No C 75/20 Official Journal of the European Communities 26. 3. 90 
Opinion on the proposal for a Council Directive on the transit of natural gas through the 
major systems (l) 
(90/C 75/05) 
On 25 September 1989 the Council decided to consult the Economic and Social Committee, 
under Article 100A of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The Section for Energy, Nuclear Questions and Research, which was responsible for preparing 
the Committee's work on the subject, adopted its Opinion on 1 December 1989. (rapporteur: 
Mr Frandi). 
At its 273rd plenary session (meeting of 31 January 1990), the Economic and Social Committee 
adopted the following Opinion nem. con. with 4 abstentions. 
1. General comments 2. General comments on the communication 
1.1. The Committee regards this Opinion as a suit­
able opportunity to comment both on the proposal for 
a Directive (Council Directive on the transit of natural 
gas through the major systems) on which it has been 
formally consulted and on the communication 
'Towards the completion of the Internal Market for 
natural gas', to which the proposal is appended. 
1.2. The Committee cannot give valid views on the 
common carrier question until the Commission has 
completed its cost-benefit analysis of the system and 
issued a concrete proposal on the subject. 
1.3. The stated aim of the communication is to 
achieve a more open market for gas, with greater com­
petition both in the gas industry and 'gas to gas'. The 
Commission is proposing a three-stage approach: 
— adoption of a Directive establishing arrangements 
for the application of transit rights between Com­
munity gas companies in the EC high-pressure grid, 
— establishment of a consultation procedure for all 
concerned, to define conditions under which it 
would be possible to give third parties (notably 
public distributors and/or industrial consumers) 
more general access to transport systems, 
— promoting the Community dimension in gas trans­
mission investments. 
1.4. The Commission has submitted a separate pro­
posal for a Regulation (2) on the third of these stages; 
this proposal has been referred to the Committee for 
Opinion and will be the subject of a separate Opinion. 
(!) OJ No C 247, 28. 9. 1989, p. 6. 
(2) OJ No C 250, 3. 10. 1989, p. 5. 2.1. The Committee stresses that, whilst pursuing 
the aim of establishing a Single Market in the gas 
sector, care must nevertheless be taken to ensure that 
investment and security of supply are not adversely 
affected by the higher risks associated with the special 
nature of the market in natural gas. 
2.2. Technical constraints (daily and seasonal peaks 
in consumption) in this market necessitate a complex 
system involving various types of infrastructure in order 
to meet transmission and storage requirements. These 
are basic features of the grid and account for the bulk 
of costs. 
2.3. It should not be forgotten that exploration and 
operational costs are so high that the handful of oper­
ators in this area normally set up consortia. 
2.4. Careful consideration should also be given to 
the implications in terms of safety and cost of the 
proposed natural gas supply system, including the com­
mon carrier option (bearing in mind that the Com­
munity is dependent on non-EC countries for 40% 
of its natural gas requirements), as all categories of 
consumer could be affected. 
2.5. It is worth pointing out here that the nature of 
the natural gas supply network and the size of invest­
ments require long-term agreements between gas com­
panies and consumers to guarantee that investments (in 
the various stages of production, transport, trans­
mission and storage) break even. Investments are 
usually obtained from the international market. 
2.6. With this proviso, the Committee welcomes the 
Commission's drive to implement a comprehensive 
strategy to create a single energy market. 
26. 3. 90 Official Journal of the European Communities No C 75/21 
2.7. Although in principle the Committee has no 
intention of challenging the claim that an open, flexible 
supply system is more likely to be beneficial than other­
wise, it feels that, in the light of the above consider­
ations, the detailed studies planned by the Commission 
into all relevant factors—both positive and negative— 
should be finally completed. 
2.8. The same request was also made in the infor­
mation report of the Section for Energy, Nuclear Ques­
tions and Research on Community energy policy and 
completion of the Internal Market which stated that: 
'In order to guarantee reliability of supplies and 
profitability of investments, the Commission should 
carry out a detailed investigation into the problem 
of exclusive concessions for the transport of natural 
gas existing alongside third-party consumer access 
to gas networks (common carrier system) or special 
exchange arrangements.' 
2.9. It must also be remembered that the inter­
national market is in the hands of a small oligopoly of 
producers. This means that a small circle of producers 
might be the only ones to benefit from an increase in 
the number of buyers. On the other hand, it should be 
borne in mind that greater competition could mean 
more efficient and rational use of existing natural gas 
transmission and distribution systems, which would 
have a positive effect on costs and consumer prices. 
2.10. A specific point should therefore be included 
to give as clear a definition as possible of the term 
'third party' and determine the evidence of reliability 
needed to guarantee stability and continuity. 
2.11. Serious consideration should be given to the 
need to further integrate the transmission and storage 
system at Community level. Arrangements for drawing 
up contracts and ensuring transparency—possibly 
involving negotiation by supply consortia, transmission 
companies and major EEC consumers, under the terms 
of Community law—should also be studied in more 
depth. The proposals contained in Part III (a step-by-
step approach to the problem) are tempered by the need 
to exercise caution, in view of the complexity of the 
subject. As a result, the Commission is merely propos­
ing a draft Directive on transit for the time being, while 
indicating that the question of third-party access needs 
to be studied more closely. 2.12. To this end the Commission proposes setting 
up a representative body of organizations responsible 
for studying transit conditions, and two consultative 
committees to examine third-party access. The struc­
ture and composition of the proposed bodies will have 
to be discussed in more detail before the proposals can 
be accepted. 
2.13. In spite of its reservations, the Committee 
endorses the Commission's step-by-step approach to 
opening up the Community market in natural gas, 
outlined in Part III of the communication. 
2.14. Nevertheless, the draft Directive, which is the 
first stage in this process, raises many questions; the 
Committee would therefore suggest a number of 
changes and additions to the text (see below). 
3. Specific comments on the draft Directive 
3.1. Article 2(1) 
3.1.1. The proposed Directive aims to introduce the 
measures required to ensure free circulation of natural 
gas across national frontiers, with a view to consolidat­
ing integration of the European gas market. Article 2(1) 
should therefore be reworded to make this clear: 
'All transmission of natural gas between Member 
States under the following conditions shall consti­
tute transit of natural gas through transmission 
grids within the meaning of this Directive: (...)'. 
3.2. Article 2(1 )(b) 
3.2.1. The wording of this clause, which refers to 
Member States' gas companies, could give rise to con­
fusion by giving the impression that the scope of the 
proposed Directive is confined to the transmission of 
natural gas between national (or regional) public gas 
companies. 
3.2.2. Admittedly, in most Member States gas com­
panies are entirely state-owned. However, other Mem­
ber States (Belgium and the Netherlands) have semi-
public companies and in the United Kingdom and West 
Germany gas companies are privately owned. 
3.2.3. It is therefore proposed that this clause be 
reworded to read: 
'b) the transport is carried out between gas com­
panies in the Member States.' 
3.3. Article 3(2) 
3.3.1. The Committee does not see why requests for 
transit should in all cases, including those where an 
No C 75/22 Official Journal of-the European Communities 26. 3. 90 
agreement could be reached between the entities respon­
sible for the networks concerned, first be communicated 
to the Commission and the competent national author­
ities. 
3.3.2. To avoid unnecessary red tape, the Committee 
would suggest that notification of requests be limited 
to cases where agreement cannot be reached in the 
twelve-month period laid down by the Directive, so 
that recourse can be had to the procedures provided 
for in Article 4. In other cases, 'a posteriori' notification 
should be enough to guarantee the necessary trans­
parency. 
3.4. Article 3(2), third indent 
3.4.1. The following additions should be made to 
the third indent: 
'(...) payment for transit must take account of plant 
depreciation, operating costs resulting from 
responsibilities (...) quality of service, as well as 
allowing for a fair profit;' 
3.5. Article 5 
3.5.1. The Committee questions the relevance of the 
proposed Article 5 which is merely a 'declaration of 
intent' by the Commission to frame supplementary 
proposals to the Council at a later stage, as far as it is 
necessary, on the detailed rules of intra-Community 
transit. 
3.5.2. In addition, the Committee finds Article 5 
inappropriate since it could imply that the proposed 
Directive is an initial step designed to culminate auto­
matically and more or less surreptitiously in the intro­
duction of a system of third-party access to the Com­
munity natural gas grid ('common carrier'). 
3.5.3. The Committee is convinced—as is the Com­
mission, which states its intention of implementing 
appropriate procedures to this effectof the need to carry 
out detailed studies on the matter and conduct extensive 
Done at Brussels, 31 January 1990. consultations with all the economic and social groups 
concerned. 
3.5.4. The Committee therefore recommends the 
deletion of Article 5 along with the final recital (which 
relates to this Article) and the removal from the last 
but one recital of the following phrase: 
'(...) in order to realize this first stage of the internal 
energy market in satisfactory competitive con­
ditions, (...).' 
3.6. The Communication states that the Commission 
intends to set up a representative body of organizations 
responsible for the high-pressure networks, to assist 
with the implementation of the Directive. This body 
will have two tasks (see pp. 13/14 — point 21 — of the 
communication for further details), viz.: 
— to assist the Commission in studying the arrange­
ments for increased access to transit, 
— in the event of difficulty, to secure agreement, by 
conciliation, between the networks concerned on 
transit operations which are in the Community 
interest. 
3.6.1. The Committee is most surprised that the draft 
Directive includes no reference either to the proposed 
body or to the role the Commission wishes it to play 
in the draft Directive's implementation. 
3.6.2. The Committee urges the Commission and the 
Council to remedy this serious shortcoming so as to 
confer on this body (which has its full endorsement) 
the recognition and authority it requires in order to 
carry out its future tasks vis-a-vis the various entities 
responsible for the major networks and vis-a-vis the 
relevant national authorities of the Member States. The 
following Article should therefore be added to the draft 
Directive: 
'A representative body of organizations responsible 
for high-pressure networks is to be set up to assist 
the Commission in implementing the Directive.' 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE