January 28th, 2016

How Does Big Oil & Gas Get Its Way?

By Geert Decock

Food & Water Europe's Geert Decock

Food & Water Europe’s Geert Decock

Last week, I received a couple of calls and emails about the announcement that the gas sector will receive EUR 207 million for a total of nine so-called “Projects of Common Interest”. The bulk of this taxpayers’ money – just under EUR 180 million – will go to a project of a Romanian gas distribution company to build a gas pipeline connecting Member States in the southeastern part of the EU to a gas hub in Austria. To put this in context, six “Projects of Common Interest” investing in better-connected grid infrastructure received EUR 10 million. What can explain this grotesque difference? And how does Big Oil & Gas get its way?

The tactic of choice of Big Oil & Gas is an intensive lobby effort vis-à-vis policy-makers, who should be representing the public interest: ‘Open doors’ or ‘revolving doors’, it does not matter … as long as the message arrives. This has proven to be a particularly effective tool. The doors of Climate & Energy Commissioner Arias Canete – with his private interests in the oil storage sector – have always been open to the fossil fuel industry. Of the 78 meetings with representatives of the energy industry that Mr. Canete had in his first year in office, there were 66 meetings with representatives of fossil fuel companies (see the CEO report ‘Cooking the planet’). Going through the list of meetings held by the Director-General of the energy department of the European Commission also shows that big businesses and fossil fuel companies are very well represented. One last example: the former head of European strategy for the U.K. Department of Energy and Climate Change represents the whole range of upstream, midstream and downstream oil and gas companies, since working for the consultancy FleishmanHillard in Brussels. Probably continuing the ‘great’ (ahem!) work to block any stringent rules on fracking coming from Brussels.

This result of this lobby campaign is that one of the wealthiest industries in the world continues to receive public subsidies to invest more into gas infrastructure that will likely turn into stranded assets into the not too distant future. The excessive influence of Big Oil & Gas can also be read in some leaked proposals of the European Commission that seeks to address the reliability of gas supplies to Europe. On the one hand, the European Commission’s proposal for a Liquefied Natural Gas (LNG) and gas storage strategy considers that EU funding and loans from the European Investment Bank “can play a role in closing the gap in commercial viability of [LNG] terminals that are particularly important for security of supply”. While on the other hand, its proposal for an EU Strategy on Heating and Cooling wants Member States to get rid of “inefficient fossil fuel subsidies” for consumers.

Don’t get me wrong! We’re all for eliminating the subsidies for fossil fuels. But then the EU needs to address ALL subsidies for coal, oil and gas. When money goes to consumers, the Commission talks about inefficient subsidies. When money flows to Big Oil & Gas, the Commission uses euphemisms like, “projects of common interest”, etc. This kind of language shows the power of the fossil fuel industry most clearly. The results? Socialism for Big Oil & Gas, capitalism for the rest of us!

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