This a very contentious area of the constitution, which has led to charges that the EU is intent on getting its hands on British North Sea oil – which it probably is.
So contentious has it been that the UK government has been investing a great deal of political capital in neutralising the offending Article (III-157) so much so that the Commission asked for the emasculated remnant to be removed, believing that it could use its Single Market powers to better effect.
Nevertheless, the Article reappeared in the final batch of Irish presidency amendments, the text of which was approved at the Brussels summit unchanged. Actually, there are two relevant Articles, the first is Article I-13, which sets out “Areas of shared competence”, in which “energy” in included.
The substantive Article, though, remains Article III-157, which sets out the objectives of the Union’s energy policy. In establishing an internal market and with regard for the need to preserve and improve the environment, it aims to:
(a) ensure the functioning of the energy market,
(b) ensure security of energy supply in the Union, and
(c) promote energy efficiency and saving and the development of new and renewable forms of energy.
As always, the objectives are to be achieved through “European laws or framework laws” which, in the general order of things, are passed by the Council and European parliament under the co-decision procedure. Since no general method of Council voting is specified, the “default” procedure must therefore apply, which means QMV.
This then is another veto given up by Blair, although there are safeguards. Built into the Article (rather than tagged on as a woolly declaration) is the caveat that “
Such laws or framework laws shall not affect a Member State's right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply…”. And any laws which are “primarily of a fiscal nature” – such as an energy tax - have to be approved unanimously by the Council.
The caveat in the Article is then reinforced by a “woolly declaration” which states that:
“The Conference believes that Article III-157 does not affect the right of the Member States to take the necessary measures to ensure their energy supply under the conditions provided for in Article III-16.” This latter Article refers to steps taken to protect the Single Market in times of war or serious internal or external disturbances.
Generally, the Article is not as bad as it could be, in that it does not overtly permit the EU to take over British oil supplies, but it nevertheless affords it plenty of scope for meddling.