévez raised important broader issues relating to fisheries policy and here I would make the same point I made in connection with the common agricultural policy. While I am alive to the burden being imposed on fishing communities by higher oil prices at the moment, there are many other forums in which a fuller and franker exchange can be held on the future of the common fisheries policy.

Mrs Rothe raised the issue of the directive on energy and efficiency and again I hope that I have dealt with that in the course of my remarks. Mr Rübig raised a number of points in connection with the new opportunities which he mentioned. I would certainly concede, and indeed trumpet, the fact that, in the automobile industry, for example, the markets themselves are providing solutions, such as the growth of hybrid cars, which are gaining an increasing market share in a number of European countries.

Mrs Myller made a powerful case for renewable technologies and one for which I have great sympathy. Mr Hudacký raised the issue of nuclear energy. I would candidly and respectfully suggest that how a country meets its energy needs and the role of nuclear power within that arrangement is ultimately a decision for each Member State. Nuclear power is certainly one option that countries can consider, but in considering it specifically as an alternative to oil we should certainly keep in mind the concentration of oil demand in the transport sector of which we have heard so much in our debates today.

Mrs De Vits raised the broader question of fuel duty levels. A number of honourable Members touched on the issue of whether a solution involving fuel duty levels could help relieve the burden of higher oil prices being experienced by Member States at present. I would again return to the recent informal Ecofin Ministers meeting at which it was agreed that distortionary fiscal and other policy interventions that prevent the necessary adjustments should be avoided by Member States. In particular, Ministers confirmed that, where short-term targeted measures are taken to alleviate the impact of higher oil prices on the poorer sections of the population, they should avoid distortionary effects.

Mr Sánchez Presedo and Mr Liese argued the case for renewable energies and I have already said that I have some sympathy with those points. Mr Olajos said that the problem we have been discussing during the last hour-and-a-half is a global one. I would respectfully suggest that is certainly the case, but so too is the remedy that needs to be found.

Mr Belet raised a number of questions for the Commission, so I shall leave those for the Commissioner to answer. Finally Mr Strejček offered what he suggested might be heretical remarks to conclude our debate today. I will leave it for others to judge whether they merit that description. I would simply suggest that, if he is earnest in his requirement or in his urging for a proper and frank international discussion of some of the issues that we have touched on today, then I would draw his attention to the priority that the British Presidency, the British Government, placed on the issue of climate change during our chairmanship of the G8 this year. I believe it was a brave and principled decision to say that, together with international development in Africa in particular, climate change would be the particular focus for the meeting in Gleneagles between 6 and 8 July.

As has been clear throughout the whole debate, this is an important issue not just for Europe but for the global economy and one that requires international and cooperative action. Sustainable economic growth depends on access to reliable and affordable supplies of energy. As I hope I made clear in my introductory statement, the keys to improving the functioning of the oil markets are better conditions for investment, greater market transparency and, in particular, better data, improved energy efficiency and the development of alternative technologies.

Consumer and producer nations and international organisations are already working well in these areas, with the European Union in particular playing a constructive and valuable role. Together our efforts can help the market adjust to the rise we have experienced in demand and help it cope more effectively with future shocks, affecting both demand and supply.

IN THE CHAIR: MR TRAKATELLIS
Vice-President

  Andris Piebalgs, Member of the Commission. Mr President, I should like to thank the European Parliament for its strong interest in and activity on sustainable energy issues, where we should address all the questions – security of supply, competitiveness and environmental challenges – at the same time. I expect that in future we will have more debates on this subject.

I should also like to thank the Committee on Industry, Research and Energy and its chairman, Mr Chichester, for the possibility to discuss in detail today some of the issues raised in plenary with the committee members. That is why I shall not deal with each suggestion. I will concentrate my remarks on some particular points.

With regard to legislative proposals, I assume that we have a good chance of finding an efficient compromise for energy end-use efficiency and an energy services directive. In the current situation the need for such a directive is even stronger. In November the Commission will approve a biomass action plan. The next step could be a legislative proposal for using biomass in heating and cooling. These are short-term measures that could be adopted.

At the same time I can agree with the statement that there can be no miracle solution. It really means changing mindsets and asks for a systematic approach, not only from the Commission but also from the Council. I expect that during the Council meetings the energy situation will be discussed in more detail. The Council has already discussed fisheries. Other Councils also look at issues that relate to the new situation of supply and energy.

In all the cases the answer from Europe depends very much on investment in research and development. That is the right way to proceed. The financial limits of the Seventh Framework Programme will, to a large extent, determine how fast our response will be. I hope that by the time of the adoption of the Seventh Framework Programme there will be the financial means for critical needs in some particular areas to address the issues we have debated today.

I salute the motion for a resolution that you will adopt tomorrow. It is a very strong, ambitious and realistic resolution. The Commission will continue the activities on the five areas, but not only on these. A systematic approach, patience and consistency will be needed to achieve the results that European citizens expect of us.

  President. – I have received six motions for resolutions in accordance with Rule 103(2) of the Rules of Procedure on oil⁽¹⁾.

The debate is closed.

The vote will take place on Thursday 29 September 2005 at 12 noon.

Written statement (Rule 142)

  Ilda Figueiredo (GUE/NGL). – (PT) The recent developments in oil prices has brought the problem of high oil prices to the top of the agenda, in light of the severe problems that this rise has caused in terms of economic growth and employment, and this at a time when the EU economy is virtually grinding to a halt.

As Professor Michael T. Klare said recently, the era of easy oil is over. This twilight for the oil era is increasingly being seen in the politicisation of oil policy and by the repeated use of military power to gain control of available supplies. There is no shortage of examples and the war in Iraq is one of the most visible.

We feel it is crucial that the issue of assessing resources and the drive towards prospecting for and developing hydrocarbons at both European and world level be the subject of far-reaching debate. One positive step would be to arrange a conference under the auspices of the UN, so as to ensure a worldwide approach to reducing oil consumption.

We must prepare for the future by investing in research to find ways of reducing oil consumption in terms of GDP. Furthermore, we must invest in alternative energy sources and in using energy more efficiently, which is one of the most serious structural problems facing a number of countries, including Portugal. The next financial perspective must accord this issue the importance it deserves, and earmark funds for renewable energy.

(1) See Minutes.