OCR Text |
Show 2 1. WHERE IS THE CONCERN IN THE ENERGY FIELD? A. The Importance of Energy in the Economy. Energy is a factor of economic growth and welfare and therefore has a diffusion effect throughout the whole economic system. It is inextricably linked with the widest spectrum of economic activity. It constitutes an important input at all stages of the production system from the most primary sectors up to manufacturing and distribution. It is also a commodity of international trade, while at the same time forming an important item of private consumption. It is obvious that energy plays a major role in the industrial competitiveness especially in those regions depending on energy imports but also for those enterprises which produce fuels and energy equipment. Changes and/or distortions across industrial sectors and across geographic areas have a major impact in the allocation of resources with consequences, not only on the competitiveness of production and service sectors, but also on the regional development. Energy is also an input for mobility (people, goods, services, tourism, etc.) making the transport system a critical sector of modem economies. In the European Union context, transport is a major issue for the full achievement of the Single Market. Present trends in road and air transport are leading towards even greater inefficiency, congestion, pollution, waste of time and money and general economic loss. B. Security of Supply. Petroleum remains a price leader due to its flexibility in production, transport, storage and use and its dominance in the transport sector. Petroleum reserves (and to some extent natural gas reserves) are highly concentrated outside the major consuming areas. The consuming regions' vulnerability to supply disruptions, the central role of oil prices in shaping energy prices in general and the multiple links of the energy sector with the economy, imply that oil shocks have tremendous macro-economic consequences. C. EnelD' and Environment Energy activity (production, transport, conversion, storage and use) is the main factor of air pollution and it also contributes to water and soil pollution, as well as to other forms of environmental degradation. It is the major (but not the only) contributor to emissions of greenhouse gases. Fossil fuel consumption is equivalent to approximately 80% of net annual additions of the main greenhouse gas carbon dioxide. The energy activity (supply and demand) is also responsible for considerable proportions of emissions of other greenhouse gases, such as methane, N20 and tropospheric ozone. Energy related environmental considerations also widely include SOx, NOx and particulate emissions and the resultant acidification and damage to human, animal and plant life. |