EU rethink on energy policy if new cartel formed

EUROPE would have to rethink its energy policy if Russia, Iran and Qatar go ahead with an OPEC-style cartel on natural gas, the European Commission has warned.

EU spokesman Ferran Tarradellas Espuny said the EU prefers to see gas traded on a free and transparent market. He said the EU executive was not opposed to energy suppliers cooperating more closely on research, but is opposed to price-fixing cartels in principle.

“If such a cartel was created, the Commission may review its energy policy,” he said, refusing to give details of what that would mean in real terms.

He said the EU also expected the three countries to inform it if they do form a cartel.

EU nations are already investing in alternative and cleaner energy sources like wind and solar power to meet future energy needs as part of efforts to combat climate change.

They are also considering building new nuclear power plants.

Russia, Iran and Qatar made the first serious move toward forming a cartel with a meeting last Tuesday. Together they account for 60% of the world’s gas reserves.

This raised fears in Europe that the cartel would boost Moscow’s use of energy as a political weapon shortly after it clashed with the West over its five-day war with Georgia in August.

Russia has previously cut EU pipeline supplies temporarily in disputes with neighbour Ukraine.

Concerned about its growing dependence on imported oil and gas, the EU is trying to widen its range of energy supplies and transport routes.

Nearly half its imported gas comes from Russia alone.

Iran, in its standoff with world powers over its nuclear program, has also threatened to choke off oil shipments through the Persian Gulf if it is attacked.

A gas cartel would allow them to set prices of natural gas — which now follow oil price highs and lows with a delay of several months. Such an alliance would have little direct impact on the United States, which imports virtually no natural gas from Russia or the other nations.

Less-polluting natural gas is becoming more widely used in Europe to generate power and heat as EU nations try to reduce their greenhouse gas emissions.


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