CEPMLP Internet Journal

Energy Law in Europe, National, Eu and International Law and Institutions
by M. Roggenkamp. A. Ronne, C. Redgwell, I. del Guayo, (with a foreword by Loyola de Palacio Valle-Lersundi), Oxford University Press 2001
ISBN 0-19-826068-7, 1097 pages, with extensive tables of cases ( EU and national), tables of legislation (EU and national/international), detailed index, but no consolidated bibliography, £165 (with www.amazon.co.uk)

Over four decades, the energy sector of the European Union was de facto exempt from application of the principles of EU economic integration law (freedom of movement of capital and establishment; non-discrimination). This was so primarily because the energy sector is closely intertwined with the political, institutional and commercial systems and culture of individual states. It is seen as strategic - i.e. governments are under direct political pressure to ensure energy is supplied; this strategic nature has served to protect the energy sector from the integration imperatives of EU law which remained - from 1959 to 1991 - largely theoretical. This has changed through initiatives of the EU Commission, building on the successful UK experience in privatizing energy and creating competitive energy markets and influenced by US models as well. The Commission is the engine of EU energy integration; it also presents EU energy integration as a way to keep EU companies competitive through better energy prices. With several initial directives (utilities procurement; licensing; transit) from 1991 to 1994, signals of changes to come were given. The two key energy directives (electricity 1996; gas 1998) are now the two pillars of an agreed programme of gradual opening of EU energy markets to cross-border trade; the Commission tried earlier to force such opening, but a decision in 1997 by the EU Court of Justice in effect directed the Commission to seek restructuring by secondary EU legislation via the two directives. These are now transposed into the national law of the EU member states; the East European accession countries are all under an obligation (through the Europe agreements) and engaged in a process to adopt the energy "acquis" constituted primarily by these directives. The directives leave considerable leeway to national regulation, with the risk of open, but segregated market in the member states. Measures to deal with now identified obstacles against cross-border energy trade and to promote renewable energy sources have now been tabled by the Commission. Whatever the specific reasons, there is no doubt that the EU directives of the 1990s have contributed to a substantially changed face of the European energy industries. There was in effect no EU energy law before the 1990s, there is now a vigorous body of specific EU energy law, linked with an equally rapidly emerging process of national energy reform. Non- discrimination, access to natural monopoly networks and facilities, unbundling (of accounts; management and perhaps later ownership), lifting of export and import monopolies and similar barriers, gradually widening "eligibility criteria" and liberalization thresholds, setting up of independent regulatory agencies and a EU-wide process of regulatory coordination are all the new features.

It is therefore very timely that a proper book is devoted to this process.

There have been edited books (e.g. McDougal/Waelde, 1994) and books focused on some aspects (Eckert/von Burchard, on gas, 1995; Jarass, 1996), a loose-leaf collection with comment (Tudway, Ed. 1999), but no systematic analysis and presentation so far. The book is edited by four authors who constitute the core of a long-standing EU "Erasmus" programme group of student exchange; the other authors (I have to confess being a co-author of the chapter on the Energy Charter Treaty) include most academics in the EU who deal with energy law, partly associated with the Erasmus EU energy law programme and the International Bar Association's Section on Energy & Natural Resources Academic Advisory Group. The book excels by a very extensive set of tables of legislation, cases and treaties and a detailed index; given the quality of these research and reference tools, a consolidated bibliography would have been a welcome complement. The book was started in the middle 1990s, announced ready for publication several times and finally came out in late 2001. Such a long gestation process is complicated by the fact that most of the EU and national energy laws are currently in rapid motion and a focus that is too topical risks being too rapidly obsolete.

The book starts with a detailed chapter on international regulation of energy activities (Redgwell), something that should provide a helpful global context and constitutes research that is so far unique. This chapter, though, emphasizes in line with the currently dominant paradigm very much environmental issues of energy (marine pollution, maritime transport, nuclear liability, air pollution, climate change. The currently emerging international law areas of GATT/WTO trade law and international investment law (under bilateral and multilateral treaties), with an explosion of relevant arbitral and WTO panel jurisprudence, is omitted. Similarly, the increasing involvement of "civil society", i.e. NGOs with a claim to great moral legitimacy, and the concomitant debates and problems are not dealt with here. The next chapter, equally useful, is a description of the energy activities fo selected international organizations. This represents useful research, but there is a strong Eurocentric accent to it. OPEC, possibly the most influential international energy organization, is not dealt with, as are many other regional, non-EU international organizations. EU law does have - like the EU process - a certain navel-gazing characteristic. The survey of international organisations' activities in the energy sector (Krieger/de Boer) relies largely on these organisation's self-presentation and reference in constitutive documents. There is little appreciation for the "real" role of these organizations in the field of energy and the role of energy for such organizations. It is an illusion to present reality by looking only at organizational propaganda and formal organizational constitutions. The shifting importance of energy in these institutions, their changing interest and influence, their influence (large in some cases, e.g. specialized organizations such as the IMO, small in most other cases, changing from the 1970s to the 1990s (e.g. OPEC and UN) is not reflected at all in this most formal and descriptive survey. Only the IEA, the international energy programme attached to the OECD is analysed well and in-depth by Helga Steeg, its well known former Executive Director. The IEA is one of the few energy-focused international agencies, though it has also been described as the manager of an energy research institute with an emergency sharing programme that has never been activated in 30 years; it is again surprising that OPEC is barely mentioned in the IEA section, though the IEA programme was explicitly founded as a counterweight to OPEC - a case of mental suppression of disliked facts most probably. NGOs get a short shrift mainly because they do not fit into a classical public international law perspective which underpins these two chapters.

The Energy Charter Treaty and recent developments in presented by Bamberger (the former IEA General Counsel and chairman of the ECT legal drafting committee), Linehan (one of the ECT's increasing group of former Legal Directors) and this reviewer. I am refrained from a (self-)critical review here, but suggest that a number of interesting current ECT issues (accession from energy producers (e.g. OPEC) and consumers (e.g. China) outside the original target group of East-West countries) deserves greater attention, but also the influence of the rapidly increasing NAFTA investment jurisprudence on the substantive content of the investment disciplines of the ECT.

A very long chapter of 110 pages (Cross, Hancher - another member of the group of former ECT legal advisers & Slot) is perhaps the core of the book. It recounts in considerable detail what can be termed "EU energy law" in the proper sense. The first part deals with the "primary EU law" deriving from the Treaty and possibly acquiring a certain "energy specificity", namely internal free trade law, competition and state aids. The second part deals with the main directives (utilities procurement; upstream hydrocarbon licensing; gas and electricity directive; with some reference to efforts of the EU to promote renewable energy in implementation of its Kyoto climate change obligations. The chapter is mainly a very detailed description, often paraphrasing of the various sections of the directives, sometimes with some cross-reference (e.g. gas to electricity directive) and comments on possible interpretation. New initiatives that were already apparent from 2000 and led to proposed measures to reduce impediments to cross-border energy trade are not discussed - the chapter must have been completed way before the publication of the book. Similarly, the increasing influence of the environmental theme (Kyoto implementation; carbon tax debate; the emerging free, EU-wide trade, competition and state aids rules implications for trade in energy from renewable resources) is barely touched. Similarly, one would have expected an in-depth discussion of the international dimension of EU energy law and policy, its participation in the several trade, economic and environmental treaties discussed earlier in the book by Redgwell, the energy implications of accession and the various-titled EU economic cooperation agreements (with Russia, other CIS states; Mediterranean states; Gulf Cooperation Council; the Lome-Cotonou group of ACP countries), but this issue seems to have disappeared in some gap between the international and the EU chapter. Possibly, this lacuna also reflects the inward-looking attitude in much of the EU process.

National studies on Denmark (Ronne), France (Helvin), Germany (Pielow/Koopmann), Italy (Nocera/Roggenkamp), Netherlands (Roggenkamp), Norway (Arnesen et. Al.), Spain (del Guayo) and the UK (Dow) follow. The problem with these national reports is that all these countries (except the UK) are in the very process of restructuring their energy sector, privatizing public monopolies, liberalizing anti-competitive and corporativist monopolies, partly for self-interest and internal pressure, partly under the impact of the EU directives which need to be transposed into national law. It is therefore difficult for these chapters to be reasonably up-to-date. Given the longer-term nature of the book and the short-term character of many regulatory changes now happening, it might have been better if less emphasis was placed on often transient legal details and more on the particular adaptation challenge and response in these member countries. Similarly, a survey of the response of accession countries - if only more in terms of the challenge-and-response characteristics would have complemented the national-survey part of the book.

A strong conclusion by the four editors ends the book. It raises the new organizational forms of energy regulation now emerging and summarises important changes in the upstream oil, gas and coal area, the gas supply system, the electricity supply system, and issues of environment and non-fossil fuel resources. A distinct chapter on EU nuclear law would have benefited the book, as it is not easy to deal with nuclear law as a subset of regulation under the international, the EU and the concluding chapter. Nor here, nor in the EU section, can one find any substantial discussion of the significant Madrid-Florence process whereby the EU Commission, the national regulators and industry consult on making the newly emerging system work. This informal process, first, facilitates legislation by the EU; it helps to harmonise national regulation and it allows to inject technical expertise into the EU-wide and national regulatory process, apart from creating some form of EU-wide regulatory community. Similarly, the issue of interconnectors - infrastructure necessary to serve as a foundation for cross-border energy trade - is not dealt with in any cohesive fashion, though mentioned under other headings (primarily competition law and access).

This two-kg book represents a heavy investment by its editors and authors. It is at this time a necessary investment for readers and users who wish to get an overview of EU and international energy law or who want to get an overview of the energy law in the selected (not all) EU member states. Its research apparatus (apart from the missing consolidated bibliography) is also helpful. The weaknesses of this massive editorial enterprise lie in the fact that a book is published once at a specific time, but the subject flows fast. A more concentrated effort to capture the major concepts, the forces, interests and actors at play and with influence over the process of regulatory production would have helped many readers more than the perhaps sometimes excessive attention to paraphrasing existing laws without putting those into a conceptual, economic, political and institutional context. The various omissions reflect the subject: The EU and its institutions (and here its academics) are so focused on the often arcane minutiae of the inwards-oriented integration process that they lose out of sight the relative role of the EU and its energy sector in the wider world, and the mutual influencing between the outside and the inside. But overall, this is a high-quality, very useful work of general reference on EU Energy law matters that should and will be consulted by academics (mainly lawyers) and professionals dealing with the ongoing process of national and EU-wide restructuring of the energy sector and acceleration of cross-border trade.

Thomas Wälde
email : twwalde@aol.com
www.cepmlp.org
(added 05 March 2002)

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