Although the European Union's (EU) 27 member states have ceded some national sovereignty (or competency) to EU institutions in a variety of areas, including economic and trade policy, energy policy remains primarily the responsibility of the member states. Decisions regarding long-term oil or gas purchases, the development and improvement of energy-related infrastructure, and the use of particular fuels continue to be made at the national level by individual member states. At their March 2007 summit, EU member states moved to boost European coordination to help secure and diversify energy supplies, increase the development and use of renewable and alternative energy resources within the EU, and reduce energy demand and consumption. Although member state governments remain reluctant to cede national sovereignty over energy-security aspects of their foreign policies, they have set binding EU-wide targets for the use of renewable energies and biofuels, and have agreed to ambitious but non-binding energy efficiency and carbon emission reduction targets for the year 2020. In addition, member states are considering potentially significant reforms to further liberalize energy markets. Nonetheless, most observers expect member states to continue to retain significant national control over national energy markets and external relations with energy-producing countries. EU heads of State are set to discuss specific policy proposals in these areas at their spring 2008 summit. Europe's renewed interest in energy security has been influenced by both internal and external factors. Internally, steadily rising energy prices, declining European energy production and a fragmented internal energy market have contributed to anxieties over Europe's ability to meet future energy demand. The strain on global demand exerted by the emerging economies of countries such as China and India, persistent instability in energy producing regions, the threat of terrorist strikes against energy infrastructure, and Russia's apparent willingness to use its energy power for political ends, are all raising concerns in Europe over how to address external influences that could affect future energy requirements. Recent calls for EU-wide energy coordination have been driven by rising European concern about the effects of energy production and consumption on global climate change. To this end, EU member states' recent energy policy decisions center largely on promoting energy efficiency, developing renewable energy and clean fuel sources, and reducing overall greenhouse gas emissions. As uncertainties surrounding global energy supply and demand persist, issues pertaining to U.S., European, and global energy security are may gain importance in the second session of the 110 th Congress. Members of both parties have introduced legislation aimed at increasing energy independence and energy security and reducing carbon emissions. Several of these proposals envision carbon trading schemes similar to those in use in Europe. In several hearings during the first session of the 110 th Congress, Members of Congress voiced concern about Europe's dependence on Russian energy resources, and the potential for Russian manipulation of European energy markets. To this end, Senator Richard Lugar has raised the possibility of a more proactive role for NATO in guaranteeing energy security for Alliance members. Collectively, EU member states import half of their energy needs. Barring significant policy changes, this figure is expected to rise to 65% by 2030. Today, oil, natural gas, and coal account for 80% of the energy consumed in the EU. Europe's energy imports come primarily from Russia and the Middle East, where approximately 70% of global oil and gas supplies originate. Yet, the Middle East region is fraught with war, terrorism and politically unstable regimes. Iraq's oil production has not reached pre-war levels, and there is fear that terrorist groups could target pipelines and production facilities throughout the region. Iran has threatened to cut back oil production if forced to abandon its nuclear power program. With regard to Russia, recent political and economic behavior exhibited by Moscow has raised the dual specter of reliability and "energy politics." High demand has also raised questions regarding the future availability of global oil and gas reserves. Although significant shortages are not projected for the next several decades, uncertainties over future exploration and production in areas such as Russia and the Middle East have also raised concerns about long-term supply availability. The International Energy Agency (IEA) estimates that close to $16 trillion in new investments may be needed over the next 30 years to meet future global energy demand. European concern regarding the security of its energy supply was first prompted by the Arab oil embargo of the early 1970s. Specifically, the embargo highlighted three main issues. First, it exposed a need for increased energy policy collaboration among European countries and between Europe and the energy producing world. Second, it became clear that institutional mechanisms for increased coordination in the event of future supply disruptions were essential. Third, consensus emerged that Europe should prepare strategies to prevent it from becoming the victim of future attempts by exporting nations to use energy as a political or economic weapon. The 1974 creation of the International Energy Agency (IEA), which has become Europe's primary instrument for monitoring and analyzing world energy markets, was one response to the embargo. In addition, European countries sought to develop strategies to diversify energy supply. After the embargo, European countries began to identify Russia and other Eurasian countries as potential energy suppliers. At the time, Soviet Russia was beginning to realize its energy producing potential but required major investments in its energy sector. The prospect of future cooperation in the energy field began to play a key role in European perspectives on developing relations with the Soviet Union. In 1991, the European Union launched the Energy Charter Declaration, an initiative intended to promote energy cooperation and diversify Europe's energy supply. The Declaration gave way to the 1994 Energy Charter Treaty that entered into legal force in 1998 and established a framework of rules and agreements to promote international energy cooperation. To date, 51 countries and the EU have signed or acceded to the Treaty. The Treaty seeks to create a level playing field of rules regarding the promotion of foreign energy investments; free trade in energy materials, products and equipment; freedom of energy transit through pipelines and grids; promoting energy efficiency; and providing mechanisms for addressing disputes. Since the signing of the Energy Charter Treaty, the European Commission has used its existing competency in competition and environment and consumer protection policy to attempt to shape a European energy policy in a variety of ways. These include promoting an internal gas and electricity market, encouraging the development of alternative energy supplies, and, in cooperation with the office of the High Representative for Common Foreign and Security Policy, pursuing a more cooperative approach to external relations with current and future energy suppliers. A 2005 German-Russian gas pipeline agreement and more recent Russian manipulation of gas and oil flows to the European market have sparked a newfound sense of urgency among European leaders regarding the need for a more coordinated strategy. These events correspond with growing concern among the European public and political classes regarding the link between energy production and consumption and global climate change. In 2005, Germany and Russia agreed to build a gas pipeline connecting the countries under the Baltic Sea, the so-called North European Gas Pipeline (NEGP). While Germany maintains that the pipeline will significantly enhance German and therefore European energy supply and security, a number of EU member states, including Poland and Lithuania, have protested the decision. They counter that by running the pipeline under sea so it bypasses both countries, and that by failing to coordinate with EU neighbors when negotiating with Russia, Germany's actions pose a threat to their and broader European energy security. Furthermore, prominent Swedish officials have voiced concerns that the pipeline will provide Russia with a platform to increase both military surveillance and its military presence in the strategically important Baltic Sea. The German-Russian agreement and subsequent responses from Poland, Lithuania, and more recently, Sweden, have reignited calls for a more coordinated European energy strategy. As internal strife over the German pipeline decision continues, disputes between Russia and Ukraine and Russia and Belarus have exposed some undesirable consequences of European dependence on Russian energy resources. In late December 2005, Russia's gas monopoly, Gazprom, temporarily suspended gas flows to Ukraine as part of a dispute over gas price increases. Within hours of the shut off, several European countries, including Austria, Italy, Poland, and Germany, reported drops in their own pipeline pressure by as much as 30%. The gas crisis lasted only a few days, and after Russia and Ukraine reached an agreement on gas prices, gas was flowing again. An almost identical dispute between Russia and Belarus with similar consequences for European countries, particularly Germany, occurred in early January 2007. This time, Russian oil pipeline operator Transneft shut down the Druzhba oil pipeline through which Germany receives 20% of its oil imports. Germany and the EU sharply rebuked Russia's decision, and Russia resumed oil delivery after three days of price negotiations with Belarus. Many European observers have characterized the Russia-Ukraine and Russia-Belarus gas and oil crises as "wake up" calls exposing Europe's energy security vulnerability even to unintended supply disruptions. More importantly, however, the crises raised the dual questions of Russia's reliability as an energy partner and Moscow's willingness to use its energy power as a political weapon. In response, European leaders have advocated coordinating decisions on energy supply so as to present a unified front to producer nations like Russia, and have promoted energy efficiency and more efficient energy use. Despite these calls, some European countries and energy companies have continued to pursue long-term energy deals bilaterally. In the past year, companies from Italy, Austria, Bulgaria, and Serbia have signed contracts with Russian energy companies which some observers contend could pose a threat to collective European energy security. The EU's 27 member states account for approximately 17% of the world's total energy consumption. In 2005, about 80% of the energy consumed within the EU was from fossil fuels. Figure 1 provides an overview of the EU's energy consumption by fuel source. Europe imports about 50% of its total energy supply—slightly over 80% of its oil and close to 57% of its natural gas. Its dependence on imported energy sources, particularly natural gas, is expected to grow substantially in the coming decades. Commission estimates suggest that if current trends continue, Europe will import 65% of its total energy requirements by 2030. Russia, Norway, the Middle East, and North Africa are the largest suppliers of EU energy.