Energy : Slow Progress on Security of Gas Supply

Article excerpt

The Spanish EU Presidency is still hoping to reach political agreement by the end of its term on the European Commission's July 2009 proposal for a regulation on the security of natural gas supply. Nonetheless, unlike on energy investment reporting, work has not progressed far enough for ministers to reach agreement at their 12 March Energy Council. Security of gas supply will then not feature officially on the agenda for the March Energy Council(1).

The slower nature of discussions in Council has also been mirrored in the Parliament's Committee on Industry (ITRE). MEPs in ITRE are only set to vote on a corresponding legislative report - but solely on the 500 or so amendments - on 22 or 23 February. By not voting on the report as a whole, ITRE's rapporteur Alejo Vidal-Quadras (EPP, Spain) is hoping that compromises reached with the Spaniards would be voted in committee before passing to the plenary.

STRENGTHENED ROLE OF MEMBER STATES

Discussion in the Council has clearly strengthened the role of member states. A clear example of this is Article 3. Originally, responsibility for security of gas supply was proposed by the Commission as falling to natural gas undertakings, member states' competent authorities, industrial gas customers as well as the Commission. The Council, however, insists on including member states in the list.

The Presidency now appears to have solved the issue of which customers should be protected'. The definition reached would include all household customers connected to a gas distribution network. Additionally, if the member state concerned so decides, it may also include SMEs and essential social services. These additional customers, however, should already be connected to a gas distribution network and not represent more than 10% of the final consumption of gas.

The compliance date for meeting the infrastructure standard (N-1) has also been set back by the Presidency for one year. Competent authorities must now require natural gas undertakings to ensure compliance by four years after entry into force. In the event of a disruption of the single largest gas supply infrastructure (Article 6), the remaining infrastructure, determined by a complicated N-1' formula, must be able to satisfy total gas demand of the concerned area during a day [The Commission had proposed a period of 60 days - Ed] of exceptionally high gas demand statistically occurring once every twenty years.

WEAKENED REVERSE FLOWS

Also weakened are the Commission's powers as to deciding which infrastructures must ensure the capacity to reverse-flow gas. Explicit exceptions to this demand are now listed as connections to production facilities, to liquefied natural gas (LNG) facilities, to distribution networks and interconnections with third countries. Additionally, the competent authority, established by member states, may request that the Commission exempt an infrastructure from bi-directional flow capacity if this would not "significantly" enhance the security of supply of the member state or region concerned.

As for crisis management, member states insist (Article 9, 3a) that "market players are given sufficient opportunity to respond at each crisis level". …