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Mirror-mirror on the wall…

Mirror-mirror on the wall, who has the most chances of all?

This brief looks into the runner-ups to one of the most coveted jobs in Brussels, that of the EU Energy Commissioner. Given that Member States (MSs) do not have the same pool of resources, the EU has had so far limited leverage on national energy policies, but the Ukrainian crisis could or, at least, should change that and lead to greater EU wide coordination on energy policy. DG energy and its leader, the commissioner, will be a key component in that process. The new Commission will also decide how shale gas regulation at EU level will be dealt with going forward, especially whether the current non-binding recommendation will be considered enough or further legal initiative will be taken. This analysis weighs the chances of each main contender for this top job, and assesses strengths and weaknesses for each candidate, in an attempt to shed some light on the most likely outcome for the appointment of the next Energy Commissioner, and how that may impact the Commission’s stance regarding further shale gas regulation in Europe.

A new group of 28 commissioners, one from each EU member state (MS) will be appointed this fall for a 5 year term. Countries will make announcements to put forward a candidate by end of August, the latest. There are currently negotiations between MSs in order to secure relevant portfolios. In fact, the rule is “portfolio first, candidates second”. The commissioners will undergo confirmation hearings in September and a vote of confidence in October. Although the European Parliament (EP) can vote or veto only the Commission as a whole (not individual commissioners), former European Commission (EC) presidents usually prefer to propose new candidates, if the Parliament is critical, to avoid the situation of the whole Commission being rejected. The European Parliament will vote on whether to approve the new commissioners on October 20-23, and, once approved, they will be appointed on November 1^st. The most influential countries (Germany, France and the UK) are assigned the most important posts. The energy commissioner position is currently held by Günther Oettinger, a German politician from Angela Merkel’s Christian Democratic Union who has been re-nominated for the same portfolio.¹ The UK, which currently holds the foreign affairs post has regarded that portfolio as a mistake, since it had little impact over economic decisions in the EU and is now seeking to get the internal market, competition, trade or energy portfolio instead.² It is likely that Pierre Moscovici, France’s finance minister from 2012 to 2014, will become the country’s next Commission nominee for an economic portfolio, although nothing was officially confirmed yet.

In the intricate negotiation process behind closed doors, many factors are at play. The composition of the new commission will have to reflect principles such as gender balance (40%, meaning 10 out of 28, have to be women), political group, and geography. The Energy Commissioner country of origin is a factor that may offer some clues, but predicting how the position of the EC headed by Jean-Claude Juncker will evolve on shale gas is an equation with many variables: public opinion, interaction between

DG Energy and DG Environment, industry lobby, how efficient each MS will implement the EC Recommendation of January 22, 2014, and whether shale gas production will take off at all in Europe.

For the purpose of this brief, we looked into the candidacies that have been under consideration over the past few months and have been credited with most chances to get the job: Günther Oettinger, Andrew Lansley, Jonathan Hill, Radoslaw Sikorski, and Razvan Nicolescu.

1.Günther Oettinger, 60, is the incumbent energy commissioner who took over the portfolio in 2010 as Germany’s nominee. He has been a Minister-President of Baden-Württemberg (admittedly one of the best performers among the German Länder) in 2005-2010 and, since 1984, a member of the regional Parliament. Between 1982 and 2005 he has served as a lawyer at several audit and tax consultancy firms. Oettinger is a local politician who had no position at national level.

Why this benefits Germany:

• Keeps and shapes a key EU portfolio;
• Supports renewable energy;

Future of shale gas development in Germany and EU:

• Oettinger has urged Germany and France to consider the opportunity to exploit shale gas;
• Considers that shale gas has the main advantage of putting pressure on Gazprom;
• Has stressed the importance of understanding local environmental risks attached;
• Keen advocate of an European approach to energy policy instead of nationalists ones;

Drawbacks:

• During his tenure there was no categorical (binding) regulation of shale gas development;
• Overall, he has maintained the status quo in the energy sector;

 

Andrew Lansley was the most likely UK candidate for the EU energy commissioner role, but ultimately was not officially confirmed by the UK. Instead, Great Britain went with Jonathan Hill as its nomination for the 2014-2019 Commission. Both are included in the analysis below:

2.Andrew Lansley, 57, is the leader of the House of Commons and a Conservative member of current cabinet. He is regarded as technocratic, moderately eurosceptic and loyal to the prime minister. Lansley became an MP in 1997, and became health secretary in 2010, and was at the head of a reform of Britain’s National Health Service which was watered down after provoking a storm of controversy. One of his main drawbacks is the fact that he was sacked in 2012 as health secretary after the failed introduction of his proposed health reforms, and is often perceived as a poor administrator with little experience of Europe.

3.Jonathan Hill, 54, is the official UK candidate for the EU commissioner role (UK is eyeing internal market, competition or trade, but energy portfolio is not out of the question). He is often described by media and political analysts as a relatively unknown lawmaker, a former education minister with a low profile. Hill was the Leader of the House of Lords and was responsible for coordinating the ruling Conservative’s party legislative business. He is not regarded as a hardline eurosceptic and has worked with PM John Major during the 1990s as a political secretary during the negotiations on the Maastricht Treaty. He has founded a lobbying firm in 1998 and, has since gone back and forth between public and private sector. Hill is perceived as being engaged with the business community and having a pragmatic approach to policy making and the ability to strike backroom deals.³

Why would this benefit UK:

• Opposes ambitious renewable and energy efficiency targets;
• Supports state aid for nuclear projects and is pushing for these to be accepted under EU laws;
• UK is increasingly dependent on gas and electricity imports and is interested to have a say in this area;

Future of shale gas development in UK and EU:

• UK supports shale gas development and has been a leading voice for shale gas exploration as a vital component of any future energy mix;
• If exploitation is successful in the UK, other EU member states are likely to follow;
• Will most likely maintain the status quo in terms of regulation;

Drawbacks:

• Hill is a revolving door ex-lobbyist and his nomination comes at a time when EC president Jean-Claude Junker pledged to increase lobby transparency and set up a mandatory lobby register; Hill is likely to be rejected by Juncker. Even Martin Schulz has expressed worries regarding the integrity and euroscepticism of the candidate;⁴ Nevertheless, Britain’s current commissioner, Catherine Ashton had a low profile too and, the same job as Hill, before she won the EU diplomatic portfolio 5 years ago.
• UK is more keen on scoring the trade portfolio which will put Britain in charge of negotiating EU’s trade partnership with the United States (one of the biggest topics on the EU agenda) and does not directly target the energy portfolio;
• Having a British commissioner for energy is likely to bring a more individualist approach in terms of energy policy, not a European policy;

4.Radoslaw Sikorski, 51, is the current minister of foreign affairs in Poland. He is perceived as the perfect fit for the EU’s head of diplomacy to replace current UK commissioner as EU foreign policy chief. Nevertheless, Poland is especially keen on getting the economic or energy portfolio in the next European Commission. Sikorski also played a key role in the handling of the Ukraine crisis. He is portrayed as a transatlanticist who has spoken critically on Russia’s foreign policy in the past. The recent tape scandal in Poland is believed to have somewhat diminished the strength of his bid for the foreign affairs portfolio, as did the newly voiced requirements to have a socialist and a woman as the EU’s next foreign policy chief.

Why would this benefit Poland:

• Proposal for an energy union (common purchases of gas by the EU from Gazprom);
• Promotes “rehabilitation of coal” as a source of energy, with the aim to boost Poland’s ailing coalmining industry;

Future of shale gas development in Poland and EU:

• Shale gas industry will be propped up in Poland and there will be minimum requirements to carry exploration and exploitation of unconventional resources in Europe;
• Given the pro-American stance and cheerleader position of Poland on the shale gas topic, further regulation is not to be expected.

Drawbacks:

• country’s pro-fracking and pro-coal stance runs against French and partially German policy;
• perceived as belligerent towards Russia;
• advocate for a burden sharing agreement on CO2 emissions (in the recent debate on Europe’s climate and energy targets for 2030), where wealthier nations commit to more ambitious targets – a proposal opposed by UK, France and Germany;

5.Razvan Nicolescu, 36, is the current Romanian energy minister and has run the Public & Regulatory Affairs department of OMV Petrom in Romania. He has represented Romania on energy issues at the European Commission (2006-2008) and chairs the Administrative Board of the Agency for the Cooperation of the Energy Regulators (ACER) until January 2016. An ambitious public affairs professional whose entire career has been related to the energy sector, he may be a strong contender representing Romania’s bid for the energy portfolio going forward, in the composition of future EU Commissions (2020 and beyond).

Why would this benefit Romania:

• Advocate for implementation of Third Liberalisation Package in energy;
• Romania is best endowed in natural resources in the SEE region, well positioned for becoming a regional gas hub, thus it is well equipped to seek a more active role in energy policy making and contribute at EU level as a representative of this region;
• More liberal stance concerning state owned enterprises (SOEs): promotes IPOs, PPPs, corporate governance at SOEs, etc;

Future of shale gas development in Romania and EU:

• Against specific regulation for shale gas;
• Is aware and follows developments in Poland (his colleague in ACER, Piotr Grzegorz Woźniak is the junior minister for shale gas at the Environment Ministry in Poland);
• Advocates for introducing more gas in country’s fuel mix (OMV Petrom and Exxon Mobil have made significant offshore discoveries in the Black Sea);

Drawbacks:

• the energy portfolio is probably out of Romania’s reach;
• Razvan Nicolescu was just recently appointed Romania’s energy minister and did not have time to prove his capabilities in this role. One of his most significant tests as a minister are: liberalisation of the gas market – implementation of Third Energy Package, IPO of state-owned energy companies, update of Romania’s energy strategy, implementation of corporate governance at the SOEs.
• Romania is eying a re-nomination of Dacian Ciolos for the agriculture portfolio. However, until now, no EU Commissioner has served two consecutive terms with the same portfolio. If Germany succeeds to have Oettinger confirmed for a second time for the same portfolio [energy], this will create a precedent favorable for Romania’s candidate, Mr. Ciolos, to remain Commissioner for agriculture. However, according to latest reports, Germany is interested to have Oettinger at the trade portfolio, a position from which he can influence the negotiations for the Transatlantic Trade and Investment Partnership TTIP, as chief negotiator.⁵

Selecting the composition of the Commission College is a highly dynamic and competitive process, with constant give and takes based on political considerations, country preferences, gender balance and other principles, as well as the vision of the EC President. The outcome of such a process is very difficult to predict. For now, Romania is probably not yet ready to target the energy portfolio, a heavy weight position reserved for an old MS with significant economic clout such as Germany, UK, France, or Netherlands. Candidates aside, as latecomer to the EU, Romania must mature within the EU framework first before taking on the responsibilities of such a portfolio, one that would require a gentle (but firm) handling of Europe’s sensitive energy relationship with Russia. For Poland, getting the energy portfolio would be the next best thing after the foreign policy one. It would shape the EU’s energy policy to be more representative of Central and Eastern Europe’s interests, and would lend decisiveness to push through a true common European energy policy. Great Britain has confirmed its nomination of Jonathan Hill (former leader of the upper house of parliament; centre-right), aiming for an ‘economics portfolio’, so energy is still an option. If Günther Oettinger is assigned to be Trade Commissioner, this leaves Jonathan Hill as the most probable candidate for the energy portfolio, unless another (surprise) candidate emerges or a bargain is struck that brings forward a compromise candidate. Such a last minute candidate could come from any country, particularly given the high political status of many candidates⁶: former Prime Ministers (Finland, Estonia, Latvia, potentially France and Slovenia), former and current foreign affairs ministers (Italy, Netherlands, Greece, Hungary, Belgium) or former finance ministers (Netherlands, France).

 

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FOOTNOTES:

1. Germany puts Oettinger forward for second term as EU commissioner, Toby Vogel, European Voice, June 23, 2014: http://www.europeanvoice.com/article/oettinger-to-remain-energy-commissioner/
2. According to a policy document leaked in March 2014, PM David Cameron pushes for the energy portfolio: http://www.breitbart.com/Breitbart-London/2014/04/26/Britain-secret-memo-eu-commisioner
3. UK PM David Cameron nominates revolving door ex-lobbyist as EU commissioner, Corporate Europe Observatory, July 16, 2014: http://corporateeurope.org/revolving-doors/2014/07/uk-prime-minister-david-cameron-nominates-revolving-door-ex-lobbyist-eu
4. Cameron’s nominee for EU executive branded ‘radical anti-european’, by Ian Traynor and Rowena Mason, The Guardian, July 16, 2014: http://www.theguardian.com/politics/2014/jul/16/cameron-nominee-eu-executive-radical-anti-european
5. Merkel eyes trade portfolio for Oettinger, Euractiv, July 22, 2014: http://www.euractiv.com/sections/eu-elections-2014/merkel-eyes-trade-portfolio-oettinger-303611
6. For a list of confirmed, expected, possible and speculative candidates for the 2014-2019 European Commission, please see:The names in the frame, European Voice, July 22, 2014: http://www.europeanvoice.com/article/the-names-in-the-frame/