Transatlantic Energy Security Situation: Unreliable Supply, Unreasonable Cost

BRUSSELS (April 30, 2006) — In what Robin West, chairman of PFC Energy, called a problem of “unreliable supply at unreasonable cost,” the transatlantic community faces critical challenges on energy security, a broad group of American, Canadian, Turkish, and European discussants said today at Brussels Forum: Transatlantic Challenges in a Global Era .

A nuclear Iran, an obstinate Russia, an unstable Iraq, and troublesome politics in Nigeria and Venezuela all pose problems for keeping North American and European homes heated and cars running, said a group of expert discussants including General James L. Jones, Supreme Allied Commander, Europe; Andris Piebalgs, European Commissioner for Energy; Canadian Foreign Minister Peter MacKay; Polish Defense Minister Radek Sikorski; and Egemen Bagis, a member of the Turkish Parliament and foreign policy advisor to Turkey’s prime minister.

But energy is more than just a transport issue; it also impacts politics. And it can mean nuclear power or oil, gas or coal. “Energy is one of those words, like love and finance,” West said. “It means different things to different people.”

“If one side uses the paradigm of trade and the other side has the paradigm of power…then it’s not hard to see who will prevail,” Sikorski said about Russia ’s control of the gas supply to Eastern Europe . “We want to buy the energy, but we don’t want monopolies, we don’t want blackmail.”

“We should get our good friends to accept third party access to the pipes… to give up the pipe monopoly,” said Andris Piebalgs, the European Commissioner for Energy.

Piebalgs noted that 44 percent of the world’s oil is consumed by the United States and Europe , which prompted MacKay, who joked about Canada ’s oft-overlooked international stature, to point out that his country is the second largest energy producer in the world. “I would suggest that we’re a better place to do business now than, say, Venezuela , or Iran , for example.”

Because energy production happens in some of the world’s trouble spots, NATO is a potential asset to protecting the energy supply to Europe and beyond. “NATO’s possible roles (to secure energy) include the defense of critical infrastructures,” Jones said.

And Turkey may also hold a key as a crucial link between the Middle East and Europe , a place for pipelines and shipping lines, Bagis said, adding that this infrastructural link would be good for an enlarged European Union that included Turkey .

In a larger discussion with the audience, West said an oil price of $125 per barrel is a definite possibility. The markets are very tight today, and a significant political or economic shock from one of the world’s producers could drive the price up. “We will survive,” Piebalgs said. “If it spikes, we can use our reserve systems.”

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