If there was ever a case for a united Europe then this is it

The current EU energy review offers real opportunities to improve the working of the internal market and the competitiveness of the energy sector. Increasing interconnectivity between markets will have beneficial effects on security of supply as well as widening choice for consumers. It is also an opportunity to consider other policy areas where the supra-national level comes into its own.

Whilst it is widely acknowledged that, post-referendum rejections of the EU constitution, there is little appetite for enhancing the EU’s role, in energy policy the EU can deliver real, identifiable gains for all of the EU’s citizens that are beyond the ability of member states acting alone.

It can achieve more in foreign relations with producer countries, in facilitating new renewables and low carbon technologies, in reducing the emissions of household and office electric goods through enhanced low-energy use product standards, and in bringing a greater deal of interconnection to the EU’s energy network.

The EU’s role is perhaps most obvious at the level of international relations. In terms of market power alone the EU dominates Russian gas exports: it is a powerful position, and as writers in this edition point out, the EU would look more credible and reliable if it accepted that trade always represents mutual dependence.

And Russia has proved a reliable exporter: in the 1980s, West Germany began importing significant quantities of Soviet gas; at the same time it was accepting US Pershing II missiles on its soil in the last stand-off of the Cold War — yet Soviet Union gas exports were never interupted.

No such level of confrontation is expected today with Russia. While over-dependence on any one source is probably unwise, security of supply fears can be overstressed — and have been.

It is right to ensure that sufficient supply will be available and that transit routes are sufficiently diverse. Healthy EU/Russia relations are important and the EU has a proper role to play in representing the largest consumer market for gas in the world to the second largest producer. A more constructive, less fearful stance would be wiser. And after all, the strength of its energy sector ensures that Russia’s economy is now self-supporting, and that it will avoid failed state status — a considerable gain.

But Russia is not the only source of supplies of gas: Central Asia, the Caucus, North and West Africa and the Middle East are all important, with the latter set to be increasingly so. Exporting the European Union’s soft power, and the wise backing of pipeline routes — like the recently announced Nabacco pipeline extending the Baku-Cehan pipeline to Central Europe — are key aspects of ensuring that the EU consumers are able to benefit from their undoubtedly well-placed geographical position in relation to the world’s known hydrocarbon reserves — and to continue to do so in the long term.

The argument for accession of Turkey to the EU is buttressed by its status as an ‘energy corridor’, and by the added weight it would give the EU in influencing Central Asia and the Middle East: were it to join, the EU would neighbour Iraq and Iran, both sources of gas and oil which will grow in importance as reserves in mature basins continue to dwindle — and in time that will include Russia too.

There is a role for the EU in facilitating low-carbon energy for member states. Nuclear energy is prohibitive unless developed at reasonable scale — perhaps eight or ten, same design, power stations. Many countries will be unable to commit to the number needed to see unit costs fall. But demand across the EU would be sufficient. It is essential that whatever gains can be made in this area for member states, even if it is on a opt-in or opt-out basis, are made.

Having a single one-stop authorising agency for nuclear power stations across the EU, perhaps made up of national regulators, would make nuclear a cheaper and more practical option. Arrangements might be made for the handling of waste on a similar basis.

Carbon capture and storage offers the prospect of capturing carbon emissions from coal- or gas-fired plant and storing it in geological formations rather than releasing them into the atmosphere. This offers the world a low-carbon future even with the expected increases in overall energy use fuelled by economic growth in China and India. But there is no working model on any industrial scale in operation. Nation states are reluctant to fund development on their own, and there is no commercial case for it at less than circa $40/tCO2 — which is not in prospect.

In these circumstances there is an opportunity for the European Union to drive this forward. It would be a pity if, by phase 3 of the EU Emission Trading Scheme, post-2012, there was not a carbon capture and storage technology available to be exploited by energy companies and supported by robust carbon prices in a more mature ETS. This would be significant not just for EU energy security and emissions reductions — allowing coal a healthy long-term future — but for allowing China and India to engage in emission reduction in a serious manner. It would be a gift to the world.