LNG News Editor:
European Union ministers have been unable to find any common ground after they met in Luxembourg to find a way to control natural gas and LNG market prices and their effects on power markets, while the talks showed deep divergence between the 27 member states.
Germany, the Netherlands and Denmark and six other countries had signed a letter before the talks started saying that they could not back any reform conflicting with the natural gas and energy markets, including de-linking natural gas and LNG prices from the EU electricity markets.
Overhaul
Spain and France had called for a fundamental overhaul of gas-buying rules ahead of the Emergency Council of ministers that broke up on October 26 without a deal.
“There are many issues to be considered like who will pay for the costs of procuring and storing the natural gas and how the gas will be transport from the different regions,” said EU Energy Commissioner Kadri Simson at the end of the talks.
She added that joint natural gas purchasing was among a range of options the EU was looking at to make its gas market system more resilient.
“We will need to assess the advantages and the drawbacks of such a system,” added the Commissioner.
The ministers believed that the surge in natural gas prices was not expected to end soon with winter approaching and they discussed a set of short-term measures proposed by the Commission to help consumers and businesses during the market turbulence.
Those measures included tax cuts for small businesses put at risk by higher energy costs as well as social support for poorer households.
Market supporters
The Germans, the Danes and the Dutch were joined by Austria, Luxembourg, Ireland, Finland, Estonia and Latvia in signing a letter saying they believed higher prices were caused by the global economic recovery and not by the EU natural gas market design.
“A wholesale reform of the electricity market will not be a remedy to mitigate the current rising energy prices linked to fossil fuels markets,” they said.
The nine nations suggested that the EU should focus its efforts on promoting energy efficiency, investment in green energy and a 15 percent interconnection of the EU electricity market by 2030, which could save up to €40 billion ($46.4Bln) over time.
Most countries are already using subsidies and tax cuts to lower bills for consumers, though some EU countries want more fundamental reform to protect citizens from future events.
France and Spain had called for structural reform of EU energy markets while others had taken the stance that the crisis was temporary and did not require radical counter-measures.
“It is an especially important problem for Europe in the middle of the economic recovery, for which extraordinary solutions have to be found,’ stated Spanish Energy Minister Sara Aagesen Munoz.
The French in particular were upset by the rise in wholesale electricity prices linked to natural gas.
