Homegrown energy security for Europe

The European Union is highly dependent on foreign oil. For every 100 litres consumed within the EU, 90 are imported.

Meanwhile, domestic oil production is plummeting, down more than 50 per cent over the last decade.

Unless the EU changes course and increases its production of alternative energy — including biofuels, an option the EU has long neglected — some 95 per cent of its oil will come from foreign sources by 2030, according to the International Energy Agency (IEA).

The current state of affairs remains the EU’s Achilles heel, because it implies dependence on imports from unstable, authoritarian regimes.

In 2014, EU member states spent a staggering 271 billion euros on foreign crude oil — more than the combined GDP of Bulgaria, Hungary, Slovakia and Slovenia.

Roughly half of this money went to Russia, the Middle East and North Africa.

Thus, not only is the EU exposed to global supply disruptions; it is also helping to prop up authoritarian governments and empower hostile regimes, which limits its own ability to provide effective, coordinated responses to threats and provocations.

The EU’s struggle to devise coherent political and economic strategies to confront the challenges posed by Russian aggression in Ukraine and the inferno in the Middle East is a case in point.

The United Kingdom’s recent decision to boost defence spending highlights the growing recognition that strong military capabilities will be needed to uphold Europe’s security and sovereignty.

But as long as its dependence on foreign oil persists, the EU will remain far weaker than it needs to be.

The proposed Nord Stream II pipeline — which would funnel even more gas from Russia to Germany — is only likely to aggravate the situation.

Europe’s energy security is likely to gain salience in the coming months, as 2016 shapes up to be another turbulent year in international politics.

This year is also likely to see the completion of the EU’s Energy Union, established to ensure secure supplies of affordable, climate-friendly energy.

Unfortunately, Europe’s dependence on foreign oil has been left out of the discussion. 

The European Commission must provide clear direction if EU member states are to develop alternative sources of energy.

Renewable energy from wind and sun can certainly play a role in decreasing the EU’s energy vulnerability.

Such sources are already helping to reduce dependence on coal and gas for electricity production.

However, when it comes to energy production from oil — most notably fuel for cars — it is likely to be years before wind or solar energy can provide viable alternatives.

The EU should follow the example set across the Atlantic, where countries have worked to reduce their reliance on foreign oil.

The United States, for example, has created incentives for investment in alternative fuels.

Indeed, the US is the world’s largest producer of bioethanol, which — along with the production of shale gas — has helped reduce foreign oil imports by at least 25 per cent, while lowering carbon dioxide emissions and creating local jobs.

Brazil, too, provides a compelling example, having worked since the oil crises of the 1970s to reduce its reliance on imported energy.

Today, Brazil is a net oil exporter and the world’s second-largest producer of bioethanol, which has replaced more than one-quarter of the gasoline once used in the country.

Unfortunately, much of the policy discussion surrounding biofuels in the EU is dominated by outdated arguments linking them with rising food prices.

Food should not be used to fuel cars, opponents insist.

Today, however, advanced biofuels are not based on food, but on waste from industry, agriculture and private households.

In the words of José Graziano da Silva, director general of the Food and Agriculture Organisation of the United Nations, biofuels “can be an effective means to increase food security”.

Done right, their development would mean “more fuel, more food and greater prosperity for all”.

Biofuel technology kills four birds with one stone: It improves energy security, recycles waste, reduces greenhouse-gas emissions and produces jobs (often in rural areas).

That is why replacing imported oil with homegrown energy is one of the most important and far-reaching legacies today’s Europeans could leave to the Europe of tomorrow.

The writer, former prime minister of Denmark and secretary general of NATO, is founder and chairman of Rasmussen Global. ©Project Syndicate, 2016. www.project-syndicate.org