Monday, March 13, 2006

Energy systems expansion and security.

The international energy cooperation and security conference opened in Russia on the 13th.Victor Khristenko the conference chairman and Russian minister of energy outlined the template for the conference and areas of discussion for the G8 leaders conference later in the year.

"Globalization processes under way in the political, economic and other spheres of international life have a powerful effect on the energy sector. Taken together, the extension and growth of international ties, the growing volume and expanding geography of trade in energy resources, and several other factors are molding the global power industry.

The creation of a global energy system, where energy is provided in an uninterrupted mode to broad sections of population around the world at economically substantiated prices, lasting stability is maintained on the global and regional energy markets and environmental security is ensured, is a priority task of the international community's efforts to implement the concept of sustainable development of individual countries and humankind as a whole.

When discussing issues of global energy security, we should focus on the following aspects:

- a growing scale of the energy system and the globalization of energy markets;

- a threat of imbalance between the growing energy demand and offer

- a broad scope of energy poverty: 2 billion of the planet's population cannot get energy services on affordable commercial and technical conditions.


Economically, solutions are mostly about larger investment. The International Energy Agency projected a required global investment of $17 trillion until 2030 to develop the world energy system to an admissible level of energy security, two thirds of this investment to go into production and refining.

In this context, proactive support from international financial institutions would help attract more investment, including from the private sector, to finance energy projects, with a special focus on their economic and financial viability achieved through financial risks' insurance and sharing. In line with the letter and spirit of G8 Gleneagles and Evian statements, the further steps on sustainable energy development include:

- diversification of energy supplies by sources, forms, and routes of delivery; an effort to find a balance between centralized and decentralized energy systems;

- drive toward more predictable oil markets through clearer information on oil reserves, production, trade etc. to help market players adequately assess the situation to alleviate risks of future oil shortages. To achieve this, international initiatives designed to increase hydrocarbons data transparency should be endorsed;

It is necessary to point out the important role of further development of market relations in the energy sector and its stabilization. At the same time, market reforms are not an end in itself, but a mechanism to increase the efficiency and reliability of the global energy sector. The inalienable part of this process is the regulating function of the state, which is seen in creation and constant improvement of the legal framework for the market's functioning, its monitoring, elimination of market distortions, long-term energy planning, honoring of environmental commitments and a set of timely measures to eliminate threats to energy security.

In this connection, I would like to point out the importance of developing a constructive dialog between energy producers and consumers, seeking to exchange relevant information and experience, to promote bilateral and multilateral cooperation in the energy sphere and to reinforce its institutional basis. This dialog should develop involving such multilateral institutional mechanisms as UN profile organizations, the International Energy Agency, the World Economic Forum, etc.

In the first quarter of the 21st century, mankind has to make a scientific and technological breakthrough towards pure" non-traditional and renewable energy sources, as well as towards greater and more rational use of nuclear and hydropower.

We urge science and business to unite their efforts to launch research and development necessary to create new technologies, to improve confidence in them and expand the opportunities for selecting adequate technologies. We call on state officials to take joint efforts to eliminated groundless legal, customs and other barriers that stand in the way of spreading and introducing state-of-the-art, energy efficient and environmentally safe technology and equipment, as well as to help to increase their economic competitiveness.
The threats and challenges to global energy security force countries to work out their national energy strategies and pursue relevant national energy policies. These policies and strategies differ from each other, sometimes significantly. They depend on the individual country's level of economic development and positioning on the global energy market as a supplier, consumer or, a transit country. These strategies and policies are based on own national assessments of a country's possibilities and risks and are used to define its plan of action.
I would like to say that discrepancies, lack of coordination, controversies, uncertainty and non-transparency of national energy strategies and policies generate serious global risks of energy security.


Here we are facing real constraints in the energy sector with oligarchial controls of the energy sector extracting price rises in excess of 50-60% in the last 2 years,The flow on effect is a downsizing of the engineering and manufacturing comple in NZ.

Regulatory constraints on evolution of the energy complex ,and subterranean soothsayers preclude best fit solutions.In addition the Minster of finance wishs to enhance the oligarchial windfalls of the last 2 years by the state monopolies.

Tony Blair will confirm the agenda and outcomes from the G8 energy ministers meeting when he visits next week.It will be with interest if our politicans will listen and interpretate the signals and promote some innovative solutions or if their own percieved importance (of whose ,the rest of the world cares not) will sideline the message .




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