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Sunday, May 25, 2008

EU administration 04 or how Shell turned out more responsible than EU

In today's post:
  • Shell backs carbon pricing in 2050 energy scenario
  • EU sees 'huge scope for cooperation' with Central Asia
  • Why energy must be at the core of EU security thinking
  • France in renewed push for EU-wide corporate tax
  • EU raps Germany over Volkswagen law
My over-all comment: Interestingly that Shell, a company, is more socially responsible than the whole EU. That's about the second article. As for the others, well, I liked the third, because it's what I think too on energy in Europe. I hope soon enough people will get it that trade cannot be done on dependency-it needs equal partners getting equal benefits. And Russia is much more reliable than some Asiatic republics.

Shell backs carbon pricing in 2050 energy scenario

8 April 2008

In the context of soaring global energy demand, demographic pressures, fossil fuel supply constraints and environmental degradation, Shell has come out in favour of a 'new coalition of interests' in support of less energy-intensive development.

Big oil companies usually refrain from commenting on future energy supplies. But some are now starting to signal that oil reserves are declining fast. In a 2006 campaign, Chevron said: "It took us 125 years to use the first trillion barrels of oil. We'll use the next trillion in 30."

A report released by the International Energy Agency (IEA) last year warned that the world will face an oil "supply crunch" within the next five years (EurActiv 10/07/07).

In its last Global Scenario, released in 2005, Shell highlighted the methodology and planning needed to address the challenges of increasing demand for fossil fuels and tightening state control over supplies of hydrocarbons.

With energy demand set to double by 2050 while supplies decrease and pressures on the environment grow, Shell has presented two alternative scenarios that outline a global response to these three 'hard truths'.

'Scramble' versus 'blueprint'

The first and more pessimistic 'scramble' scenario is characterised by a 'flight to coal' and nationalisation of energy resources in the context of increasing global competition for energy supplies.

In this scenario, "demand-side policy is not pursued meaningfully until supply limitations are acute. Likewise, environmental policy is not seriously addressed until major climate events stimulate political responses," according to Shell.

An alternative and more optimistic 'blueprint' scenario, favoured by Shell, would be more pre-emptive and feature greater global co-operation between governments and the private sector.

A CO2 pricing mechanism accompanied by a functioning global carbon market would be a key feature of the blueprint scenario, as this would drive sustainable development in other areas, notably renewable energies and carbon capture and storage (CCS) technologies, which Shell considers fundamental for providing 'clean' energy from fossil fuels.

The company's decision to back one scenario over another for the first time in its history "is not altruistic," according to Jeremy Bentham, Shell's Vice President for the Global Business Environment.

Shell says it is looking for a favourable and stable investment climate amid concerns that under the scramble scenario "the whole [energy] system will derail," said Jeroen van der Veer, the company's chief executive.

In the blueprint scenario, global CO2 emissions would be capped by 2020 and subsequently begin to decline to 2000 levels by 2050, according to Bentham, who believes this timeframe to be "realistic for achieving a global consensus on a meaningful set of agreements" to harmonise key energy systems.

If the blueprint scenario is not realised, necessary investments in the energy sector will be impeded, he warned.

Javier Solana, the EU's High Representative for the Common Foreign and Security Policy, warned during the conference that the EU is facing a "very important financial problem" in providing the funds necessary to stimulate more clean energy developments.
"We don't have the amount of investment necessary at our disposal," he said.

Commenting on the issue of rising energy demand, Fatih Birol, the International Energy Agency's (IEA) chief economist, pointed to a "new story" in which rising energy prices no longer have a downward pressure on demand.

During previous oil supply disruptions (notably in the early 1970s and late 1980s) characterised by increases of $40 per barrel of crude oil, global fuel demand declined by 3% to 4%. But the current spike in oil prices has been accompanied by a 4% increase in demand, an unprecedented situation that points to the "end of price elasticity," according to Birol, who questioned the Commission's assumption that rising energy prices strengthen energy demand reduction policies.

Green MEP Claude Turmes generally spoke in favour of Shell's blueprint scenario, but questioned the extent to which CCS technologies could be relied upon to provide cleaner fossil fuel alternatives.source

My comment: That's what I'm talking about! Not altruism but INSIGHT! If one has the courage to look into the future and see what lies ahead of us, he/she would know the way we should act. Not cowarding behind lack of finances and lack of will and fear from loosing industries. The industries come and go according to the needs of time, but people are what is the driving force of everything. And if people are dead or on the brink of extinction, there would be no industry, not economy and certainly no market. Unless we count the market of death for a market. Even though I don't the exact reason for this statement of Shell, I hope it will make companies reconsider their approach toward their "market".

EU sees 'huge scope for cooperation' with Central Asia

11 April 2008

A high-profile European Union delegation held meetings with the foreign ministers of the five Central Asian states in the Turkmen capital, Ashgabat, on 9-10 April. The two-day talks focused on the implementation of the EU-Central Asia strategy adopted nearly a year ago and touched upon energy issues and human rights.

The EU troika visiting Central Asia was headed by Slovenian Foreign Minister Dimitrij Rupel and included External Relations Commissioner Benita Ferrero-Waldner and French Foreign Minister Bernard Kouchner, who is representing the EU's next presidency. Ferrero-Waldner expressed confidence that the talks with the foreign ministers of Turkmenistan, Kazakhstan, Uzbekistan, Tajikistan, and Kyrgyzstan will boost cooperation between the EU and Central Asian countries.

"There is a huge scope for cooperation, and our relations are growing rapidly now," she said. "We will take concrete and practical steps to develop initiatives in the area of education but also the rule of law."

Speaking to RFE/RL from Ashgabat, Ferrero-Waldner insisted that Central Asia is becoming an increasingly important energy partner for the European bloc.

"Central Asia is a key partner in the energy market and [there is] a huge potential here," she said. "But we are also stepping up our cooperation on the renewable energies, which is another important topic between us. And, of course, [we are talking] about diversifying our supply routes and the diversification of export routes."

The region is key to Europe's ambition to diversify its energy supplies, which are currently heavily dependent on Russia. Kazakhstan, Turkmenistan, and Uzbekistan are home to some of the world's biggest oil and gas reserves. But human rights groups are urging the EU to seize the opportunity to put pressure on Central Asian governments over human rights.

"Human rights are, indeed, a very important part for us [in] our external relations, and therefore we really want to see an even better commitment," Ferrero-Waldner said. "Of course, we are aware of different historical and cultural contexts in Central Asia when compared to the European Union and that reforms in the area of democratisation, rule of law, and human rights will take a certain time." source

My comment: That's ridiculous. I really don't understand that absurd drive of EU to run away from Russia. I mean, with what Turkmenistan is better or more reliable than Russia? Except that it's smaller and more dependent. Trade should be between equal. And what the fuck means EU is aware of the historical differences? Because for me, this means, it's ok to not care about human rights as long as you provide us with gas. Totally not ok!

Why energy must be at the core of EU security thinking

7 April 2008
Jozias Van Aartsen, Former Dutch foreign minister

"Europe must respond to the growing assertiveness of energy-producing countries with a much more coherent strategy of its own," writes Jozias Van Aartsen, a former Dutch foreign minister, in a March article for Europe's World.

This new policy will have to "reach beyond the EU's borders into south-east Europe, the Caucasus, the Middle East and north Africa," argues the author.

Van Aartsen notes that that "no democracy can be truly sovereign unless, broadly, it enjoys independence in energy," going on to claim that "many European countries fail to provide affordable energy to their citizens, leading to preventable deaths, mostly from cold in winter, economic losses and sometimes even political turmoil".

The solution, believes Van Aartsen, lies in a "collective effort to improve the situation". The long-term goal should be to "develop an integrated market stretching from Europe to central Asia, the Middle East and north Africa," he argues.

The objective is "not just to make connections between the EU and major energy producers in this region," but also to "develop long-term energy security in order to promote industrial development, economic expansion and political stability in partner countries".

In order to achieve these aims, countries would have to be "willing to integrate their energy markets and tackle problems from a common perspective, rather than every state looking after itself," Van Aartsen says. "They would also have to make basic commitments to democratic values," he adds, citing the European Energy Community, which "groups the EU with former Yugoslavian states and Albania that are still outside the Union," as an example of this.

An invigorated energy community, argues the author, could "become a new zone of international prosperity" and a "vehicle to extend peace and prosperity to an even greater number of states". Moreover, "it could provide a solid basis for increased investment, economic integration and political co-operation in non-energy areas," he adds.

On the thorny issue of EU-Russia energy relations, Van Aartsen claims "we have a chance today of engineering a win-win solution" because "whatever the headlines, the EU is stuck with Russia and Russia is stuck with the EU – neither has an alternative". The solution, he argues, is to find a way to depoliticise the relationship, ideally through a legal agreement, and maintain equitable investment relations in the energy sector.

Van Aartsen concludes that “the challenges of climate change increase the pressure on the Union to act". "The EU must accept that our neighbours' energy security is our own energy security," he argues, adding: "We must embrace interdependence and extend energy security guarantees to all our neighbours." source

My comment: SEE! My words! From an energy expert! Hopefully someone will listen for a difference.

France in renewed push for EU-wide corporate tax

9 April 2008

Economy Minister Christine Lagarde said she would push to introduce a common consolidated corporate tax when France takes over the EU Presidency in July this year.

"It has been going on for a long time, it's an issue that we are determined to push," Lagarde said on the margins of a tax forum organised by the European Commission on Monday (7 April).

The idea has received the backing of EU Taxation Commissioner Laszlo Kovacs, who said he would put forward the proposal in the autumn.

Under plans currently being considered by the Commission, businesses operating in several EU states would calculate their tax base according to a single EU-wide formula with profits re-distributed to countries in which the company has operations. The profits would then be consolidated – or re-allocated - according to a number of criteria determining the size of operations in each country: payroll, value of assets, sales, etc.

But smaller countries fear they could lose out under the "sales by destination" formula currently being examined by the Commission. Under the formula, taxes would be levied in the country where the sale is made instead of the country where the product is manufactured, resulting in losses of tax revenue for smaller EU nations.

The proposal, which has long been under consideration in Brussels, is certain to run into opposition from a number of countries, including the UK, Ireland and several newer EU member states which have a lower corporate tax base (EurActiv 11/04/07).

Under current EU rules, taxation issues need to attract the unanimous backing of all 27 member states in order to win approval.

The proposal, which was initially planned for the first half of 2008, was delayed due to fears that it might frustrate the ratification process of the Lisbon Treaty in Ireland, EU officials said.

But Kovacs has already made it clear that he would not allow the veto power of a few countries to block the project. In comments made a year ago, he said he would envisage, "as a last resort", going ahead with a pioneer group of states under the so-called 'enhanced co-operation' mechanism. This would allow a minimum of eight states to push forward with the initiative even if it were blocked by others. source

My comment: Good. Every move toward the Union is good. As long as it doesn't really hurt the members, but I don't see how this is going to seriously hurt any country. Because it will stimulate production from which we all will benefit. And I kind of don't understand the all-cost veto of Ireland. I mean, why?

EU raps Germany over Volkswagen law

11 April 2008

The German government has not done enough to abide by an EU Court ruling overturning a law that effectively protects Europe's largest car manufacturer from hostile takeovers, a Commission spokesperson said on 10 April, warning of further legal action.

The disputed law was ruled illegal by the European Court of Justice in October 2007, on the grounds that it went against the free movement of capital by restricting the opportunity for investors to participate in the company.

The law contained a number of provisions intended to guarantee the German federal government and the Land of Lower Saxony a lasting influence over Volkswagen, independently of the shares that they held. Notably, it stipulated that other shareholders cannot hold more than 20% of voting rights in the company even if they hold a higher proportion of its capital.

In January, the German government presented changes to the law, but failed to do away with a 20% blocking minority on decisions relating to large transactions, which means that resolutions can only be passed if they represent 80% of the shares – 5% more than foreseen under German law. The provision effectively allows Lower Saxony to block all resolutions and exercise full control over Volkswagen, even though it owns little more than a fifth of the company shares.

"They haven't fully complied with the court judgment," according to the Commission, which adds that the letter did not represent the start of a formal infringement procedure. Nevertheless, the Commissioner warns Germany that he reserves the right to take the government back to EU court if it fails to address the issue.

However, in a letter sent on 10 April, German Justice Minister Brigitte Zypries replied that she could not see how "the blocking minority hinders the free movement of capital".

The removal of the 20% blocking minority would come as a boon to Porsche, which has signalled its intention to raise its 31% share of Volkswagen to a majority holding – a move resisted by Lower Saxony.

In a parallel move, Germany's ruling coalition has opened the path to measures to block foreign state-controlled investments. The plan would create a German equivalent of the US Committee on Foreign Investments, which would be allowed to scrutinise acquisitions involving a stake of more than 25% of a German company by foreign sovereign wealth funds.

The move comes amid growing fears that these investment funds could be used by countries like China and Russia to obtain political influence in strategic sectors, such as energy and defence. The EU has also announced that it is working on a voluntary code of conduct, which it hopes will be agreed internationally (EurActiv 14/03/08). source

My comment: Ok, I don't know what to think on that. I'm not such a fan of free trade, so, I'm not very bothered, especially when we know what kind of impact has the industry on EU politics. But still it's weird that a province can hold the majority votes on a company. Right?

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