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EU Calls On Oil-consuming Countries To Focus On Efficiency

Dow Jones International News

© 2008 Dow Jones & Company, Inc.

BRUSSELS (AP)--The European Union on Friday called on other major oil-consuming regions to cut back on the amount of energy they use as oil supplies face a tight squeeze that has sent prices soaring.

E.U. Energy Commissioner Andris Piebalgs told U.S. and Japanese officials that energy efficiency was «one of the most cost-effective short-term responses» to surging prices, said his spokesman Ferran Tarradellas Espuny.

«Oil-consuming countries also need to take action to deal with the tight fundamentals,» Tarradellas Espuny said. «We must strengthen our efforts to improve energy efficiency and to promote alternative energy sources.»

Oil prices rose overnight, the fastest gain in over three weeks, on word that U.S. President George W. Bush and U.S. Congress had agreed a spending package to stimulate the slowing U.S. economy -that will likely boost U.S. thirst for oil.

The E.U.'s energy chief held a conference call with U.S. Energy Secretary Samuel Bodman and Japanese Economy Minister Hiroko Ota in Davos, Switzerland, to say that Europe was seriously concerned about recent price hikes.

Sustained high prices «could result in a slowing of global economic growth, damaging developed, developing and oil-producing countries,» Tarradellas Espuny reported Piebalgs as saying.

Piebalgs blamed many short-term factors for the price hikes -inventory levels, geopolitical tensions, winter demand and a flow of investment money -but also warned that transport was too dependent on oil. The E.U. is trying to encourage cars and trucks to burn more biofuel.

He called for joint efforts to ensure «sustained and adequate levels of investments» in upstream and downstream development in oil supplies.

In the longer term, he pointed to increasing demand from developing countries such as China and India, saying their June meeting with the Group of 8 industrialized nations -the U.S., Japan, Russia, Germany, U.K., France, Italy and Canada -would be a good opportunity to work together on this.

The E.U. this week set out plans to shower money on renewable energy as part of its push to slash greenhouse gases by a fifth by 2020 -and lessen dependence on energy imports.

It aims to draw 20% of its energy demand from windmills, solar panels and energy crops within 12 years, threatening E.U. members with sanctions if they don't hit targets.

The E.U. has also set a voluntary goal to cut energy demand by a fifth with efforts to use more power-saving lighting and electronic devices and make buildings more efficient. 

Date:  25.01.2008

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