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Energy Policy in the European Union

Janne Haaland Matlary

© Janne Haaland Mathiry 1997

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To Arpdd) perennial critic

Contents

Acknowledgements

List oj Abbreviations

Introduction Analytical approach The setting for EU energy policy The structure of this book

1 The DeveloplDent of Energy Policy in the European Union Introduction: the lack of an EU energy policy The beginnings: the ECSC and Euratom The turning point: the internal energy market Extending the scope of energy policy Conclusions

x

XlI

1 2 6

10

12 12 14 19

22 23

2 National Energy Policies in EU Countries 25 Introduction: the structural parameters 25 The producers: Netherlands, Denmark and Britain 28 The importers: Germany, France and Italy 32 The small importers: Austria, Belgium, Finland, Sweden

and Luxembourg 40 The 'cohesion' countries: Ireland, Greece, Spain and

Portugal 42 Conclusions 43

3 The Internal Energy Market 45 Introduction: the Commission as regulator 45 Deregulation and reregulation 46 A competence for networks 51 Policy on state aid 52 The IEM as a legal international regime 53 The Euro-Mediterranean strategy 54

VlI

Vlll Contents

Free market rules for exploration and production 55 Conclusions 56

4 Towards a Cotntnon Energy Policy? 58 Introduction: taking advantage of external 'windows of

opportunity' 58 The CEP proposals 60 The fight for a formal competence 62 The environment and energy 65 Energy policy towards Central Europe and the CIS 71 Conclusions 77

5 The Role of Metnber Governtnents and Interest Groups 79 Governments and the internal energy market 79 Governments and the common energy policy 88 Domestic and ED-level strategies 93 The role of interest groups 95 Conclusions 103

6 The Role of EU Actors 104 The ED institutions and decision-making after the SEA

and TED 104 The Commission 106 The European Court of Justice and the Competition

Directorate 119 The European Parliament 124 The Council of Energy Ministers 128 The European Council 129 Conclusions 130

7 EU-Metnber States' Relations: Etnpirical Conclusions and Theoretical Itnplications 133 Member governments and the energy policy-making

process 133 The ED actors in the energy policy-making process 137 Theoretical implications: how to study the influence of

non-state actors 141 Theoretical conclusions 149

Conclusion: The Future of EU Energy Policy

Guide to Further Reading

Riferences

Index

Contents ix

151

161

163

172

Acknowledgetnents

The research for this study started in 1988/89 during a Fulbright research stay at the Foreign Policy Institute of the Johns Hopkins School of Advanced International Study in Washington, DC. There I was fortunate to work with Professor Wilfried Kohl and others with an interest in the political economy of energy trade. During that time I also benefited from discussions with scholars at the MIT and Cornell University, among them Richard Samuels and Peter Katzenstein.

At the Norwegian Institute ofInternational Affairs (NUPI), where part of this study was written, I enjoyed the cooperation of Professor Martin Seeter, who, apart from being knowledgeable about energy, is an expert on EU integration. The study was completed at the Center for International Climate and Energy Policy Research (CICERO) of Oslo University. I wish to thank director Helga Hernes and Professor Arild Underdal for helpful comments and advice, and also for the generous amount of time off I was given from other research to complete this book in 1995. In my senior research position at ARENA (Advanced Research on the Europeanisation of the Na­tion-State), Oslo University, I was able to do the final revision of the manuscript.

The empirical material for the study was gathered over several years, starting in 1985, and included several rounds of interviews in the national capitals of the countries being studied and in the EU Commission in 1985, 1986, 1990 and 1992. I am grateful for the openness of the interviewees and respect their general wish to remain anonymous. Director Hans Maters ofDGXVII was very helpful both in terms of substance and in providing me with contacts to discuss the work of the Commission.

Professor Stephen George, University of Sheffield, and Professor Walter Carisnees, Uppsala University, provided incisive criticism when my DPhil thesis on EU energy policy was defended in March 1994. Likewise I am indebted to Professors Knut Midgaard and Helge Hveem of the Institute of Political Science, Oslo University, for their helpful comments on the thesis, as well as to an anonymous reviewer who provided most helpful and detailed comments.

x

Acknowledgements Xl

Two of our four children were born during the period of research for this study. They provided their mother with ample reminders of the relative importance of her academic undertaking. They, as well as my husband, luckily took no interest in the subject matter.

Oslo J ANNE HAALAND MATLAR Y

List of Abbreviations

bern CBI CEDEC

CEEP CEFIC CEP CEPCEO CERT CFM CIPE CIS CSCE DREE EBRD ECJ ECSC EDC EEA EEC EiB EMU ENI EP EPC ETUC EU Euratom Europia Foratom IAEA lEA IEM IFIEC

billion cubic metres Confederation of British Industry European association of public sector energy distribution companies European public energy association European chemical industry association Common energy policy association of European coal producers Committee on Energy, Research and Technology Compagnie franc;:aise de Methane Interministerial Committee on Economic Planning Confederation of Independent States Conference on Security and Cooperation in Europe Direction des relations economiques exterieures European Bank for Reconstruction and Development European Court of Justice European Coal and Steel Community European Defence Community European Environmental Agency European Economic Community European Investment Bank Economic and Monetary Union Ente nazionale idrocarburi European Parliament European Political Community European employees' association European Union European Atomic Energy Community European oil producers' association European association of nuclear industry International Atomic Energy Agency International Energy Agency Internal Energy Market European general industry association

xu

IMF IPPC IRI MMC mtoe NEPP Of gas OPEC PHARE

RECHAR SAVE SEA SNGSO TACIS TEU UNCED

UNICE

List of Abbreviations Xlll

International Monetary Fund Integrated Pollution Prevention and Control Istituto riconstruzione industriale Monopolies and Merger Commission million tons of oil equivalent National Environmental Policy Plan Office of Gas Supply Organisation of Petroleum Exporting Countries Pologne-Hongrie: Assistance a la Reconstruction Economique E U Coal restructuring programme Specific Actions for Vigorous Energy Efficiency Single European Act Societe Nationale de Gaz de Sud-Ouest EU programme for upgrading nuclear sector in the CIS Treaty on European Union United Nations Conference on Environment and Development European employers' association