EU to miss days of secure, cheap energy

Brussels, January 10:

The days of secure, cheap energy for Europe are over, the European Commission will warn Wednesday as it moves to wean itself off oil imports and slash the carbon emissions blamed for global warming.

Surging world demand for limited stocks of oil and gas will send prices - and the EU’s energy import costs - spiraling in future decades, the EU’s executive arm predicts as it sets out a three-year plan to tackle its energy crisis.

Europe got a reminder of the high-risk future it faces this week when shipments of Russian oil via a pipeline running through Belarus were disrupted by a trade dispute between the two former Soviet republics - a year after a similar Russian row with Ukraine temporarily shut off Europe’s natural gas supply.

It is “not acceptable” for energy transit or supplier countries to halt deliveries without consultation, EU Commission President Jose Manuel Barroso and German Chancellor Angela Merkel said Tuesday.

But such risks are growing, the EU will warn, saying it is not certain that major oil and gas producers such as Russia will make needed investments and commitments to guarantee Europe’s supply. Europe has to look at alternatives, it said: using more renewable energy such as wind power and biofuels.

Officials will suggest setting a new target for renewable power by 2020, with a binding target for biofuels to replace oil in vehicles. It says that biofuels could take up 14 percent of market by 2020.

“Major investment” in renewable energy is needed to create economies of scale that would make it viable, EU said, acknowledging that many EU nations will fail to meet existing goals to draw 12 percent of all EU energy from renewable sources by 2010.

But this can only help cut into Europe’s growing hunger for power - and imported oil and gas. Electricity generation will be “heavily dependent” on natural gas in the near future, it said, warning a number of countries reliant on one main supplier that they should diversify.