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Energy security moves to centre stage in global politics

01.01.70

World View/Paul Gillespie: Suddenly energy security has become a central issue in world politics. The international regime among the industrialised countries after the 1973 oil shock needs to be broadened to take account of new geopolitical and technological realities and climate change.
A glance at recent headlines confirms the trend and reveals the ubiquity of energy concerns. A Russia-China summit this week reached new agreements on gas supplies and nuclear plants. Vladimir Putin is making energy security the centrepiece of Russia's current chairmanship of the Group of Eight.
Oil supply issues ensure Iraq and Iran remain in the news and are a central aspect of US policy towards them. The same applies to Venezuela. India's opening to the world market is accompanied by a new emphasis on its energy needs. In time they will equal China's, which is reckoned to have accounted for one third of the growth in world demand for oil since 2000 (in 1993 it was self-sufficient).
Yesterday's EU summit was preoccupied with energy. It agreed with many of the ideas contained in an energy strategy paper from the commission. This suggested six priority areas for action: the development of fully competitive internal energy markets; security of supply; the EU's energy mix; climate change; research and technology in the energy sector; and external energy policy.
The commission sees the creation of a unified EU energy market as a central task in economic regeneration. But that objective has come up against recent Polish, Spanish and French moves to protect national champions from takeover by competing firms. It wants to see the EU maximise its global influence by moving towards a single negotiating stance on energy security. But that raises tricky issues of policy towards Russia.
One solution being canvassed, by the Germans, would create a European energy community by including Norway, Ukraine and Turkey and copper-fasten agreements with Russia. But Poland and the Latvian states would prefer a tougher approach to Moscow, mindful of how Ukraine's supplies were cut off in January during a pricing dispute.
Many EU member states agree in principle with the idea of extending its energy remit, but they did not agree to expand the commission's currently limited competence. National security and pride are at issue. There is some resistance to linking up many of the pipeline supplies involved, or accepting the idea that national energy stockpiles should be used to aid other states in an emergency.
Research and technology in the energy sector has huge potential for future growth, given the facts of climate change caused by burning fossil fuels. The point is made very effectively by Daniel Yergin in the current Foreign Affairs journal. Over the past 30 years US GDP has grown by 150 per cent, its energy consumption by only 25 per cent. Thus efficiency, conservation, alternatives and renewables have worked - although this has partly been achieved because the US economy is now "lighter" than before, being less dependent on heavy manufacturing.
There are huge opportunities to develop technologies and supplies of energy, which could be key factors in Europe's economic regeneration. This could have a worldwide impact, enabling China and India to jump over previous developmental mistakes.
China imposed a series of conservation taxes on SUVs and other vehicles this week, aware of what is at stake. Thus external pressure drives EU integration by showing up the contrast between economic potential and the most effective means to achieve it.
It is good to see climate change so explicitly included in the EU energy security portfolio. In his review of what needs to be changed in the 1973 energy security strategy, Yergin says the last thing anyone expected then was that its provisions for a co-ordinated emergency drawdown of emergency stockpiles would be used for only the second time in the United States - after Hurricane Katrina last September (the first was on the eve of the Gulf War in 1991).
Accepting the argument that hurricane intensity is related to ocean warming and taking account of this week's evidence that Greenland's meltdown is driving up sea levels, it is to be expected that energy security will rapidly climb up the world's political agenda. The existing system was created in response to the Arab oil embargo after the 1973 war. It was intended to ensure co-ordination among the industrialised countries if supply was disrupted, encourage collaboration on energy policies, avoid scrambles for supplies and deter any future use of oil as a weapon by exporters.
It set up the International Energy Agency, based in Paris; introduced strategic stockpiles of oil; monitoring and analysis of energy markets; energy conservation and co-ordinated emergency sharing of supply during emergencies.
The awesome task of broadening this regime can only be achieved by political means, notwithstanding the Bush administration's determination to apply US military force to it. Energy increasingly determines the shape of world politics. This can be seen in the growing strategic importance of the arc of conflict from the Middle East to central Asia. Russia's growing political confidence is predicated on energy supplies. And the impact of growth in China and Asia is such that, whereas in the 1970s the US and Canada consumed twice as much oil as Asia, last year Asia's oil consumption exceeded North America's.
This trend will continue, putting severe pressure on price and supplies, but also creating new incentives for innovation and technological breakthrough. Those most forward in these tasks have an opportunity to shape and benefit from the next world economic cycle.
If the ecological theorists are right, we have only a few decades to find the means to prevent irreversible climate change.
up the world's political agenda. The existing system was created in response to the Arab oil embargo after the 1973 war. It was intended to ensure co-ordination among the industrialised countries if supply was disrupted, encourage collaboration on energy policies, avoid scrambles for supplies and deter any future use of oil as a weapon by exporters.
It set up the International Energy Agency, based in Paris; introduced strategic stockpiles of oil; monitoring and analysis of energy markets; energy conservation and co-ordinated emergency sharing of supply during emergencies.
The awesome task of broadening this regime can only be achieved by political means, notwithstanding the Bush administration's determination to apply US military force to it. Energy increasingly determines the shape of world politics. This can be seen in the growing strategic importance of the arc of conflict from the Middle East to central Asia. Russia's growing political confidence is predicated on energy supplies. And the impact of growth in China and Asia is such that, whereas in the 1970s the US and Canada consumed twice as much oil as Asia, last year Asia's oil consumption exceeded North America's.
This trend will continue, putting severe pressure on price and supplies, but also creating new incentives for innovation and technological breakthrough. Those most forward in these tasks have an opportunity to shape and benefit from the next world economic cycle.
If the ecological theorists are right, we have only a few decades to find the means to prevent irreversible climate change.

Expert opinion

Halter Marek

02.12.06

Halter Marek
Le College de France
Olivier Giscard dEstaing

02.12.06

Olivier Giscard dEstaing
COPAM, France
Mika Ohbayashi

02.12.06

Mika Ohbayashi
Institute for Sustainable Energy Poliy
Bill Pace

02.12.06

Bill Pace
World Federalist Movement - Institute for Global Policy
Peter I. Hajnal

01.12.06

Peter I. Hajnal
Toronto University, G8 Research Group