Hagbarth Publications, Germany. January-October 2007.
Ole Gunnar Austvik:
Energy Challenges for Europe
Energy prices have been rising rapidly over the past years. The most important reason is the growing imbalance between global oil demand and supply. Strong economic growth in China and other Asian countries, and the lack of adequate additional oil supplies e.g. from the Middle East, are major reasons for real oil prices climbing almost as high as in the early 1980s. High oil prices are transferred to natural gas prices and, consequently, to electricity prices.
European energy prices depend heavily on global energy prices. At the same time, increasingly more energy is imported to the EU. The exposure to external price and supply shocks poses questions about the sustainability of future European energy supply, energy mix and efficiency, as well as geopolitical balances. Rapidly rising fuel prices and possible supply disruptions can have serious consequences for economic growth, political stability and EU’s competitive position.
The import dependency can make EU economies potentially sensitive and vulnerable to external events. The expressed worries over the development of the structure of the Russian oil and gas sector, and on gas (and oil) transit problems through Ukraine and Byelorussia, illustrate that such issues are now high up on the EU political agenda. Political unrest in the Middle East is another element that reinforces the attention on energy issues.
Energy usage is also closely linked to emissions of greenhouse gases and their implications for climate change, air quality in densely populated areas and other environmental risks. Reduction of energy usage, improvement in energy efficiency and development of clean technologies could help the environment. For the EU, it is a challenge to enhance environmental standards and secure supply, and at the same time keep the European economy competitive on the global stage. The challenges press...