Meeting of the Governing Board at Ministerial Level - Communiqué

(Paris) — 15 May 2001

We the Ministers met to discuss energy security and the place of energy in a sustainable future. Energy market developments and the IEAs World Energy Outlook to 2020 provided a backdrop for our deliberations.

The reference scenario of the IEAs World Energy Outlook 2000 (WEO) paints a challenging picture:

Continuation of past trends would mean a 60% increase in world energy demand by 2020 with much of the increase occurring in developing countries;

Oil, coal, gas and nuclear power will continue to dominate the energy mix, with sources of oil and gas concentrating in a few countries;

A large proportion of the worlds population continues to lack access to basic energy seices; and

Our collective efforts to curb greenhouse gas emissions will fall short of the targets set at Kyoto.

The World Energy Outlook suggests some paths to improvement through the diversification of energy sources in power generation, through emissions trading and through reform of transport systems. Through individual and collective actions, the outcome can be significantly better.

Our meeting has been held at a time of higher and volatile oil prices, continuing increases in global oil demand, localised supply problems for some forms of energy, concern about long term security of supply and increasing attention to the environmental impact from energy use. The experiences of the last two years have underscored that a secure supply of affordable energy is not a foregone conclusion.

We emphasize that energy remains an essential ingredient of human progress and prosperity. Economic development requires access to secure and affordable energy. For billions of the earths poorer people, access to affordable energy will accelerate the escape from poverty. Yet, while assuring growth, we cannot allow energy use to impose unacceptable burdens on any part of global society or on the natural environment.

We welcome the constructive and improved dialogue between producers and consumers as manifested in the Seventh International Energy Forum held in Riyadh last November and we expect this dialogue will be further enhanced in the next forum to be held in Japan in 2002. We also welcome the expanding energy dialogue, particularly with China, India and Russia, as well as recent initiatives linking the IEA, key non-Member countries and other international organisations.

We welcome other positive developments. Many countries have made significant progress on energy-related policies and actions through commitment to market and regulatory reform. This has contributed to reduced costs and greater efficiency in energy use and has also helped create new opportunities for innovative energy solutions.

In all of our countries, technological developments are improving prospects for greater energy efficiency, broader commercial application of cleaner fuel technologies, renewable energy and combined heat and power generation. We encourage Secretariat efforts to accelerate these improvements world-wide.

In light of these considerations and circumstances, we affirm the importance of the guiding principles of the IEA "Shared Goals" -- energy security, environmental protection and economic growth. These remain essential to sustainable development. New and flexible responses are required if these goals are to be reached. As part of this, we also need to take action to modify longer-term trends in greenhouse gas emissions within the framework of the United Nations Framework Convention on Climate Change.

We commit ourselves, in our own countries and within the framework of the IEA, to strengthen energy security across the full range of primary energies; to continue energy market and regulatory reform; to expand access to energy services; to improve energy efficiency; to support the development and transfer of energy technologies; and to foster a sustainable energy future. We welcome the renewed emphasis on energy in several Member countries and in the European Union, including efforts to expand domestic energy supplies and curb energy demand as appropriate.

We recognise the need for less volatility in oil prices in the interest of global economic growth. We note that rapidly expanding gas demand is being met by ever more distant supplies, often crossing multiple territorial borders. We hold the view that while the framework for energy markets will be shaped by government policies, under normal circumstances markets work best when allowed to operate freely.

With the world oil market characterized by continuing volatility, IEA Members stand ready to respond quickly should supply problems occur. However, we note with concern that the level of assurance relative to global oil security needs is declining. As the balance of demand shifts away from OECD economies, all countries should develop appropriate mechanisms for effective response to supply disruptions. We reaffirm the importance of building and holding adequate stocks.

We call for early action to create greater transparency in world energy markets, especially the oil market.

We support the Secretariats initiative to improve the quality, availability and reliability of data supplied by nations and by international organisations, and we welcome the support for this goal expressed at the Riyadh Forum.

We support the continuing diversification of our energy systems - both by energy type and by source. National circumstances and policies will determine the mix of fuels necessary to contribute to our collective energy security, to our economic growth, and to address the challenge of achieving sustainable development.

We recognize that each country will choose that mix of fuels it considers most appropriate: oil, gas, coal, nuclear or renewables. We intend that renewable energy should play an increasing role and accept the European Unions invitation to collaborate in a concerted effort to give new impetus to both the diversity and the efficiency of all forms of energy.

While our most pressing global environmental challenge is climate change, localised and regional problems associated with the production and use of fuels are also important. New technology developments as well as new policy instruments, such as emissions trading, joint implementation, and clean development mechanisms, can promote a cleaner environment, while simultaneously increasing energy efficiency and enhancing security. We commit ourselves to develop and use the most effective possible means to achieve sustainable development, as expressed in the IEA statement on sustainable development.

We recognise that energy technology research, development and demonstration (RD&D) are essential to achieving energy security, environmental protection and economic growth. We accept the need for a government role in supporting long-term RD&D and encouraging the participation of industry. The IEA provides a unique forum and structure for collaboration to promote the availability of advanced technologies and reduce their cost.

We warmly welcome the advance of regulatory reform world-wide, which promises to deliver long term benefits. We acknowledge, however, that market reform can imply a difficult period of transition before the full benefits are realised. Effective action in relation to energy involves many sectors and the responsibilities of many Ministers. We will work closely with our Ministerial colleagues in a continued effort to advance our common objectives.

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