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COM(80)235
Vol.1980/0074

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)235 final
Brussels .8thMay1980
THE ENERGY SITUATION INTHE COMMUNITY AND THE WORLD
(Communication from the .Commission tothe Council )
COM (80)235 final

SEEENERGY SITUATION INTHE COMMUNITY AND THEWORLD
COMMUNICATION BYTHECOMMISSION TOTHECOUNCIL
Α
Introduction
1.Initscommunication of20March totheEuropean Council (COM(80)130final )
theCommission emphasised theneed foranewCommunity initiative onenergy ,
suggesting that 1980might offer abreathing space fortheCommunity tolook :
realistically attheproblems ofenergy supply andtoagree onpolicies todeal
with them .This note looks attheprospects for1980 inmore detail against the
"background ofdevelopments over thepast year ,andconsiders themain areas where
further Community action isnowrequired for "both theshort andthelonger term .
The world 01I situation
2.Theworld oilmarket continues topresent arather confusing picture ,as
regards both price andlevels ofsupply .TheDecember meeting ofOPEC brought '
official prices todouble their level atth®beginning of1979 .Butuniform
OPEC pricing hasnotbeen restored and .there aresome marked variations ofprice
forsimilar kinds ofcrude .Atpresent there isnooverall shortage ofcrude
oilinrelation todemand andwith stocks atarecord level inlate 1979 there
have been some signs ofslack inthemarket .Atthesame time ,however -,,-there
isconsiderable uncertainty about themaintenance ofcurrent production levels .
Anumber ofOPEC producers have announced plans tocutback their output from
the1979 level ;Saudi Arabia ,currently producing 9*5®W&i made no
*
commitment tomaintain this level ofproduction beyond thesecond quarter of
1980 ;andthere isamajor question over Iranian supplies .(*)
3.Thehigh price levels andtheprospect ofasharp fall intherate of
economic growth intheOECD area should mean alevelling offinworld energy
consumption this year ,andsome analysts areforecasting areduction indemand
foroilofupto1million b/d.Butgiven thepossible slowdown inoil
production themost likely prospect for1980 asawhole isofacontinuing
delicate balance betwen supply anddemand ,even assuming nomajor interruptions
ofsupply .Looking further ahead ,solong asOPEC remains unwilling toexpand
production ,economic recovery intheOECD area islikely tobeconstrained
unless anduntil itcanbeachieved without agrowth indemand foroilimports .
<*)Theassessment inthis paragraph mayneed tobeupdated inthelight
oftheevolving situation . . "

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Community achievements
4*1979 wasayear ofachievement fortheCommunity inanumber offields .
The Strasbourg Summit which committed the Community asawhole tomaintain its
oilimports ator "below the1978 level (472mtons )from 1980-1 985»wasamajor
step forward inthestrengthening ofourcollective resolve toreduce our
dependence onoilandprovided asolid basis foragreement onfurther positive
measures .This achievement was further consolidated towards the end oflast
year byagreement onnational ceilings within theglobal totals for1980 and1985 *
5.TheCommunity also registered success inthedevelopment ofmeasures
toimprove thetransparency oftheoilmarkets .Wehave introduced registers
forimports ofboth crude oilandproducts ,which should provide uswith a
clearer picture than before about developments inthis area .Inaddition the
Commission hasbeen examining thetransactions ontheRotterdam andMediterranean
spot markets and isconsidering thescope forasystem ofcertification ofcrude
oilimports andfortheestablishment ofa"quick response "system toprovide
rapid information about crude oilimports inasupply emergency .
6.Finally ,theCouncil hasreached agreement onthe"Nuclear Trilogy "which
should enable further progress tobemade onquestions ofradioactive waste
disposal ,nuclear reprocessing andthefast–breeder reactor .
7.Against these achievements ,however ,thetrends intheenergy market inthe
Community last year highlight theneed foreven more vigorous action inthe
energy field .Three points should beemphasised .
8.Firstly ,oilconsumption levels .Oilconsumption last year wassome
25million tons above thetarget of500million tons agreed bytheEuropean
Council inParis andoilimports at475mtons were slightly uponthe1978
level .This high level of.consumption istobeexplained partly bytheharsh
winter andpartly bytheunexpectedly high level ofGDPgrowth .Bytheendof
theyear demand hadfallen toadaily rate consistent with theParis target .
Community consumption inthelast quarter of1979 was2.3$ lower than inthesame
period in1978 .Nevertheless thehigh level ofannual consumption underlines the
progress that has still tobemade inreducing theCommunity ^oildependence .
9.Secondly ,disorder intheoilmarkets .Thesupply shortages ofearly 1979
were exacerbated byascramble forsupplies bysome companies from both member
states andother major western countries ,which ,because oftheir supply structure ,
were faced with themost serious difficulties .This fierce competition led to
rather high prices onthe spot market andtofurther destabi lisation oftheoilmarket
which wasalready insome desarray because ofdevelopments' inIran .

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10.Thirdly ,inadequate progress in "thedevelopment anduse ofalternative
energy sources .There wasawelcome increase ofover 9%incoal consumption
intheCommunity last year ,bringing thetotal forthe fifrst time almost up
tothe1973 figure of310m.tons .This waslargely theresult ofhigher
power-station coal "burn (notably intheU.K. ).. Butcoal production remained
virtually statio at239m.tons .Wedonotexpect toseemuch change this
year .Onpresent trends there islittle likelihood ofmeeting theCommunity ^
production target of270m.tons in1985 *Thecontinuing slippage ofnuclear -
programmes remains afurther source ofconcern .Onpresent trends ,the
Community will in1990 still beburning million tons ofoileach year for
electricity generation (thenational figures aresetoutatAnnex ).Coal
firing conversion ^andnewconstruction must bespeeded up.Fornuclear y
national situations vary widely ,butintheCommunity asawhole theannual
rate ofordering ofnuclear power stations achieved during thepast 3years
needs tobedoubled over thecoming 3years ifnuclear power istomake its
duecontribution toourenergy needs irf1990 .
Keypolicy issues for 1980 "
11.Itisvital that themomentum oftheStrasbourg Summit should bemaintained
iftheCommunity istodevelop anadequate response toitsenergy problems and
toavoid thekind ofproblems that occurred last year .This points totheneed
foragreement over thenext fewmonths onnewmeasures todeal with both the
short andthelonger term .
12.Intheshort term itwould beimprudent torule outthepossibility ofa
further supply crisis ,perhaps even more serious than last year 's.Wemust
continue vigorously tomonitor ourprogress inkeeping within theagreed oil
import ceilings for1980 andconsider thescope fornewaction onoilimport
levels in1981 .
13*Forthelonger–term wemust commit ourselves assoon aspossible toanew
series ofmeasures toeffect amore rapid transition away from oil.The
cornerstone ofthis effort should beanintensified programme ofinvestment
inenergy production andenergy saving intheCommunity underpinned byagree­
ment onprogressive harmonisation ofenergy prices andtaxes ,asrecommended
inC0M(80 )130final .

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14.AtthesametimetheCommissionconsidersitvitalfortheCommunityto
agreeassoonaspossibleonanenergyplanningframeworkfortheperiodup
to1990,includingguidelinesonincreasedenergyefficiency,reducedoil
consumptionandlevelsofconsumptionofotherfuels(notablycoaland
nuclear).WithoutsuchaframeworkonthelinessetoutinC0M(79)316final
anynewinvestmentprogrammefortheCommunitywouldlackthenecessarycoherence.
15.Thesearethemainareaswherenewactiononenergypolicyisrequired.
Buttheyare"bynomeansexclusive.Acommitmenttoincreasedenergy
investmentwillneedtoheaccompanied "byacontinuingcampaignofpublic
educationabouttheenergyproblem.Thisappliesparticularly tothe
nuclearfield,wheretherearemajorpsychological barrierstobeovercome.
16.Finally,inthedevelopmentofnewpoliciesforboththeshortandthe
longertermtheCommunitymustbereadynotonlytoincreaseitssolidarity
*
withitsindustrialpartners,butalsotoextenditscontactsandcooperation
withtheoilproducersandnon–oildevelopingcountries,withtheaimof
creatingamorestablebasisonwhichtosecureourlongertermenergysupplied.

ANNEX
Sources ofelectricity generation in1990
National forecasts asoflate 1979
CountryTotal Oil Nuclear Coal Other
io * 1"million „
tons* *
Belgium , 100 - I 13.3 2.4 43.9 26.71.6.1
Denmark 100 20.0 1.8 80.0
Germany 100 3.7 7.6 . 29.3 49.7 17.3
France 100 4.6 4.5 67.6 9.718.1
Ireland 100 49,1 ,2.6 35.815.1
Italy 100 44.7 35.8 20.6 16.5»18.2
Netherlands 100 33.7 6.0 5.6 33.7 27.0
United Kingdom 100'11.2/12.5 8.7/10.2 26.2/25.2 62.0/61.8 0.5
Total Community
(incl^I^^^^ur ^100 13.6/13.8 69.4/70.9 33.7/33.4I
37.7/37.8 15.0
Note sThepercentage shown fornuclear energy istheequivalent of
approximately 115GWofgenerating capacity .