Proposal for a COUNCIL DECISION repealing Council Decision 68/416/EEC on the conclusion and implementation of individual agreements between governments relating to the obligation of Member States to maintain minimum stocks of crude oil and/or petroleum products and Council Decision 77/706/EEC on the setting of a Community target for a reduction in the consumption of primary sources of energy in the event of difficulties in the supply of crude oil and petroleum products

(presented by the Commission)

EXPLANATORY MEMORANDUM

The Commission has put forward a proposal for a new Directive of the European Parliament and of the Council concerning the alignment of measures with regard to security of supply for petroleum products. More specifically, this proposal for a Directive provides for Member States' provisions on oil stocks and crisis measures to be more closely aligned with each other, and for coordinated action between the Member States in the event of a supply crisis.

The abovementioned proposal for a Directive consists of two parts:

- The first part defines the stockholding obligations and the criteria with which the security stock systems must comply.

- The second part covers aspects relating to the adoption of measures in a crisis situation, more especially the institutional mechanism for obtaining a coordinated response from the Member States in the event of a crisis.

In this situation, existing legislation on this subject is no longer relevant. The aim of this proposal for a Decision is therefore to repeal some of the texts concerned.

Proposal for a COUNCIL DECISION repealing Council Decision 68/416/EEC on the conclusion and implementation of individual agreements between governments relating to the obligation of Member States to maintain minimum stocks of crude oil and/or petroleum products and Council Decision 77/706/EEC on the setting of a Community target for a reduction in the consumption of primary sources of energy in the event of difficulties in the supply of crude oil and petroleum products

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 100 thereof,

Having regard to the proposal from the Commission, [1]

[1] OJ C [...], [...], p. [...].

Whereas :

(1) Directive ..../..../EC provides for the alignment of measures with regard to security of supply for petroleum products.

(2) More specifically, in order to ensure the proper functioning of the internal market, Directive .../.../EC brings the provisions of the Member States with regard to petroleum stocks and crisis measures closer into line with each other and provides for coordinated action between Member States in the event of a supply crisis.

(3) It also incorporates, in a new and coherent text, all the relevant aspects which were dealt with in particular in the Council Decision of 20 December 1968 on the conclusion and implementation of individual agreements between governments relating to the obligation of Member States to maintain minimum stocks of crude oil and/or petroleum products, [2] and the Council Decision 77/706/EEC of 7 November 1977 on the setting of a Community target for a reduction in the consumption of primary sources of energy in the event of difficulties in the supply of crude oil and petroleum products. [3]

[2] OJ L 308, 23.12.1968, p.19.

[3] OJ L 292, 16.11.1977, p. 9.

(4) Those legislative texts are therefore now obsolete,

HAS ADOPTED THIS DECISION:

Article 1

Council Decision 68/416/EEC is hereby repealed.

Article 2

Council Decision 77/706/EEC is hereby repealed.

Article 3

This Decision is addressed to the Member States.

Done at Brussels, [...]

For the Council

The President

[...]

LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): Energy

Activity(ies): Underpinning the security of oil and gas supply to the European Union

Title of action: Creation of an European Observation System for Oil and Gas Supply

1. BUDGET LINE(S) + HEADING(S)

Budget line to create:

B5-710 A "Financial Support for Energy Infrastructure - Expenditure on administrative management"

2. OVERALL FIGURES

2.1. Total allocation for action (Part B): EUR million for commitment 4.478 MEUR

2.2. Period of application:

2004 - 2009 and subs. years

(subject to renewal of the budget line concerned)

2.3. Overall multiannual estimate on expenditure: 14.022 MEUR

As for the years 2007 onwards, commitments and payments are subject to renewal of the TEN regulation.

a) Schedule of commitment appropriations/payment appropriations (financial intervention) (see point 6.1.1)

EUR million (to 3rd decimal place)

>TABLE POSITION>

b) Technical and administrative assistance and support expenditure(see point 6.1.2)

>TABLE POSITION>

>TABLE POSITION>

c) Overall financial impact of human resources and other administrative expenditure (see points 7.2 and 7.3)

>TABLE POSITION>

Figures do not add up due to rounding

>TABLE POSITION>

2.4. Compatibility with the financial programming and the financial perspective

|X| Proposal compatible with the existing financial programming

| | This proposal will entail reprogramming of the relevant heading in the financial perspective

| | This may entail application of the provisions of the Interinstitutional Agreement.

2.5. Financial impact on revenue [4]:

[4] For further information see a separate guidance paper

|X| No financial implications (involves technical aspects regarding implementation of a measure)

OR

| | Financial impact - the effect on revenue is as follows:

Note: All details and observations pertaining to the method of calculating the effect on revenue should be included in a separate annex.

>TABLE POSITION>

(Please state each budget line involved, adding the appropriate number of rows to the table if there is an effect on more than one budget line)

3. BUDGET CHARACTERISTICS

>TABLE POSITION>

4. LEGAL BASIS

Article 95 EUT

Directive concerning the alignment of measures with regard to security of supply for petroleum products [COM(2002)488]

Directive concerning measures to safeguard security of natural gas supply [COM(2002)488]

5. DESCRIPTION AND GROUNDS

1.1. Need for Community intervention [5]

[5] For further information see a separate guidance paper

1.1.1. Objectives pursued

The Green Paper "Towards a European strategy for the security of energy supply" revealed the structural weaknesses of the Communities energy supply. Growing dependency on energy imports from external suppliers entailing physical and economic risks and the forthcoming completion of the internal energy market clearly demonstrate the need to define a Community framework for the implementation of measures to ensure security of external energy supplies which will place minimum restrictions on competition. The new Community framework relating to Security of supplies of oil and gas will require complex and technical tasks to be carried out. In addition, it will necessitate very close co-operation with partner countries supplying and transiting resources to the enlarged EU. It will be necessary among other things to monitor trends on international oil and gas markets and assess their impact on the security and safety of supplies of oil, gas and strategic infrastructure. There will have to be continuous assessment of the effectiveness of the measures taken; in this connection, the level of stocks of oil and gas in the Member States will have to be monitored. For these tasks to be carried out, objective, reliable and comparable data will have to be available.

In the event of an energy crisis, when the European Communities decide on or recommend measures related to oil and gas stocks, it will be necessary to assess the impact on the energy market and the economy as a whole.

In this context, there is an increasing need to develop more reliable price indices more attuned to the realities of the market than the current ones. The Commission has already stated, in its communication of 4 October 2000 on oil supplies in the European Union, that the producer countries, market operators and the industry should be encouraged to improve price formation indicators, particularly on the basis of a global index which would reflect the whole of the market.

It therefore appears essential to create, within the Commission, a European observation system for oil and gas supply. This system will

* assist in preparing and implementing Community legislation in the field of oil and gas supply

* monitor its application and assist in evaluating the effectiveness of the measures in force and their effects on the functioning of the internal market for petroleum products, oil and natural gas.

1.1.2. Measures taken in connection with ex ante evaluation

a) Explain how and when the ex-ante evaluation was conducted or how the corresponding information was gathered.

In November 2000, the Commission issued a Green paper "Towards a European strategy for the security of energy supply". The Green Paper was based on a profound analysis of the challenges, risks and needs of the European Union in terms of secure energy supplies. It identified the structural weaknesses and geopolitical, social and environmental shortcomings of the EU's energy supply. Its publication triggered a comprehensive public debate on security of energy supplies and how to ensure it in the future. In the final report on the Green Paper, the Commission stated that energy imports would be much higher in 30 years time, amounting to 70% of total needs. The need to develop a Europe-wide security of supply concept was also highlighted. As a consequence, the Commission has developed a Community framework aiming at ensuring secure gas and oil supplies to the EU.

In addition, further input has been gathered by the Madrid Regulatory Forum, the Oil Supply Group as well as other, less formal sources from Member States and industry.

b) Describe briefly the findings and lessons learnt from the ex-ante evaluation:

In October 2000, the Commission issued a Communication on European oil supply and in November 2000, it adopted the Green Paper "Towards a European Strategy for the security of energy supply". In February 2002, the Madrid Regulatory Forum agreed on extensive conclusions and presented a wide range of different working papers and presentations [6]. In these documents, among others, the following facts have been identified and highlighted:

[6] see http://europa.eu.int/comm/energy/en/gas_single_market/madrid3/madrid5.html

1. The European Union will face a considerably rising dependency on oil and gas imports over the next decades; the most recent figures available to the Commission suggest a rise from 75% to 85% for oil and from 40% up to 70% for gas.

2. The volatility of oil prices, to which gas prices are still linked, does not exclusively reflect market development, but also point to political interests (OPEC) and massive speculation involved in the international oil market. Unreasonably high oil prices as a consequence of speculation caused rising inflation rates in the past with all the negative economic consequences arising from it [7].

[7] In its Communication from October 2000, the Commission stated: "If oil prices stay at around $30 a barrel during the rest of the year the negative effect on the price increase on growth would be 0.3% for the year 2000 and 0.5% for 2001. the increase in price would add 1% to the inflation rate."

3. The creation of the internal energy market is very complex in particular in relation to the implementation of technical rules that are introduced as a consequence of introducing competition to the European natural gas market and in order to create and maintain a level playing field not only, but also in terms of security of supply.

4. Existing price differences in the downstream oil sector of Member States are likely to be due to a lack of competition.

5. The present security stock system in EU Member States is very fragmented: some Member States have set up ad hoc bodies responsible for holding all or part of the security stocks; others have not. The rules for operating the security stocks vary widely, and as a consequence, there is insufficient harmonisation of the mechanisms to guarantee security of supply.

6. The same findings apply to crisis measure arrangements currently in place in Member States.

1.1.3. Measures taken following ex post evaluation

The activities of the observatory will be subject of regular midterm reviews to identify recommendations designed to improve the performance of the Observatory.

1.2. Actions envisaged and arrangements for budget intervention

In the following, each action is specified according to the following:

A. The target population(s) (specify number of beneficiaries if possible);

B. The specific objectives set for the programming period (in measurable terms);

C. The concrete measures to be taken to implement the action ;

D. The immediate outputs of each action, and their contribution to

E. The expected outcomes solving needs or problems

Actions:

1. Monitoring the functioning of the internal oil and gas market and the international oil and gas market:

A. The target population(s) (specify number of beneficiaries if possible)

Commission, Member States, relevant industry and partner countries (producers, transit)

B. The specific objectives set for the programming period (in measurable terms

1. Ensuring that Member States, the Commission and relevant decision makers in the industry and partner countries are up to date with respect to short and long term security of supply developments and risk assessments in the internal and international oil and gas market.

2. Agreements with partner countries;

C. The concrete measures to be taken to implement the action

1. Analysis of relevant economic and political developments affecting the internal and international oil and gas markets (bi-annual workshop)

2. Analysis of the impact of relevant Community legislation by evaluating public and other sources (workshops with MS and Candidate Countries, when necessary and appropriate)

3. Conduct a permanent dialogue with partner countries (roundtable every two years, supplemented by bilateral meetings)

D. The immediate outputs of each action, and their contribution to

Issue an annual report including recommendations if appropriate which identifies the development of the main political, economic and technical challenges, risks and opportunities to the EU oil and gas supply in the short and long term and the well functioning of the internal and, as far as relevant, international oil and gas markets.

E. The expected outcomes solving needs or problems

Adopt policy measures in line with the requirements of short and long term secure oil and gas supplies

2. Contribute to the implementation of a system for the physical monitoring of the oil and gas infrastructures inside and outside of the EU:

A. The target population(s) (specify number of beneficiaries if possible)

Commission, Member States, relevant industry and partner countries

B. The specific objectives set for the programming period (in measurable terms

Develop a monitoring system for accident prevention and, if case may be, intervention, in strategic oil, gas and petroleum products infrastructure, based, among other things, on satellite communication system (Galileo)

C. The concrete measures to be taken to implement the action

1. Collect, update and analyse available information on relevant gas and oil infrastructure.

2. Launch of a technical and economic feasibility study of the design of a pan-European dispatching model for oil and gas involving a satellite based communication system (Galileo) as well as develop a computer based pan-European dispatching model for oil and gas.

4. Analysis and (as far as possible) implementation of the results of the study.

5. Launch of negotiations with partner countries on their inclusion in the monitoring system (roundtable in 2006, bilateral meetings covered by measure 1C31)

6. Elaboration of a technical and physical implementation plan of the monitoring system (experts).

D. The immediate outputs of each action, and their contribution to

1. Complete survey of relevant infrastructure inside and outside the EU.

2. Assessment of technical features and economic costs of the monitoring system.

3. Agreement with partner countries on their inclusion in the monitoring system.

4. Disposition of a technical and physical implementation plan of the monitoring system.

E. The expected outcomes solving needs or problems

Contribution to the implementation of the monitoring system

3. Monitor oil and gas supplies to the EU and the procedures aimed at guaranteeing the security of these supplies in emergency cases

A. The target population(s) (specify number of beneficiaries if possible)

Commission, Member States, relevant industry and partner countries

B. The specific objectives set for the programming period (in measurable terms

1. Identification of potential challenges and development of appropriate policy measures.

2. Minimising the impact of emergency measures on the well functioning of the internal energy market.

C. The concrete measures to be taken to implement the action

1. Monitoring oil and gas demand and supply developments by analysing relevant information (subscription, regular workshop with Member States, industry and partner countries).

2. Monitoring the transposition and implementation of the relevant Community legislation on security of oil and gas supply (study, one follow-up meeting in 2007).

3. Investigate and evaluate Member State policies in emergency cases and analyse their impact on the internal market (study in 2004, precedent meetings with MS, then annual meetings).

4. Prepare input to Commission with a view to updating and appropriately amending security of supply legislation based on the findings from the above meetings.

5. Develop security of supply standards applicable to all Member States (study).

D. The immediate outputs of each action, and their contribution to

To ensure up to date measures and policies with respect to the respective supply situation.

E. The expected outcomes solving needs or problems

Being prepared for future challenges of secure oil and gas supplies

4. Monitor the level of oil and gas stocks as well as stocks of oil products and the procedures for their use, the implementation of measures to reduce oil and oil product consumption as well as the procedures applied with regard to access to gas storage including aspects of market dominance in relation to access to storage

A. The target population(s) (specify number of beneficiaries if possible)

Commission, Member States, relevant industry and partner countries

B. The specific objectives set for the programming period (in measurable terms

1. Maintaining adequate levels of oil stocks and gas storage facilities.

2. Set up of recommendations for the use of stocks.

3. Identification of means to reduce oil and oil product consumption.

4. Set up of recommendations for a code of good conduct to ensure non-discriminatory, transparent and cost-effective access to gas storage facilities.

C. The concrete measures to be taken to implement the action

1. Monitor and analyse stock developments including the identification of a mechanism to gather relevant data (workshops, study, follow up workshop).

2. Analyse and identify appropriate stock levels against the background of specific supply situations.

3. Launch a study on how to reduce oil and oil product consumption taking into account the most recent developments in the transport sector.

4. Investigate TPA terms for gas storage facilities and identify best practices adapted to the respective situation (study, publication).

D. The immediate outputs of each action, and their contribution to

1. Issuing quarterly reports on oil and gas stock developments and terms on access to storage (including tariffs).

2. Proposals for measures to reduce consumption of oil and oil products.

E. The expected outcomes solving needs or problems

1. Maintenance of adequate levels of stocks.

2. Improved third party access to gas storage also to avoid market dominance of certain players.

3. Contribution to reduced level of oil and oil product consumption.

5. Create a basis of objective, reliable and comparable data as a basis for fulfilling the above tasks

A. The target population(s) (specify number of beneficiaries if possible)

Commission, Member States, relevant industry and partner countries

B. The specific objectives set for the programming period (in measurable terms

Creation of EU data base to facilitate and enable the above actions.

C. The concrete measures to be taken to implement the action

1. Launch a study to identify the most appropriate design of the database.

2. Develop a mechanism to establish the database, collect and update the relevant data.

3. Organise workshops to take account of methodological changes with respect to data acquisition and interpretation.

D. The immediate outputs of each action, and their contribution to

Identification of the most appropriate design of the database and a mechanism to collect and update the relevant data.

E. The expected outcomes solving needs or problems

Provide the relevant database for the work of the Observatory.

1.3. Methods of implementation

The European Observation System for oil and gas supply is run by the Commission and located at Commission premises. Human resources of the observation system will be gradually phased-in as from 2004, starting with around 8 people. Estimated HR needs at cruising speed, that will be reached around 2006, stand at 13 people and it is foreseen that five Commission officials (one of them will act as head of the observation system), five national experts seconded from their government and three temporary agents should contribute to the objectives of the observation system.

It is also foreseen to benefit from the expertise of third country experts, paid by their governments and without any financial implication for the Community budget.

2. FINANCIAL IMPACT

2.1. Total financial impact on Part B - (over the entire programming period)

(The method of calculating the total amounts set out in the table below must be explained by the breakdown in Table 6.2. )

2.1.1. Financial intervention

Commitments in EUR million (to the 3rd decimal place)

>TABLE POSITION>

>TABLE POSITION>

2.2. Calculation of costs by measure envisaged in Part B (over the entire programming period) [8]

[8] For further information see a separate guidance paper

(Where there is more than one action, give sufficient detail of the specific measures to be taken for each one to allow the volume and costs of the outputs to be estimated. ).

For this table, please see Annex 1.

Commitments in EUR million (to the 3rd decimal place)

>TABLE POSITION>

If necessary explain the method of calculation

3. IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

The needs for human and administrative resources shall be covered within the allocation granted to the managing DG in the framework of the annual allocation procedure.

3.1. Impact on human resources

Calculations are based on the cruising speed situation.

>TABLE POSITION>

3.2. Overall financial impact of human resources

>TABLE POSITION>

The amounts are total expenditure for twelve months.

3.3. Other administrative expenditure deriving from the action

>TABLE POSITION>

The amounts are total expenditure for twelve months.

(1) Specify the type of committee and the group to which it belongs.

>TABLE POSITION>

4. FOLLOW-UP AND EVALUATION

4.1. Follow-up arrangements

The work programme of the observatory will be drawn up and approved in the framework of the normal DG TREN work programme.

4.2. Arrangements and schedule for the planned evaluation

See above.

5. ANTI-FRAUD MEASURES

The observatory will employ a number of important rules with respect to financial and administrative control, which will be adapted to features of the action concerned. These rules and procedures will be applied throughout the whole period of the actions. they concern in particular:

- before the signature of contracts: a qualitative and financial analysis of offers or proposals and, if case may be, the involvement of other services of the Commission with a view to avoid duplication of work.

- after the signature of contracts: examination of the list expenditures before payment at several levels (financial and technical); successive payments in line with progress of work; internal audit:

>TABLE POSITION>

>TABLE POSITION>

LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): Energy

Activity(ies): Underpinning the security of oil and gas supply to the European Union

Title of action: Convening a committee to assist the Commission in case of supply crisis (Oil)

1. BUDGET LINE(S) + HEADING(S)

Budget line: A07031, heading: Meetings and convocation in general

2. OVERALL FIGURES

2.1 Total allocation for action (Part B): EUR million for commitment: none

2.2 Period of application:

2004 to 2009 and subsequent years

2.3 Overall multiannual estimate on expenditure: 0,24 MEUR

a) Schedule of commitment appropriations/payment appropriations (financial intervention) (see point 6.1.1)

EUR million (to 3rd decimal place)

>TABLE POSITION>

b) Technical and administrative assistance and support expenditure(see point 6.1.2)

>TABLE POSITION>

>TABLE POSITION>

c) Overall financial impact of human resources and other administrative expenditure (see points 7.2 and 7.3)

>TABLE POSITION>

>TABLE POSITION>

2.4 Compatibility with the financial programming and the financial perspective

|X| Proposal compatible with the existing financial programming

| | This proposal will entail reprogramming of the relevant heading in the financial perspective

| | This may entail application of the provisions of the Interinstitutional Agreement.

2.5 Financial impact on revenue [9]:

[9] For further information see a separate guidance paper

|X| No financial implications (involves technical aspects regarding implementation of a measure)

OR

| | Financial impact - the effect on revenue is as follows:

Note: All details and observations pertaining to the method of calculating the effect on revenue should be included in a separate annex.

>TABLE POSITION>

(Please state each budget line involved, adding the appropriate number of rows to the table if there is an effect on more than one budget line)

3. BUDGET CHARACTERISTICS

>TABLE POSITION>

4. LEGAL BASIS

Art 95 EUT

5. DESCRIPTION AND GROUNDS

5.1 Need for Community intervention [10]

[10] For further information see a separate guidance paper

5.1.1 Objectives pursued

The European Union has to cope with a rising dependency on oil supply from external sources. This entails physical and economic risks, as most of the producer countries are located in politically rather unstable regions. In view of the immense importance of a secure oil supply for the European economies and societies, the Commission has proposed, as an outcome of the debate on the Green Paper "Towards a European strategy for the security of energy supply" a Community framework designed to ensure a secure supply of oil also in the future.

However, in case of emergency and /or crisis situations, it cannot be excluded that a secure oil supply is put on jeopardy due to physical interruptions and/or dramatically high prices. In order to cope efficiently and with only the least possible delay, the Commission has proposed a genuine decision-making mechanism under which the European Union will be able to define rapidly and efficiently the most appropriate response to a actual or potential threat.

This decision-making process involves Member States who will be convened in order to assist the Commission to define the most appropriate action in a given emergency or crisis situation.

5.1.2 Measures taken in connection with ex ante evaluation

In the framework of the oil crisis in autumn 2000 and while preparing the debate on the Green Paper, the Commission has carried out several in-depth analysis on crisis mechanisms currently in force (such as the IEA mechanism) and came to the conclusion that these mechanisms would be inadequate in a given crisis. These conclusions are reflected in the Green Paper and in the Communication of the Commission on oil supply [11]. As a result, the Commission proposes a new Community framework for security of oil and gas supplies, which foresees the above-mentioned new decision-making process.

[11] COM(2000)769

5.1.3 Measures taken following ex post evaluation

(Where a programme is being renewed the lessons to be learned from an interim or ex post evaluation should also be described briefly.)

5.2 Actions envisaged and arrangements for budget intervention

not applicable

5.3 Methods of implementation

The Committee will be chaired by the Commission, which is assisted by representatives of Member State.

6. FINANCIAL IMPACT

6.1 Total financial impact on Part B - (over the entire programming period)

not applicable

6.1.1 Financial intervention

Commitments in EUR million (to the 3rd decimal place)

>TABLE POSITION>

6.2 Calculation of costs by measure envisaged in Part B (over the entire programming period) [12]

[12] For further information see a separate guidance paper

not applicable

Commitments in EUR million (to the 3rd decimal place)

>TABLE POSITION>

If necessary explain the method of calculation

7. IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

The needs for human and administrative resources shall be covered within the allocation granted to the managing DG in the framework of the annual allocation procedure.

7.1 Impact on human resources

not applicable

>TABLE POSITION>

7.2 Overall financial impact of human resources

not applicable

>TABLE POSITION>

The amounts are total expenditure for twelve months.

7.3 Other administrative expenditure deriving from the action

>TABLE POSITION>

The amounts are total expenditure for twelve months.

(1) Specify the type of committee and the group to which it belongs.

>TABLE POSITION>

8. FOLLOW-UP AND EVALUATION

8.1 Follow-up arrangements

The Commission will take care for the correct implementation of the decisions taken by the Committee. In particular, it will ensure that the internal rules of procedure are adequate and strictly followed by Committee Members.

8.2 Arrangements and schedule for the planned evaluation

If necessary and appropriate, the Commission will issue recommendation and/or proposals to streamline the work of the Committee.

9. ANTI-FRAUD MEASURES

not applicable

LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): Energy

Activity(ies): Underpinning the security of oil and gas supply to the European Union

Title of action: Convening a committee to assist the Commission in case of supply crisis (Gas)

1. BUDGET LINE(S) + HEADING(S)

Budget line: A07031, heading: Meetings and convocation in general

2. OVERALL FIGURES

2.1 Total allocation for action (Part B): EUR million for commitment: none

2.2 Period of application:

2004 to 2009 and subsequent years

2.3 Overall multiannual estimate on expenditure: 0,24 MEUR

a) Schedule of commitment appropriations/payment appropriations (financial intervention) (see point 6.1.1)

EUR million (to 3rd decimal place)

>TABLE POSITION>

b) Technical and administrative assistance and support expenditure(see point 6.1.2)

>TABLE POSITION>

>TABLE POSITION>

c) Overall financial impact of human resources and other administrative expenditure (see points 7.2 and 7.3)

>TABLE POSITION>

>TABLE POSITION>

2.4 Compatibility with the financial programming and the financial perspective

|X| Proposal compatible with the existing financial programming

| | This proposal will entail reprogramming of the relevant heading in the financial perspective

| | This may entail application of the provisions of the Interinstitutional Agreement.

2.5 Financial impact on revenue [13]:

[13] For further information see a separate guidance paper

|X| No financial implications (involves technical aspects regarding implementation of a measure)

OR

| | Financial impact - the effect on revenue is as follows:

Note: All details and observations pertaining to the method of calculating the effect on revenue should be included in a separate annex.

>TABLE POSITION>

(Please state each budget line involved, adding the appropriate number of rows to the table if there is an effect on more than one budget line)

3. BUDGET CHARACTERISTICS

>TABLE POSITION>

4. LEGAL BASIS

Art 95 EUT

5. DESCRIPTION AND GROUNDS

5.1 Need for Community intervention [14]

[14] For further information see a separate guidance paper

5.1.1 Objectives pursued

Despite the considerable achievements in terms of introducing competition on the European natural gas market, the gas market is still in a transitional period. The Commission has to closely follow the developments in order to help competition gaining ground. For this reason, a close co-operation between the Commission and the Member States is necessary.

In an integrated competitive internal market for gas, emergency or crisis situation of gas supplies will affect a large number of customers, who are not likely to be located within the same national boundary. In order to maintain a secure gas supply to certain customers also in crisis situations, but also to ensure the least possible disturbances of the market in such situation, a co-ordination mechanism at Community level is necessary.

For these reasons, the new Community framework for secure gas and oil supplies requests the convocation of a Committee made up of representatives of Member States and chaired by the Commission.

5.1.2 Measures taken in connection with ex ante evaluation

The analysis carried out in the Green Paper "Towards a European strategy on energy supply" demonstrated clearly that imports of natural gas will grow and come from more distant regions. The new competitive market environment introduced by liberalisation did not enable full transparency in terms of security of supply policies. For these reasons the Commission proposes a new Community framework for security of oil and gas supplies, which foresees the above-mentioned new decision-making process.

5.1.3 Measures taken following ex post evaluation

(Where a programme is being renewed the lessons to be learned from an interim or ex post evaluation should also be described briefly.)

5.2 Actions envisaged and arrangements for budget intervention

not applicable

5.3 Methods of implementation

The Committee will be chaired by the Commission, which is assisted by representatives of Member State.

6. FINANCIAL IMPACT

6.1 Total financial impact on Part B - (over the entire programming period)

not applicable

6.1.1 Financial intervention

Commitments in EUR million (to the 3rd decimal place)

>TABLE POSITION>

6.1 Calculation of costs by measure envisaged in Part B (over the entire programming period) [15]

[15] For further information see a separate guidance paper

not applicable

Commitments in EUR million (to the 3rd decimal place)

>TABLE POSITION>

If necessary explain the method of calculation

7. IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

The needs for human and administrative resources shall be covered within the allocation granted to the managing DG in the framework of the annual allocation procedure.

7.1 Impact on human resources

not applicable

>TABLE POSITION>

7.2 Overall financial impact of human resources

not applicable

>TABLE POSITION>

The amounts are total expenditure for twelve months.

7.3 Other administrative expenditure deriving from the action

>TABLE POSITION>

The amounts are total expenditure for twelve months.

(1) Specify the type of committee and the group to which it belongs.

>TABLE POSITION>

8. FOLLOW-UP AND EVALUATION

8.1 Follow-up arrangements

The Commission will take care for the correct implementation of the decisions taken by the Committee. In particular, it will ensure that the internal rules of procedure are adequate and strictly followed by Committee Members.

8.2 Arrangements and schedule for the planned evaluation

If necessary and appropriate, the Commission will issue recommendation and/or proposals to streamline the work of the Committee.

9. ANTI-FRAUD MEASURES

not applicable