HOMf " 7 ENS’95 Conference Seminar on Sustainable Energy Production and Consumption, Stavanger, Norway, 23 August 1.995 NEI-NO—704 ENERGY CHARTER AS MEANS OF ACHIEVING SUSTAINABLE ENERGY PRODUCTION AND CONSUMPTION .RECEIVED Address by R.F.M. Lubbers, Minister of State, The Netherlands QQJ f b 193B OSTI The Conference on the European Energy Charter came to a conclusion on the 17th of December 1994 at Lisbon, where signators of the final act of the Conference of 50 states of the European Commission participated. On that occasion that final act was signed by 45 states and the European Commission, and the resulting Energy Charter Treaty, and its protocol on Energy efficiency and the related environmental aspects, were signed by 41 and 39 states, and of course by the European Commission. I am citing a document of the International Energy Agency by illuminating for those who are interested more in particular, about what is happening therespeaking about truce? ft A ATP I thought maybe it is better that I go back a little bit in history. From 1994 then come back of course to the future, to describe for you a little bit how it came to such an initiative. It was in the spring of 1990 that we had this very special situation, the end of thecold war, the end of communism, what was going to happen? And we, that is the members of the European Council, the European Community still at that time, not the European Union, were preparing a meeting iuDublin, in Ireland, in June that year, and I was one of the members. I got some reports being the Prime Minister, about the opinions of our German friends, our French friends and our British friends, and it was clear that there was a strange situation to that extent that everybody was enthusiastic and wrote to each other and said toeach other: we have to do something now to heal SSTflSBUTIOM DOCUMENT SS UNUMilED [email protected][btiS.DQCUMEMrjSJLlNIJMrn:n __ 1 DISCLAIMER Portions of this document may be illegible in electronic image products. Images are produced from the best available original document. Europe, tounite Europe, but how to do that, and there there were strong differences of opinions. I remember that President Mitterand supported to a certain extent by the Chancellor Helmut Kohl, was very much in favour of the credit instrument, which would involve large sums of money and finance them to make it possible for them to recover, sort of martial plan you could say. Margaret Thatcher, the British Prime Minister of that time, was very sceptical about this.Nonsense, and when she said nonsense, she meant nonsense. Helmut Kohl was basically at the side of President Mitterand but had his doubtsa little bit, and had of course his own agenda thinking ahead already about the relation to unification and of what kind of money that would be needed ,and what sort of deals to be made with the Russian authorities, would it be possible for them to achieve that. Anyhow, there was not a clear-cut decision of Jacques Delour,the President of the Commission. It was impossible for him to do because of thesedifferences, and then myself preparing myself for that meeting, it came to my mind as a former minister responsible for economy and energy, that maybe we could do something with the theme energy. Why that? There were several reasons for me to be thinking in that direction. I thought we need an instrument, an instrument for-real investments in the former Soviet Union. It is more important with real investments than financing investments. Anyway, we have to bring there the know-how. This will be for a certain period an economy in transition which will badly need know-how to give shape and substance to another form of economy. And I think maybe here we can give some form of textbooks, economists and money, but will that do the job, or will they need many skills of capacities,technical knowledge, and is that not very much related to real investments? 2 My second thought was thinking about real investments. I think that energy is a very goodone, because in our part of Europe those who are active in energy are able public companies or let us say market orientated companies,not just the national companies, but all those people working there have something in common, they realise that energy is just not another product, it is always done in a concept of a combination in order to be efficient according to the systematics of market economies. But at the very same time it is related to responsibilities of government, so they give it a certain room and space to do your business with the same special relationship always between business and government. So that could be attractive because the people there knowing that sort of business could convey more easily their knowledge, technological and managerial, how to run a company to that part of Europe. Another consideration, just the thinking about the economic potential, of the former Soviet empire. It was very clear from the outset that they had an enormous potential in energy, and that it could be attractive to explore that and to get the currency to finance other investments they needed. The final element in my personal analysis was that I knew a little bit from being in the field of energy that we needed an increase in production. I did not foresee'at that time the shrinkage so far of the Russian economy itself, but I thought it would be wiser for the European continent to be not too dependant from other continents, especially not from the OPEC countries in the future. So that was another motivation, the geopolitical consideration for the continent, I mean Europe as such. So I brought that together in a system, it was called the Energy Charter, Co-operation of the European States. But now I have to admit one of my mistakes as well. I saw it as such an enormous opportunity in 1990 that my thinking was going back to the very beginning of the 3 European community, and many of you know how it began after the second world war, for a political reason to avoid another war to start in Europe between France and Germany. After all there was where it all began, in ‘45 and later on when the six founding members, the Be-Ne-Lux, Italy, France and Germany went together. And really it started with the very first initiative with cold and still communiting because there was an analysis that was that of a strategic importance to organise to take the teeth out of the monster making war to each other, so to say. And I came to the conclusion that maybe we have to set up not identical, but a little bit similar an energy community, community in that sense that we have a still and cold community in order to be capable to realise things not only nice wordsand talksand say to each other: would it not be a nice idea to work together and so on, but togive institutionalconcrete form to this idea. Somy paper in Dublin was based on the consideration I’d just given to you, but an instrument suggested to see into the possibility of an energy community to heal, to unite Europe. At that time when I spoke about energy, it was real energy, not just oil and gas, I includedcoal, I included nuclear energy, very much for safety reasons and environmental reasons. I mean the whole discussion of the dependency of OPEC goes back for myself to 1973,first of all because at that particular period I was minister of the economic affairs, and the International Energy Agency we created in the spring of 1974 was just in order to have an answer to that. But all of you know that since then the ecological aspects have become more and more important. 1990 was in that sense also different from 1973, so the ecological and security considerations were important for me and also for that purpose I thought about setting upa community to be effective, but that was one bridge too far . Because what 4 proved not immediately in Dublin, but quickly after, that there was an enormous resistanceagainst that aspect of my proposal. Why? For several reasons. One of them was that at that very moment the European Commission had begun to become active in liberalising the market for oil and gas in Europe. That story which is going on still today started at that period. So it was totally contrary to experts in Brussels. Jacques Delors himself said OK, but what is the most important is the political concept that those people are active on energy. No my god, we are just liberalising the whole thing if in those sowonderful cooperations that Mr Lubbers is describing between business and government is a wrong sort of co-operation. We should open the windows and make it a market thing as such. And so said the large companies themselves as well. Not the national oil companies,my god, again this rat tapeof a community. But we thought we had overcome this, and more generally, all of us said this is triumph of market economy against plans economy, so the best we could do is a minimum of planning or no planning at all, let the market do the job. The three reasons against it, specialists in Brussels, multinationals and the general thinking in the market killed my idea immediately on that particular aspect.