By Niu Li
Energy ministers from China, the United States, India, Japan and
the Republic of Korea (ROK), five of the world's primary gasoline
consumers, got together in Beijing on December 16 to discuss energy
security and sustainable development of the energy sector.
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The energy ministers agreed that the guarantee of a reliable and
sufficient supply of reasonably priced energy resources and
increased energy efficiency are what their countries are after.
The meeting was not aimed at keeping down international oil
prices and will not develop into a mechanism to counterbalance the
Organization of Petroleum Exporting Countries (OPEC), despite media
suggestions to the contrary.
In recent years, international oil prices have fluctuated by
large margins. This not only greatly impacts the world economy but
leaves oil consuming countries continuously worried about energy
security, with developing countries the hardest hit.
On July 17, 2006, President Hu Jintao, attending the dialogue
session between G8 and developing countries in St. Petersburg,
Russia, suggested that a new energy-security approach be
introduced. It would be based on global energy stability,
sustainable development and mutual benefit.
Against this background the Chinese government proposed
convening the energy ministers' conference.
The population of China, India, Japan, the ROK and the United
States totals some 2.85 billion and the five countries consume 45.3
percent of the world's oil. So the five share major common concerns
over energy.
The ministerial meeting concentrated on five subjects: energy
security and strategic oil reserves, diversification of energy
structure and alternative energy forms, investment and the energy
market, primary challenges to international energy cooperation,
energy saving and enhancement of energy efficiency.
Ma Kai, minister of the State Development and Reform Commission,
put forward six proposals involving cooperation in energy saving,
alternative energy resources, oil reserves, energy information
exchange, research on advanced technologies and boosting energy
supply.
The joint statement issued by the conference urges that an
energy resources market be introduced, based on transparency,
efficiency and fair competition.
This market, with an effective legal and supervisory framework,
would encourage investment in oil and gas prospecting and
exploration.
The statement also pushes for the diversification of energy
supply sources and the development of effective energy-saving
technologies.
In addition, it presses for increased strategic oil reserves to
cope with possible energy crises.
The joint statement also suggests that major energy facilities
and oil-shipment sea routes be protected.
The five-country energy ministers' meeting sends a signal to the
international community that some of the world's primary oil
consuming countries will strengthen dialogue and cooperation among
themselves to promote energy saving, energy efficiency and the
development of alternative energy resources to lessen consumers'
excessive dependence on gasoline.
The fact that the five oil consumers got together is in itself
an important event.
In 2005, the five countries consumed a total of 1.737 billion
tons of oil, 45.3 percent of the world's total. Looking ahead, as
the Chinese and Indian economies develop on the fast track, their
consumption of oil will increase dramatically.
In this scenario, it is feasible that the major oil consumers
strengthen cooperation to avoid cutthroat competition among them.
This helps stabilize the world oil market and encourages its
orderly development.
In addition, the sharp oil price hikes in the international
market have already brought negative impacts on the world economy,
which hits developing countries the hardest.
The energy ministers' meeting is of great significance in
promoting global energy security.
Some media reported that the five countries would work together
to keep international oil prices down.
This seems an impossible task.
A host of ever-changing factors influence international oil
prices. Even organizations such as the International Energy Agency
and OPEC can only play a limited role in oil pricing.
Energy cooperation among the five countries is geared to seeking
common interests. Long-term strategic cooperation in the energy
sector constitutes a top priority.
Some media reports alleged that the convening of the
five-country energy ministers' meeting marked the establishment of
the oil consuming countries' group. The reports go so far as to
regard the energy ministers' conference as a mechanism
counterbalancing OPEC.
The allegation seems unfounded.
Each of the five oil-consuming countries maintains good
relations with OPEC and multiple channels of dialogue and
cooperation have been introduced between the oil consumers and
suppliers, which facilitates multilateral energy cooperation and is
conducive to maintaining global energy security.
The author is an economist with the State Information
Center.
(China Daily February 1, 2007)
