Energy policy contains 4 objectives, not 3 or 5

EU project team mtg 1 nov14

European Union energy policy contains four objectives, not three or five. But sit through any high-level speech these days – such as those by Šefčovič and Arias Cañete due Monday (event link) – and more likely than not you will hear the opposite claimed.

In the new mandate, an “energy union” of five “pillars” could soon replace the former “energy triangle” of three “corners” (though the later idea is unlikely to die easily). Such a move is only a recipe for more chaos, confusion and delay.

If not fixed, it will only slow our recovery from the neglect and incompetence of the Barroso-Oettinger years. The resolution of real-world situations such as pollution into the sky and billions cash exiting our borders to buy ever more fuel will only stall.

EU energy policy in fact contains four objectives, laid out in the Treaty as follows:

Article 194
1. In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States, to:

  (a) ensure the functioning of the energy market; 
  (b) ensure security of energy supply in the Union; 
  (c) promote energy efficiency and energy saving and the
development of new and renewable forms of energy; and

  (d) promote the interconnection of energy networks.
(EurLex source)

To get things done, we must avoid what is fashionable, vague or convenient for what is specific and known. To get things done, we also need to have a basic text common to all Union institutions rather than many different ad hoc texts in each. The treaties and existing legislation (the acquis) provide this. Courts cannot settle disputes on the basis on speeches or political declarations. Our Union is a union built on the rule of law already. Another new gimmicky union risks only to distract from the original authentic one.

So to help untangle the plate of cold spaghetti in front of us, I’ve quickly made the table below. It aims to summarise the different strands of the present debate, anchored in our treaty framework. I’m sure it could be improved and certainly it can be argued over. But it done quickly to share ahead of the Monday “energy union” launch conference (and thus this post at 11am Saturday).

Please let me know what you think, e.g. what if any changes would you make?

EU energy objectives

 Click to enlarge. Also >> A4 PDF version.

Jean-Claude’s Method

Day 2

Here’s the leaked memorandum on the working methods of the new Commission, circulated by Jean-Claude Juncker to other Commissioners on Wednesday.

At 38 pages, including five annexes, there no doubt plenty here for policy people across Brussels and beyond to get their teeth into.

In the introduction, the President’s “guidelines” (word taken from treaties) are referred to as “rules”, which is a rather interesting slight of hand by the SG.

Moreover, such a memo requires no change to or re-examination of the EC’s formal procedural rules (EurLex) and so the College’s choice of secret voting and secret minutes continues. (See my 9 September blog.)

Probably more to come back to and discuss when I’ve read the doc fully.

–oo0oo–

New College, old rules

new college STR

The new European Commission so far has no plans to change its procedural rules, according to an official reply from the secretariat general on 22 October (copied below).

Making his portfolio allocations eight weeks ago, President Juncker announced five project teams each led by a vice-president who, he said, would control access to the College agenda in their respective areas.

However how this system will work appears, on the first working day of the new Commission, still not to have been written down anywhere. Why not?

While it’s fair to allow any new team time to settle down when taking office, Juncker was confirmed as the incoming EC president more than three months ago (15 July).

He (and Catherine Day, the nine-years-in-office EC secretary general) ought by now to have some plan as to how they proprose their new new system will work. Do they? And how long before we (and the College members themselves) find out?

MY REQUEST

From: Mark Johnston
Sent: Wednesday, October 22, 2014 3:10 PM
To: SG ACCES DOCUMENTS
Subject: Access to documents: EC Rules of Procedure
dear Secretary General,
Application for access to documents: EC Rules of Procedure
Please provide public access to all documents containing proposals to change the European Commission’s rules of procedure currently in force.
Thank you in advance.
Kind regards,
Mark Johnston

SG REPLY

From: <SG-GREFFE-ACCES-DOC@ec.europa.eu>
Date: 22 October 2014 17:30
Subject: FW: Access to documents: EC Rules of Procedure — Ref. Gestdem 2014/4911 To: mark.johnston.esq@gmail.com

Dear Mr. Johnston,
Thank you for your e-mail, requesting access to documents under Regulation No 1049/2001 regarding public access to European Parliament, Council and Commission documents.Currently, there is no document containing proposals for changes to the Commission’s rules of procedure in force.
Yours sincerely,

For the Registry Director
Martine DEPREZ
European Commission
Secretariat General/Head of Unit SG.A.1 (Registry)

The guardians have failed us

The-Muppet-Show

Hinkley Point is decided. The so-called guardians of EU law failed us, the single energy market broken, the rule of law diminished, and Europe’s so-called “energy union” still born. If we’re lucky it will take us five maybe ten years to recover from the Hinkley scandal. If we’re unlucky, then never.

Annulment?

Austria has said it will seek an ECJ annulment while three other states have said they are considering to join too. Perhaps the Court will apply EU single market rules where the Commission lacked the guts to do so, though its recent record is patchy. The Luxembourg process will take 1-2 years which provides time for others to recover their senses and potentially a change of UK government next May. The legal issues I’ll return to after EC’s text is out except to say here the applicants have a good case based on the fundamental legal principles at stake.

Farage fear fever

So what’s the context for this car crash? Whether it be more efficient vacuum cleaners or massive nuclear subsidies, it seems everyone is scared of the tyranny of UKIP and its ring-leader Nigel Farage.

This week Cameron has finally been reduced to gibberish, saying he will give Europe “a last chance” to reform even before the UK has said what reforms it wants. Huh? If the UK’s unspecified demands are not met, Cameron says he will vote for an EU exit in a 2017 UK referendum. Panicking or what?

Faced with this growing Brexit fever, up on the Berlaymont bridge Captain Catherine Day ordered the guardians to roll-over, put aside the rule of law and say to the UK it can burn its citizens money on a vanity project that in cash terms out-sizes the Channel tunnel.

Claims by VPs Almunia and Oettinger that the EC decision, to be published in the Official Journal Lex series, still does not create legal precedent are hard to reconcile with every other non-EC commentator (and some inside the EC) who take the opposite view.

By allowing Farage to hold Cameron and Day hostage, what exactly are we getting in return?

Commission wreckage

ENER, CLIMA and ENV are nominally the lead teams on the internal market and environmental protection (competences the Union shares with national administrations).

But it seems these services were ambushed by an unholy coalition of SG, SJ and COMP leaderships, reversing the initial grave scepticism tabled by the Commission at the end of 2013. On the final act, reducing the inter-service consultation (ISC) from three weeks to three days and hiding the process behind the EP Juncker hearings were key elements in Day’s manipulation.

What does all this mean for the effective functioning of the Commission in the future remains to be seen. Nothing will change much so long as Captain Day remains on the bridge (almost nine years in the job and counting). The incoming Juncker matrix will take months or perhaps years to find its equilibrium, so centre of power remains with SG. (Perhaps the matrix was even designed for that purpose?)

On Tuesday this week, DG ENER held a rapidly-organised event both to say ‘goodbye’ to Oettinger and formally to confirm Brussels worst kept secret that the internal energy market will not be “complete” by the end of this year. After speaking in favour of the single market, Oettinger then went on to admit he’d voted against it, underlining the extent to which his disparate services in Rue De Mot and Luxembourg have been left high and dry by the centralisation of power in the Berlaymont.

And so to new guardians?

Will Šefčovič and Arias Cañete et al be the best guys to help us recover from the Hinkley Point wreckage? That’s a discussion for another day.

-oo0oo-

It’s not fair to single out Bratušek

Bratusek

Bratušek’s “grilling”  just ended. It became painful to watch and outside of her prepared statements not a word in any language other than Slovenian.

Let’s say I think her chances of survival are a good way below 50%. But I also think it is not fair only to blame her for problems that already exist elsewhere and pre-date her portfolio designation just two weeks ago.

“Energy union” as a concept was first raised only in March, by PL PM Donald Tusk, shortly after the Ukrainian crisis deteriorated. There are already many different and competing concepts in circulation, most are vague and many folks are reasonably asking what exactly does it mean?

The original Polish 9-page plan is the most detailed, albeit containing some elements certain not to gain consensus or even majority support elsewhere (e.g. “rehabilitation of coal” and collective buying).

Others (esp. Van Rompuy, Juncker, EUCO) got around these “known unknowns” by diluting the Polish prescriptions, adding a parallel emphasis on climate change and concluding privately that someone somewhere would fill-in the gaps later.

Which left Bratušek in a tight and lonely spot today. To expect her to arrive, from a standing start, in only two weeks, with a plan and strategy all worked out was not going to happen. The mix of domestic and group politics only made things worse.

If I were in her chair today, with my >10 years knowledge and experience of this stuff, I know I could not be in a position to make any policy promises simply because the power to act on energy (per se) in Europe is already weak and diffuse and has been so for a long time.

The only thing anyone could really do new in such a position is to describe the dilemmas out there, the achievements to date, the balances that need to be struck, and appeal for the cooperation and coming together of everyone to get more stuff done; within and among the institutions, and among countries, citizens and companies in Europe. Strategy comes incrementally. Previous energy commissioners took time to settle in.

Bratušek said, too often, that energy mix is a national competence. This claim is an unhelpful mis-reading of the treaties, endemic in the Commission and elsewhere. It’s not her fault if she was badly briefed by others who ought to know better.

Theoretically, she could have mentioned some new ideas e.g. treaty change to rectify the energy chapter weaknesses (see my earlier suggestion) but as treaty change is such a political hot potato, such a radical move would have needed more confidence.

Bratušek aside, European energy policies today are in a mess and has been for some time. For five years Oettinger has failed to provide leadership and structure, to draw diffuse interests together, and consequently all around him are pitching things in different directions beyond his ability to control and go forward. I’ve said for some time that it will take years to get over the Oettinger-Barroso years. I think that stronger now than ever.

The governance of European energy systems relies on several chapters of the treaties. Energy (Art 194) is the youngest and weakest of all of them. Our progress on energy in Europe (integration, innovation, interconnection, lessening demand and lowering pollution) to date has relied more on other chapters, especially internal market, competition and environment and all this over decades of slow but steady work.

If the EU’s constitutional set-up remains weak, and Council delegations (member states) especially remain reluctant to cooperate or integrate further, there is naturally a limit to what European institutions, faced with certain vetoes, and armed only with democracy and majority voting can actually realise.

Someone once said we get the politicians we deserve. After the blood on the carpet is cleared up, can we get back to work?

–oo0oo–

 

DG Competition has lost the argument on HPC

0923_bschools_GMAT_970-630x420

DG Competition has lost any rational argument on the Hinkley Point C (HPC) state aid case. If approved, the UK gov’t deal would allow around €20 billion subsidy over next 45 years for two new nuclear power plants in south-west England.

Reading the draft decision, on which the college of Commissioners may vote next week, it is clear that single market and competition rules, environmental protection goals, and even general treaty principles such as consistency and continuity have all been set aside. Changes to the original plan (reported in the FT this morning) are largely cosmetic.

Instead COMP’s argument for allow the aid to go ahead relies on 1950s Soviet-styled Euratom treaty provisions, as if they presented some kind of get-out-of-jail-free card for an expensive failing technology to be pulled from a dusty top shelf when desperate means are called for. Spineless anonymous officials in BERL and MADOU buildings find it easier to fudge and fillet OUR law than to do their jobs properly.

This is a tragic state of affairs. In a week when new Commission candidates proudly preen their common-interest ideals before Parliament, over on the other side of the Maalbeek valley, competition control, one of the most powerful Commission functions and a cornerstone of the single market, looks about to turned over to internal intellectual corruption and external political bullying, with the occupants of BERL top floor calling the shots. Barroso’s legacy takes another tumble.

The Lowe principle

Compatible state aid can only be “necessary, proportionate and time-limited“, the recently-retired EC director-general Philip Lowe told a hundred Brussels audiences in recent years. The draft Hinkley Point decision describes none of these. Instead we see the opposite: weak analysis based on vague concepts outside the law such as “de-carbonisation”, whatever that means. Creeping regulatory and governance failure is allowing industry players such as EDF to milk policy and rule-making to their own advantage.

If using state aid control Europe can shut-down ship-yards and airlines in Poland and Greece that are shedding cash, why not the bankrupt nuclear power sector too? If after due process etc. Apple or Fiat can be required to pay their proper taxes in Ireland or Italy, why can’t nuclear operators pay in full for their radioactive waste too?

Euratom, strong or weak?

Euratom is seen by many as a skeleton hidden away in Europe’s constitutional cupboard. The Euratom treaty sits alongside the two Union treaties; the Euratom legal personality sits alongside the Union’s legal personality. Euratom, unchanged since 1957, continues its zombie existence because member states cannot agree by consensus what to do with it.

Any potential court challenge to a Hinkley precedent will rely on a close reading of its provisions. In the draft, the Commission (COMP & SJ) essentially pretend Euratom is strong, providing carte blanche for any amount of effort to accelerate “the speedy establishment and growth of nuclear industries“, as its Article 1 announces so dramatically.

In reality, Euratom is much weaker than it seems at first sight, because Article 2 confines the scope of its application only to provisions actually in the treaty, which when you read them is not that much. As I’ve said before here, Chapter 4 on “investments” is only about monitoring activities and fantasy scenarios.

Does Almunia want this? Does he care?

It’s the end of term. Retiring Commissioners and their staffers are all de-mob happy, with one eye (at least) on their next assignments. I spent a couple of hours with Almunia last week at an unrelated event where he raised the HPC case himself in conversation. It’s obviously on his mind. (“One more big case before I leave.”) What was noticeable in his tone was that he did seem to want to win the decision and he even showed some reluctance to be in the position he was. The 13th floor again?

In the club, so follow the rules

Is this all about Britain? Probably. The majority of Brits, including most in government and most in the media, still have no idea what Europe is about and what it is for. It’s no surprise they think they want to quit.

The country has spent the last 13 years getting wound-up about its nuclear wet dreams. Most of the people running policy today were not there at the beginning and have forgotten all the history in between. Tony Blair, who kicked things off in June 2001, newly return to his second term, has since been replaced by two prime ministers and one change of government. The political appreciation of the global climate crisis has gone through many hues in that time, both in London and everywhere else.

On Europe, the principle applying to the UK and all member states ought to be simple; if one’s in a club, one follow the rules; if one’s not in a club, one can do whatever one wants. Being in the club but then breaking the rules is the worst of all outcomes, because other members and the club’s officials (the institutions) become corrupted by the same intellectual detritus.

The UK nominally calls for reform in Europe but in reality it first fails to define reform positions and then it drag us down because it doesn’t understand or believe that fundamentally Europe is a place where we solve common challenges together. Sorry to repeat myself but the rule of law beats the rule of war.

Democracy wins?

I may be angry but I’m not despondent. What happens in the next five days could still surprise us. First, there could be a delay; other commissioners will not appreciate Almunia bouncing them into a wrecking precedent with long-lasting implications.

Second, as more Commissioner realise what is at stake (end of single market, damage to rule of law, weaker climate protection) more of them will rally against it. If a meaningful Europe itself is on the line here, a critical mass of commissioners could emerge at least to delay if not to resolve. Surely a new nuclear subsidy regime in Europe at least deserves a public debate, doesn’t it?

A revolt in the College happened at least once before in recent times. In July 2010, where (again) Barroso and Almunia, faced losing a vote over eight more years of coal subsidies, caved-in and accepted to table a legislative proposal to end coal aid in only half that time.

Even though the anti-democrat Barroso hates voting, the College decides by simple majority (Article 250) and has voted once already on a state aid file this year. Even before any Court actions are considered, we could still be in for some surprises.

–oo0oo–

Before you ask, NO, I’m not going to share my leaked draft. COMP, SJ and SG were so proud and confident of their work they only sent limited numbers of marked copies to other services. This means sharing copies widely could easily reveal sources to those people who don’t want you to know what they are doing in your name.