The European Union’s Energy Security Challenges

Abstract

Recent increases in energy prices and a steady escalation in global energy demand—expected to rise by nearly 60 percent over the next twenty years—have led U.S. policymakers to engage in a wide-ranging debate over how best to address the country’s future energy requirements. Similarly, energy security has become a policy priority for the European Union (EU) and its twenty-seven member states. Together, the United States and Europe represent the world’s largest energy market. Although they produce approximately 23 percent of the world’s energy, they consume almost 40 percent of the world’s supply. The EU imports about 50 percent of the energy that it consumes. Barring significant changes, the European Commission expects this figure to rise to 65 percent by 2030. Approximately half of the EU’s imported energy comes from Russia, in the form of oil and natural gas. Europe’s growing dependence on Russian energy has fueled speculation that Moscow is using the “energy weapon” to try to influence European foreign and economic policy. The EU has traditionally exerted little if any influence over the energy policies of its individual member states. However, in March 2007, in the face of increasing concern regarding Europe’s reliance on Russian energy resources, and growing public pressure to address global climate change, the EU member states agreed on a series of policy measures intended to form the foundation of an “Energy Policy for Europe.” The March agreement aims to increase the EU’s ability to secure and diversify European energy supplies, while seeking to reduce EU-wide carbon emissions by promoting alternative and renewable energy sources.