A two page document produced by the Council of the European Union Council Committee (EUCC) on May 27th 2014, outlines the desire of the EU to lift EU-US trade restrictions. This would allow the US to freely trade oil and gas exports across the atlantic to the European Union.
As a result of encouraging more crude oil and natural gas exports to the EU, the proposal would no doubt lead to an increase in fracking unconventional shale gas wells in the US, and would push more climate-disrupting fuels into the European Union as a whole, dealing a significant blow to efforts to avert climate change.
The EU made no secret of its desire before in July 2013 for the right to import US shale oil and gas.
The 2014 leaked document, obtained by the Washington Post, cites the current Ukrainian crisis as a driver for the desired change in trade regulations as the EU looks to strengthen its energy security over the next few decades.
In summary, the document outlines six main points:
1) That the EU and US should continue to negotiate Energy and Raw Materials (ERM) commitments that would improve transatlantic ERM rules and thereby strengthen diversity and strength of supply, consumers and corporations. The EU propose the inclusion of a new chapter within the Transatlantic Trade and Investment Partnership (TTIP) that would accommodate this goal.
2) For the EU and US, TTIP would benefit from the inclusion of such a chapter for the following reasons:
a) Improving International rules.
As things stand, it is easier for the EU have to source ERM from third party countries, reducing their ability to import shale oil and gas from the US. The EUCC also state that improving international rules will permit EU-US trade for US oil and gas resources, and improve regulatory policy for corporations.
b) Geo-Political factors.
The new TTIP chapter that aims to improve ERM trade across the atlantic would signal to other nations globally that there exists a strong relationship between the EU and US. The new chapter would be required to be all inclusive, streamlined, and would benefit partners of both the EU and US (for instance EU access to ERM from Canada and Mexico who are partnered with the US.)
c) Security of Supply
Previously, the energy supply provided to the EU included imports from Russia, that travelled in through the nation of Ukraine. However in light of the Ukrainian conflict, imports from Russia have reduced, which weakens the energy supply granted to the EU. As a result, the EUCC wish to bolster the security of their energy supply with imports from the US. A new ERM chapter in TTIP, would combine EU support for regulation on one hand, while also lifting bilateral restrictions on gas and crude oil on the other.
d) Systematic Issues
Here, the EUCC points out that, to an International audience, it looks awkward when the EU and US are such close allies, yet what exists between them are rules and regulations that reduce their ability to trade ERM with one another, the result being a reduced economy for both parties.
3) The EUCC have pointed out that there has been notable lack of desire for such a chapter from the US. Furtherstil, the EU still waiting for a clear signal of desire from the US on the matter.
4) The US has shown lack of effort for implementing legally binding rules which can lift trans atlantic trade restrictions for oil and gas to the EU. As a result, the EU proposes to produce a legally binding commitment in the TTIP guaranteeing the free export of crude oil and gas resources that fast-tracks licenses for exports to the EU. These licenses would be granted automatically and expeditiously in such a manner that does not require effort by the US, making no change to their existing legislation.
5) The EUCC propose that new rules should accommodate both existing existing EU and US legislation in order to increase the ease of the process of trading ERM transatlantically
6) In conclusion, the EU ask for teh US to signal their support for a new chapter in TTIP that would encourage and facilitate ERM trade of oil and gas from thE US, to the EU. This would build upon political support recently expressed by the U.S. Administration.
To read the leaked energy paper in full, click here.