G-8 agrees on broad oil policy

Posted in Other | 17-Jul-06 | Author: Andrew E. Kramer| Source: International Herald Tribune

Leaders of the G8 are joined by other invited leaders around the table, during a meeting at the G8 summit in St. Petersburg July 17, 2006.
STRELNA, Russia World leaders gathered at the Group of 8 summit meeting here adopted a resolution on energy policy Sunday that touched lightly on alternatives to fossil fuels, such as biomass and wind, but focused mostly on how to bring more oil to the market, and at cheaper prices.

The leaders - from the United States, Russia, Japan, Germany, France, England, Italy and Canada - also signed statements on corruption, trade, protection for copyrights and patents, and a cautiously worded resolution on the fighting between Israel and its foes: Hezbollah in Lebanon and the Palestinians. The energy resolution noted "high and volatile" prices, with oil rising above $75 a barrel last week, driven partly by the Middle East fighting, and laid out a broadly worded plan to stabilize prices and supply.

The countries waded into a debate over growing government control of energy industries in countries from Russia to Venezuela and the simultaneous need to attract huge investments, likely to come from private banks or equity markets, to meet growing demand.

The resolution noted that demand for oil, natural gas and coal would rise to one and a half times above current levels by 2030, and that these fossil fuels would constitute 80 percent of the world's energy supply in that year.

The statement called for "investment in all stages of energy supply," and "transparency and good governance in the energy sector."

That language, a Russian government official, Dmitri Peskov, conceded, seemed directed against Russia's consolidation of its oil and natural gas industry under state control. Still, all countries, including Russia, agreed to the statement.

"We will create and maintain the conditions to attract these funds into the energy sector through competitive, open, equitable and transparent markets," the Group of 8 leaders pledged.

Progress on the energy issue followed the failure the day before of talks on admitting Russia to the World Trade Organization (Page 9). President George W. Bush and President Vladimir Putin of Russia announced Saturday that they had failed to come to an agreement on Russia's accession to the organization and aides said the deal, which had been expected soon, was not likely for months. Putin wants membership as a symbol of the new position of Russia, flush with oil money, in the global economy.

Negotiations between Russian and American trade representatives went into the early morning hours of Saturday but could not break through impasses over financial services, food imports and, to a lesser extent, intellectual property rights. "We're tough negotiators," Bush said, adding that the United States wanted to ensure a deal is reached that Congress would approve.

The statement issued on Sunday also said Group of 8 countries "support the principles" of the Energy Charter, a treaty intended to integrate the oil and natural gas industries in former Soviet countries with Europe. Russia has signed but not ratified the document, and the wording left unanswered the questions of access to Russian pipelines by independent companies or third countries.

Russia, host of the Group of 8 for the first time, chose energy security as a focus of the meeting in this St. Petersburg suburb, a nod to its oil-fueled economic comeback eight years after an economic crisis in 1998. When Russia briefly embargoed natural gas supplies to Ukraine in January, however, European leaders and the International Energy Agency, in Paris, questioned the security of Russia's own supplies.

Few concrete measures to control prices emerged from Sunday's talks, reflecting divergent interests of the countries here.

To dampen gyrating world oil prices, the G-8 countries agreed to push oil producing countries to be more open with data on reserves, or how much oil remains in the ground, an issue put on the agenda by Russia.

The group endorsed efforts by the International Energy Agency to prepare for a possible world oil shock with plans to coordinate the release of countries' emergency reserves, such as the United States petroleum reserve.

On the environment, the statement endorsed the Kyoto Protocol as a tool to discourage energy waste and greenhouse gas emissions, but only for "those of us who have ratified" the document, an acknowledgment that the United States has withdrawn from the protocol.

"It is important to engage the private sector and other stakeholders in achieving these ends," the statement said, reflecting the Bush administration's preferred approach to climate change.

Countries producing oil and other fossil fuels should open their energy industries to outside investment, crack down on corruption and prevent waste such as burning natural gas at oil fields, a practice called flaring and widespread in Siberia, leaders of the Group of 8 countries said.

The leaders also adopted separate statements condemning piracy of intellectual property and counterfeiting brand-name products, in this area suggesting that member countries each set up a Web site with information for patent and trademark holders on legal methods to defend their rights.

They issued a statement supporting the Doha round of trade talks, a largely stalled attempt by developing countries to level the playing field with rich nations on trade by opening markets in agricultural goods.

On corruption, the G-8 statement was a follow-up to an program launched by Prime Minister Tony Blair of Britain to encourage oil and mining companies to publicly reveal their royalty payments to Third World governments, to ensure that the money is showing up in those countries' budgets.

Protesters defy restrictions

Demonstrators defied a ban against unsanctioned protests during the G-8 meeting, staging at least three small rallies Sunday that the police quickly quashed, The Associated Press reported.

About 50 protesters tried to block traffic on central St. Petersburg's main thoroughfare, jumping into traffic and unfurling banners before the police shut down the protest less than two minutes later.