The unequal distribution of the world’s natural resources is a longstanding problem. In comparative terms, nature has served Europe meagrely when it comes to energy resources. In the face of ever-rising demand, the exhaustion of domestic resources and rising import dependency due are the logical consequence. The key question is the following: Is such import dependency just another part of the global division of labour creating mutual benefits for exporting and importing countries alike, or does this situation constitute a strategic threat to European independence and economic growth? This paper proposes to assess this question in seven chapters. Following the Introduction, Chapter 2 will assess the state and security of European energy supplies in the international context. Chapter 3 will provide a conceptual framework for addressing security of supply issues. Chapter 4 will discuss developments in a number of important geopolitical (OPEC, Russia, the United States) that are likely to have a major influence on the security of energy supplies in Europe. Chapter 5 will discuss a number of intra-European issues likely to have a bearing on the demand and supply of energy. Chapter 6 will make a number of concrete proposals that policymakers can adopt now to improve the security of European energy supplies. Chapter 7 will conclude.

China’s blistering economic growth has made access to adequate energy supplies an increasingly important priority. It is the world’s second largest consumer and third largest producer of primary energy. From 2000 to 2005, China’s energy consumption rose by 60 percent, accounting for almost half of the growth in world energy consumption. The country is able to meet more than 90 percent of its energy needs with domestic supplies—largely because of abundant coal reserves and a coal-based economy. However, it imports almost half of the oil it consumes.

In the past seven years, Russia has experienced a remarkable change of fortune. Following economic and political crises in the 1990s—culminating in a state of virtual bankruptcy in August 1998—Russia has racked up successive years of economic growth and low inflation. Since 1999 its economy has been growing strongly and consistently. In the 1990s the Russian government regularly ran massive budget deficits. Today, it is accumulating even larger surpluses. Similarly, its balance with the outside world has reversed. A decade ago Russia was deep in debt to foreign lenders, including the International Monetary Fund (IMF), and nearly devoid of foreign currency of its own. Today, the country has no IMF debt and its trade balance and foreign exchange reserves are among the largest in the world.