Leaked plan: G8 Seeks to Promote "Trillions" of Dollars of Investment in Fossil Fuels and Nuclear Energy
In a dramatic turn-around from last year's meeting in Gleneagles, Scotland, G8 leaders have set their sights on expanding access to fossil fuels and nuclear energy. Last year, G8 leaders focused on mitigating the impacts of climate change and canceling debt. This year the G8 will focus on promoting trillions of dollars of investment in fossil fuels which will exacerbate both climate change and developing country debt.
Energy Security is one of three core themes scheduled for discussion at the upcoming Saint-Petersburg Summit and it will presumably be the core issue on the table when G8 Energy Ministers meet on March 15th and 16th in Moscow. Rather than use the G8 process as a means to overcome the world's addiction to oil and other fossil fuels, a G8 draft Plan of Action on Global Energy Security reveals that the Saint-Petersburg Summit is shaping up as an opportunity to ensure that the addiction will be well fed in the decades to come.
Expanding access to oil and gas:
The G8 draft Plan of Action argues that 17 trillion US dollars of investment will be needed over the next 25 years in order to create a “shock-proof system of global energy supply” and it outlines the G8's intention to work together to “create the environment for the effective mobilization of these huge sums.” The G8 is calling for a global effort to reshape regulatory regimes and remove “unjustified administrative barriers”. According to the draft Plan of Action, these legal and regulatory changes will help create the conditions for the private sector to: · find new reserves of oil and gas at a faster rate than the existing reserves are depleted; · increase oil and gas output by, among other things, more drilling on the continental shelf; · expand production capacity in oil-refining, petrochemical and gas processing industries; · develop new electric power facilities, with an emphasis on nuclear and hydro-power plants; and · introduce “clean coal” technology.
Any intention of significantly reducing the world's use of fossil fuels seems to be swept aside. The draft Plan of Action states that: “The proven hydrocarbon reserves and the existing investment potential are sufficient to meet, for a foreseeable future, the growing world demand for energy. We need to create jointly the proper environment to realize this potential.”
Energy Efficiency and the Environment:
The draft Plan of Action emphasizes the following priorities among a range of “measures to ensure a more efficient and ecologically responsible energy production and use”: · increasing the output of hydrocarbon deposits; · raising the level of processing of hydrocarbon resources; · widespread introduction of carbon sequestration technologies in energy production; · wider introduction of “clean coal” technologies; · large-scale utilization of associated gas; · use of coal-bed methane; and · expanding the market for synthetic fuels, particularly those produced from coal and natural gas.
Expanding Nuclear Energy:
The message on nuclear energy is clear: “We believe that the development of nuclear energy would promote the global energy security...” and “we intend to make additional joint efforts to ensure non-discriminatory access to this energy source.”
Developing an Institutional Framework for a New Global Energy Architecture:
The G8 wants to pursue the above-mentioned objectives by working “within the framework of existing relevant institutions and mechanisms.” According to the draft Plan of Action, they intend to call on the World Bank, export credit agencies and the regional development banks to “use more effectively their potential for financing energy projects, especially in developing countries.” They want the international financial institutions (IFIs) to pay “special attention” to improving the “economic and financial viability of projects” by using “mechanisms and schemes of insurance and sharing of financial risk.” They will presumably also be expecting the IFIs to join them in working “actively with the developing countries with a view of improving conditions for private investment...”
The draft Plan of Action also focuses on the need for more dialog between energy producers and consumers in order to ensure a secure and uninterrupted supply of oil and gas. This includes working “in closer contact with OPEC” and other international bodies such as the Saudi-inspired International Energy Forum (IEF). Looking ahead to 2007, the draft Plan of Action states: “We have instructed our experts to examine the feasibility of and formulate recommendations for the next G8 Summit in Germany with regards to establishing the practice of holding regular annual meetings of G8 energy ministers along with senior officials of the IEA, IEF and OPEC...”
Is There Any Good News?
The G8 reaffirms its commitment to the Gleneagles Plan of Action on renewable energy and makes a range of references to the importance of energy efficiency and “eradicating energy poverty”. Unfortunately, these laudable goals are couched within an unmistakable focus on expanding fossil fuel and nuclear energy production and using public institutions to support the work of international oil companies who are currently reporting record profits.
Debt and Oil:
By emphasizing the need to increase oil production rather than helping countries diversify away from their dependence on oil, the G8 is contradicting both its rhetoric on climate change and debt cancellation. At the G8 in 2005, Oil Change International, and the Jubilee USA Network, co-published Drilling into Debt - the first study to rigorously examine the relationship in between oil and debt. The report confirmed the dire impact that rising oil prices have had and continue to have on oil importers globally, while also for the first time revealing that countries that produce oil also have unusually high debt burdens.
The world's leading industrialized countries don't seem to be able to decide whether or not to use the G8 as a vehicle for overcoming their addiction to oil or as a means of feeding that addiction. They acknowledge the potential for “devastating conflicts driven by eventually disruptive competition for energy sources”, but their draft Plan of Action seems to suggest that the answer to the world's dangerous dependence on fossil fuels is more fossil fuels. Rather than charting a bold vision for a clean energy future, G8 governments are debating a “global energy architecture” that would drive us further down the destructive road that we find ourselves on today. Hopefully there is still time to turn the Summit around.
To view a copy of the draft G8 Plan of Action see: www.priceofoil.org
For more information contact Graham Saul:
graham (at) priceofoil (dot) org.