G-8 Ministers Underline Need for Secure Energy Supplies

Support efforts to reduce oil price volatility

Energy ministers from Group of Eight (G-8) countries met in Detroit, Michigan, May 2-3 and agreed to support continuing efforts to reduce oil price volatility through greater reliance on market forces, diversification of energy supplies, more efficient energy use and better communications, according to the meeting's co-chairs, U.S. Energy Secretary Spencer Abraham and Canadian Minister of Natural Resources Herb Dhaliwal

The G-8 officials agreed that "access to secure, economical, and reliable supplies of energy is a lynchpin of progress," Abraham and Dhaliwal said in a statement following the two-day meeting.

The G-8 includes the industrialized countries of the United States, Canada, Britain, Germany, France, Italy and Japan, plus Russia.

The ministers urged oil-importing countries to maintain emergency oil stocks and to coordinate their use during significant disruptions.

"We recognize the value to all of us when other countries, including those in Asia whose energy demand is projected to increase sharply, build similar stocks to improve their resilience in the face of oil supply disruptions," the officials said.

They also said that "significant investments" would be needed to meet growing demand for energy in an environmentally sound way.

"Ultimately, success in enhancing energy efficiency and improving access by the public to clean energy technologies depends critically on private investment facilitated by sound policies," the officials said.

The Detroit meeting on energy was one of several ministerial gatherings leading up to the G-8 leaders' summit in Kananaskis, Alberta in June.

Following is the text of the co-chairs' statement:

G-8 Energy Ministerial: Statement From The Co-Chairs

1. The G-8 Energy ministers met in Detroit, Michigan on May 3, 2002, to discuss issues of common interest.

2. We discussed the key role that energy plays in our economies, and how vital it is to economic and social development around the world. Access to secure, economical, and reliable supplies of energy is a lynchpin of progress.

3. We believe energy security and flexible emergency response are critically important in today's world and agreed to continue close cooperation in enhancing them. We support continued efforts to reduce oil price volatility and enhance energy security through increased reliance on market forces, diversification of energy supplies, increased efficiency of energy use, improved data, and better communications. We believe that a regular open dialogue among energy producers and consumers can strengthen energy security. We support efforts to improve the availability, quality, compatibility and sharing of energy market data. This issue will be addressed at the Eighth International Energy Forum in Osaka.

4. We reaffirmed the necessity of being prepared to respond to oil disruptions. We agreed on the importance for net oil importing countries of maintaining emergency oil stocks and of commitments to coordinate their use during significant disruptions. We recognize the value to all of us when other countries, including those in Asia whose energy demand is projected to increase sharply, build similar stocks to improve their resilience in the face of oil supply disruptions. We will share our experiences with others on effective means of doing so. We agreed on the importance of physical protection of energy facilities, as well as the value of flexible oil, gas, and electricity transport networks with multiple links between energy suppliers and consumers, to reduce the vulnerability to disruption of these critical resources.

5. We discussed how energy security, economic growth, environmental protection and, therefore, sustainable development are supported by improved energy efficiency, and diversification of energy sources and fuels. Countries can improve their ability to respond to changing energy supply conditions through increased energy efficiency and a mix of energy sources and types-oil, gas, coal, nuclear and renewables-chosen by each country as most appropriate. Most G-8 members stress the value of nuclear energy in this context, providing optimal safety and waste handling are ensured. These actions also can help countries address climate change by reducing the greenhouse gas intensity of energy production and use. We reaffirm the importance of renewable energy for diversification of energy supplies, as recognized at the Genoa G-8 Economic Summit. We also recognize that competitive markets and liberalized trade in energy and energy services can help us meet energy security and environmental objectives in a cost-effective fashion.

6. We believe that continued research, development, demonstration and deployment of a broad array of energy technology options will play an essential role in diversifying the energy mix and reducing the environmental impacts of energy production and use, thereby making a vital contribution to sustainable development. We will explore areas where existing cooperation among our countries in energy science and technology might be strengthened, particularly in the areas of emerging renewable energy, energy efficiency and cleaner energy technologies. We also will review ways in which technical information is exchanged and disseminated both among G-8 members and between developed and developing countries, with a view toward improving that exchange in order to accelerate the contribution of technology.

7. It is important that clean, reliable, and affordable energy be available for all. We are committed to providing constructive and substantial input on energy to the World Summit on Sustainable Development and other similar fora. We will continue to encourage the development and introduction of clean energy technologies, including renewable energy, as well as improvement of energy efficiency.

8. Significant investments will be needed in energy development, production and infrastructure, as well as in improved energy efficiency, to meet growth in demand for energy services in an environmentally sound way. To meet growing energy needs, countries must foster a favorable investment climate by ensuring open markets with transparent business practices and stable regulatory frameworks. We encourage giving due consideration to energy in the formulation of development assistance programs. Ultimately, success in enhancing energy efficiency and improving access by the public to clean energy technologies depends critically on private investment facilitated by sound policies. We therefore affirm the importance of working with developing countries to share experiences with respect to legal, policy and regulatory practices that can facilitate investment and access to energy.

9. We asked our energy officials to follow up on some of the issues we have discussed, including in the areas of energy technology and cooperation with developing countries. We believe that more regular contact among our energy officials would help us to continue to make progress on our common goals.