VZCZCXRO8179
RR RUEHAG RUEHROV
DE RUEHFR #0018/01 0031556
ZNY CCCCC ZZH
R 031556Z JAN 07
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 3997
INFO RUCNMEM/EU MEMBER STATES
RUEHNY/AMEMBASSY OSLO 1441
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 PARIS 000018 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR INR, EB/ESC, EUR/WE, EUR/ERA, NEA/NGA 
 
E.O. 12958:  01/03/2022 
TAGS: PINR EPET ENRG KPRP ECON FR
SUBJECT:  FRANCE'S ENERGY SECURITY POLICY 
 
Classified by Econ Minister Thomas White for Reasons 1.5 (d) and 
(e). 
 
Ref:  a) State 181979, b) Paris 7604 
 
¶1. (C) Summary.  The GOF is enhancing its energy security 
through diversification of supply sources and increasing the 
percentage of nuclear and renewables in its energy mix, while 
decreasing the use of oil and coal.  While these changes are 
guided partially by a desire to become more energy independent, 
it is also driven by France's Kyoto climate change obligations. 
The Government also wants to reduce France's energy consumption 
by a factor of four by 2050.  France backs the development of 
cross-border power lines between EU members to improve their 
ability to cope with the shut down of a power plant or key power 
lines.  The GOF liaises regularly with energy power producers 
and distributors to work out contingency plans in case of supply 
disruptions.  It also manages strategic oil and gas reserves. 
End summary. 
 
¶2. (C) This cable responds to reftel request for information on 
France's energy security policies, with information garnered 
from meetings with the Ministry of Economy, Finance and Industry 
General Directorate for Energy and Raw Materials Assistant 
Secretary-equivalent Sophie Galey-Leruste, Oil and Gas Supply 
 
SIPDIS 
Office Head Fabrice Noilhan, and International Strategy Bureau 
Head Jean Lamy, as well as GOF information provided during those 
December meetings. 
 
France's Strategy to Improve Energy Independence 
 
¶3. (U) Since the two OPEC oil price increases in the 1970s, a 
leading concern of French energy policy has been to reduce 
France's vulnerability to supply disruptions.  This has entailed 
a three-pronged strategy:  reducing the country's dependence on 
oil by diversifying its energy mix; increasing the share of 
imported energy from dependable countries such as the UK and 
Norway; and raising the share of the energy mix met by domestic 
production.  One consequence is that the government has 
encouraged the replacement of oil by electricity (most of it 
domestically nuclear-generated) and gas (mostly imported) as a 
source of domestic heating. 
 
¶4. (U) France's energy sector accounts for 2 percent of total 
GDP and employs 233,000 people.  In 2006 primary energy 
consumption amounted to an estimated 276 million tons of oil 
equivalent (TOE), making France's energy market the 
second-largest in the EU after Germany.  Nonetheless, France is 
poor in natural energy resources, in contrast to several 
European Union (EU) countries that benefit from raw materials 
(coal in Germany and Spain, oil, gas, and coal in the United 
Kingdom (UK), and gas in the Netherlands).  France imports 
almost all of its oil, natural gas, and coal needs. 
 
Nuclear Power - Strong and Now Due to Increase 
 
 
¶5. (SBU) To ensure the security of its energy supplies, France 
gives priority to developing nuclear energy and renewable 
energies.  Locally produced nuclear power generates eighty 
percent of France's electricity needs and forty percent of its 
overall energy needs.  After the first oil shock, when oil 
accounted for 61 percent of France's energy needs, the GOF 
commissioned 59 nuclear power plants, so that now, oil accounts 
for only 34 percent of France's needs, mostly in the 
transportation sector.  In the 1980s, France overtook Japan and 
the Soviet Union to become the world's second-largest producer 
of nuclear-generated electricity after the U.S. 
 
¶6. (C) France just commissioned its first nuclear power plant in 
over twenty years, due to be completed in Normandy in 2020.  The 
French public is much more accepting of nuclear power than are 
Americans.  The GOF held two public sessions prior to 
commissioning the nuclear power plant.  The French public had 
little resistance to the plant itself, but the public debate 
focused on the routing of the high tension wires carrying the 
electricity from the plant, with no one wanting the wires 
passing through their neighborhood.  With the progress in 
nuclear power, domestic production now supplies half of France's 
energy needs.  France is a net exporter of electricity, but its 
dependence on imported oil makes it a net importer of energy 
overall. 
 
Renewables Also Favored 
 
¶7. (SBU) France wants to increase the percentage of renewable 
energy in its energy mix.  Renewable energy, such as hydro, 
biofuels, solar power, and wind power accounts for seven percent 
of France's energy mix, and the GOF intends to increase this 
 
PARIS 00000018  002 OF 003 
 
 
percentage to ten percent within the next five years.  The GOF 
is emphasizing the development of biofuels, since it believes 
that this is the most cost effective alternative.  The GOF would 
also like to increase the number of windmill farms, but the "not 
in my backyard" (NIMBY) syndrome is hampering progress.  The GOF 
is planning for the establishment of new windmill farms off the 
Atlantic Ocean coast as a result. 
 
Diversification in Sourcing Gas 
 
¶8. (C) The GOF also wants to decrease the chances of supply 
disruption of gas by diversifying the sources of supply, 
ensuring that no more than one-third comes from any one 
supplier, with Norway, the Netherlands, Russia, and North Africa 
being the main suppliers.  Gas accounts for 15 percent of 
France's total energy needs.  Norway is the largest supplier, 
with 26 percent of France's gas market.  Netherlands, via other 
North Sea fields, supplies another 20 percent.  On December 19, 
Gaz de France (GDF) and Gazprom signed a contract for Gazprom to 
deliver 12 billion cubic meters (bcm) of gas a year to GDF until 
2030 and permit Gazprom to market 1.5 bcm a year directly to 
French industrial customers.  This agreement will boost 
Gazprom's strategy of increasing margins by selling gas directly 
to end-users rather than wholesaling it to distributors.  GDF 
also contracted to take 2.5 bcm of gas a year from 2010 from the 
Nordstream pipeline, which will connect Russia directly to 
Germany.  With this accord, Gasprom cemented its status as the 
second largest supplier of gas to France, accounting for about 
23 percent of France's gas supply.  This percentage does not 
differ significantly from the historical average.  During the 
week of December 11, GDF also signed a 20 year gas supply 
contract with Algeria's state-owned oil and gas company, 
Sonatrach, which will supply about one bcm of natural gas a 
year.  Algeria supplies 13 percent of France's gas market. 
Nigeria and other markets account for the remaining 19 percent. 
 
¶9. (C) France's gas infrastructure has five regions that are not 
interconnected.  The GOF wants to ensure that infrastructure is 
built so that only two regions are not interconnected.  The GOF 
is also expanding its infrastructure of plants that can turn 
liquefied natural gas (LNG) back to gas.  France now has two 
regasification plants.  It plans to add one on the Mediterranean 
Coast and two to three on the Atlantic Coast. 
 
Oil Supplies Cut and Diversified 
 
 
¶10. (C) France also diversified its oil supplies after the 1970s 
oil shocks.  In 1973, 71.5 percent of its oil came from the 
Middle East.  In 2004, only 28 percent originated there.  France 
sourced another 29 percent of its oil from the North Sea, 23 
percent from the former USSR, 13 percent from Sub-Saharan 
Africa, and 7 percent from North Africa.  Our interlocutors were 
impressed with the USG's transparency in publishing oil stocks 
believing that increased transparency can diminish volatility of 
energy prices.  France seeks to publish oils stocks on the 
European level.  This effort would also include completing an EU 
directive that would increase transparency on gas storage 
facilities. 
 
Coal Use -- Low and Decreasing 
 
¶11. (U) France still has reserves of coal, but the last coal 
mine was closed and the state coal company, Charbonnages de 
France, is being wound down.  This is partly for economic 
reasons (coal is more expensive in France than alternative 
sources) and partly on environmental grounds so that France can 
cut its carbon emissions to meet Kyoto Protocol emission 
targets.  Coal accounts for only five percent of France's energy 
needs and GOF officials expect that this percentage will 
decrease further. 
 
EU Electricity Interconnection Increases Security 
 
¶12. (SBU) France supports a proposed EU directive on the 
security of electricity supply and investment in infrastructure. 
 France backs the approach of developing cross-border power 
lines between EU members to improve their ability to cope with 
the shut down of a power plant or key power lines.  In addition, 
France believes European countries should invest in 
power-generation capacity.  As an early step, the GOF advocates 
carrying out, at the EU level and in each Member State, a 
forward-looking supply and demand analysis to identify energy 
bottlenecks and imbalances in the medium term. 
 
Reduction of Energy Consumption Can Increase Energy Security 
 
¶13. (U) France has a goal of reducing greenhouse gas emissions 
by three percent a year to reach a fourfold reduction by 2050 
 
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and will use technical, technological, economic, and social 
means to accomplish this aim.  The Energy Policy Act (EPA) of 
July 2005 specified more near-term goals.  The EPA sets a goal 
of lowering final energy intensity by two percent per year by 
2015 and by 2.5 percent per year from 2015 to 2030.  France has 
planned a substantial increase in the public and private 
research effort in new energy technologies to help it reach 
these goals, specifically in bioenergy, fuel cells, clean cars, 
solar power, positive energy buildings, carbon capturing and 
sequestration, and generation four nuclear reactors.  The GOF 
created the National Research Agency and the "Agence de 
l'innovation industrielle," which has a budget of 2 billion 
euros from 2005-2007 (USD 2.6 billion), to help research these 
areas. 
 
¶14. (U) The GOF has also established two "competitiveness 
clusters" (or "poles de competitivite" in French) to encourage 
the development of renewable energy technologies.  These "poles" 
harness the research that the private sector is doing, combine 
it with the capacity offered by research and academic 
institutions, and offer government financing, to make innovative 
advances in specified fields. 
 
The State's Large Role in the Energy Sector 
 
¶15. (C) The state plays a prominent role in the energy sector 
and France has long been one of the EU's most resistant 
countries to liberalization and privatization.  Although it 
reduced its holdings in the two companies in 2006, the state 
retains majority states in both Electricite de France (EDF) and 
Gaz de France(GDF).  The GOF sponsored an energy law that 
permitted the GOF to decrease its stake to a third in GDF so 
that it could merge with private French energy group Suez, but 
the courts have delayed the merger until July 2007.  At that 
time, a new President and parliament could be hostile to the 
merger and the GOF decreasing its share in GDF.  While the 
European Commission wishes to decouple electricity production 
and distribution, press reports indicate that the GOF is 
pressuring it not to proceed with these plans. 
 
GOF's Plans to Reduce Vulnerability to Terrorist Attacks 
 
 
¶16. (C) While the GOF does not believe that terrorists are 
targeting their energy infrastructure, it takes seriously the 
possibility that they might do so and has developed plans to 
reduce its vulnerabilities.  As part of this plan, the GOF 
interacts regularly with its energy companies to assess and 
combat terrorist threats to oil and gas production and exports. 
For instance, the GOF requires each power plant to inform the 
GOF of its plan for a six month disruption.  The GOF also has 
strategic oil and gas reserves that exceed International Energy 
Agency (IEA) recommendations.  France also has a national plan 
for security with different colors representing the terrorist 
threat (similar to that devised at the Department of Homeland 
Security).  France was at "code red" in early December (the 
highest threat level), which required all energy installations 
to enhance security. 
 
¶17. (C) The GOF is identifying France's most vulnerable 
energy-related sites, such as refineries, import pipelines, and 
oil storage facilities, and determining how further to secure 
those facilities.  For example, all of the gas from Norway 
arrives in France in one pipeline and disruption would be 
significant if the pipeline were attacked.  The GOF is therefore 
insuring that gas storage infrastructure increases along with 
increasing consumption.  The GOF is confident that it could 
weather a disruption without difficulty.  The GOF also has a 
contingency plan in place in case of simultaneous attacks on 
several facilities, which involves reducing consumption and 
prioritizing users. 
 
¶18. (C) France does not have concerns about the security of 
transport of energy supplies, but it believes that diversity of 
supplies can diminish potential threats.  GOF officials believe 
that the transportation of energy is a very small percentage of 
global emissions and does not have concerns about 
environmentally sound transport.  However, it is making efforts 
to reduce sulfur in all of its maritime transportation. 
 
 
HOFFMAN