Spain Getting Nervous about Russia’s North African Adventures

You gotta love Antonio Brufau of Repsol – everything he says makes so much sense. Let’s see if the Europeans can get their act together. From the Financial Times:

Repsol chief calls for unified energy policy across EU By Carola Hoyos and Mark Mulligan The head of Spain’s biggest energy company has lambasted European politicians’ inability to formulate a unified energy policy. Antonio Brufau, executive chairman of Repsol, said yesterday Europe needed to consider energy as an integral part of its foreign policy. He criticised Europe’s lack of cohesion when dealing with powerful oil and gas producers such as Russia and Algeria. In an interview with the FT, he also said the European Union’s biofuels targets were misguided, and questioned Europe’s failure to develop a cross-border gas and electricity network. “In terms of energy, Europe is not advancing in the right direction,” he said. “We have to have one single voice, one single policy, one single market.” The fact that Germany negotiated bilaterally with Russia for gas showed that “Europe was failing”, he said.

He warned that the balance of power could tip in favour of energy producers if Europe failed to present a united front. “We have to look closely at the balance between national oil companies and international oil companies. Do [European] markets belong to Gazprom, or to the international oil companies of Europe?”Although individual companies still had to negotiate their own supply contracts, he said a common energy policy among European states would help set the framework for these negotiations. “If Europe spoke with one voice, then there would be more equilibrium between it and the producer countries.”Mr Brufau said this lack of unity was also reflected in EU directives on alternative energy sources, which often failed to draw on the experience of member states. Efforts by the EU to increase production of bioethanol, for example, were misguided, as it replaces gasoline, which is in surplus, but fails to tackle the shortage of diesel fuel. “If Europe produces bioethanol it will not reduce by one barrel its oil imports. If Europe produces biodiesel it will reduce its oil imports.”The Repsol head also questioned how much technical analysis had gone into Europe’s 20/20/20 target, which calls for 20 per cent of energy to come from renewable sources, and a 20 per cent improvement in efficiency by 2020. “Why not 22/18/17?” he asked, noting these issues needed to be treated scientifically rather than like “a game of bingo”.Carbon capture will be critical. But the system by which carbon is stored is still prohibitively expensive.Mr Brufau noted that the US was funding research on this issue with state money, but that Europe was refusing to do so. “Europe is already subsidising many things. The question is: should we be subsiding agriculture or new technologies?”