Background
The need to maintain certain volumes of crude oil and oil-based products is quite evident in countries where oil accounts for an important share of the energy-demand structure and it is difficult to guarantee supplies as a result of not having their own production.
Even before the Second World War there already existed strategic stocks of oil-based products for military purposes. It was not until 1950, however, when a combination of greatly increased consumption of petroleum by-products, mainly for industry and transportation, and a new economic and political scenario in Middle East countries from which a significant share of the supplies came, clearly showed the need to set up minimum security stocks of this type of products.
The various war conflicts taking place in the Middle East during the 1960’s and 1970’s, highlighted again the need to set up stocks, intensifying the actions taken by Governments on these issues.
To face the situation, the European countries reached a preliminary agreement in 1968 to coordinate emergency reserve policies by maintaining mandatory minimum stocks in a volume equivalent to 65 days’ consumption. In 1972, the level increased to 90 days, which are the current compulsory minimum stocks.
Similarly, the creation of the International Energy Agency (IEA) in 1974 meant a fundamental step in coordinating the policies to be applied by OECD consumer member countries in the event of supplies being interrupted. To this end, participant countries should keep available stocks equal to net level of their net imports over at least 65 days. In 1076 the obligation was increased to the current level of 90 days.
The Agency’s main objectives are: To maintain and improve emergency plans; promote rational energy policies; develop a system for permanent information on the oil market; improve global demand and supply structures by developing alternative energy sources and increasing energy efficiency; and to cooperate in the coordination of environmental energy policies.
Regarding natural gas, its growing importance in terms of energy supply has led some countries, as is the case with Spain, to take steps to ensure the security of supply for this type of fuel.
Within the European the essential issues relating to energy supply security have been laid down in the Energy Green Paper. “A European Strategy for Sustainable, Competitive and Secure Energy” .Thus, the paper analyses aspects pertaining to security in supply and a re-definition of the EU’s stance on strategic oil and natural gas reserves and the prevention of interruptions in supply.
The Green paper on Energy supplies represents a significant stage of development in the European Union’s energy policy. In order to achieve its economic, social and environmental aims, Europe must face major challenges on energy: a growing dependency on imports, high-volatility in hydrocarbon prices, climate change, increasing demand, and obstacles to the energy internal market. The EU is the second largest world energy market and should take advantage of the fact that it is the world leader in managing demand and fostering renewable energy sources.
The Commission calls on the Member States to provide the means to develop a European energy policy around three main axes:
- Sustainability, to actively fight against climate change, fostering renewable energy sources and energy efficiency;
- Competition, to improve the EU network’s efficiency through the development of the energy internal market;
- Security of supplies, to better coordinate internal EU energy supply and demand in an international context.
The Green Paper covers the priority intervention sectors for which the Commission proposes specific measures in order to implement a European energy policy. These areas, ranging from development of the internal energy market to a common external energy policy, should allow Europe to provide itself with a sustainable, competitive and secure energy for the next few decades.
In November 2008 the European Commission agreed its “Second Strategic Energy Review-Securing our Energy Future” which represented a broad package of measures geared to achieving greater energy security. As a follow up to the objectives set in this second review, the EU Council approved on 12 June 2009 a new Directive concerning the obligation by Member States to hold minimum stocks of crude oil and/or oil-based products.
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