The International Conference on Energy Security started in Moscow

Dear colleagues,

Welcome to the Conference on Energy Security.

In a way, we have disrupted a traditional schedule of international events and conferences. And this is no coincidence.

As you know, the creation of a safe and comprehensive system of energy security is a priority issue on the G-8 agenda. Immediately after this Conference, the G8 Energy Ministerial Meeting will take place.

Globalization processes in political, economic and other spheres of life in the world also manifest themselves in the energy sector. The expansion and deepening of inter-state ties, growing sales and expanding geography in energy trade and a number of other factors taken together form the world energy system.

Building a global energy system which would allow to continuously supply energy to the people of the entire world at the economically justified prices, maintaining long-term stability in the world and regional energy markets and ensuring environmental security is a priority task for the world community with a view to implementing the concept of sustainable development of individual countries, as well as mankind as a whole.

Being aware of the current tendencies of the aggravation of traditional risks and the emergence of new challenges to the global energy security in the short, as well as long term, the countries should closely cooperate in order to remove these threats. Otherwise, it is not possible to secure economic growth, sustainable development and better quality of life for humankind at large.  

Global energy security may be defined as a stable system of legal, political and primarily economic relations allowing to maintain efficient functioning of the world energy system, removing and making up for negative effects of various destabilizing factors in order to ensure secure demand and steady supply of energy, robust and streamlined operation of regional and world energy markets in full compliance with the mandatory requirements of technological and environmental safety.

Discussion of the global energy security problems should be focused on the following aspects:

- expansion of the energy system scope, globalization of the energy markets;

- a threat of imbalance between a growing demand and supply of energy, with  oil fuel in the first place;

- a high level and volatility of world oil prices, the end of the cheap oil and gas era;

-disproportions in the world energy infrastructure caused by the concentration of hydrocarbon resources in remote areas, located far away from the major consumption centres. 90 % of the world GDP is produced in the energy importing countries;

- risks of natural and man-made disasters and system failures, including those caused by terrorist acts and subversion;

- negative environmental impact of the fuel and energy sector;

- large scale energy poverty amounting to lack of access to the utilities for 2 billion people on the acceptable commercial and technical  terms.

From an economic standpoint, addressing the above issues is linked primarily with the need to increase investments. According to IEA, the development of the world energy system will require $ 17 trillion of investments in the period up to 2030 in order to achieve an acceptable level of energy security. And two thirds of the investments will be accounted for by the production and refining sectors.

With this in view, an active support by the international financial institutions will facilitate a more intensive, including private, investment flow into financing the energy projects. And special consideration should be given to enhancing economic and financial viability of the projects through the mechanisms and schemes of insuring and sharing financial risks.

In compliance with the spirit and letter of the final communiqués of the G8 summits in Gleneagles and in Evian, further steps have been taken for sustainable energy development in the following areas:

- enhanced predictability of the oil markets through improved awareness of oil reserves, production output, trade etc which may allow the oil market players to adequately assess the setup in the sector, thus decreasing the risks of shortages of oil supply in the future. In this context, support should be given to a number of international initiatives aimed at higher transparency of the hydrocarbon reserves data;

-replacement of the oil and gas resources by expanding exploration, discovery of new deposits and transferring the potential oil and gas resources into the category of proved recoverable reserves;

- facilitation of the access for the international corporations and national companies to oil and gas resources in third countries, subject to the condition of strict observance of the effective legal regulations of the access to the subsoil existing in the country owning the resources and non-infringement of their natural interests in controlling their strategic reserves;

- diversification of energy supplies by the sources of energy, routes and delivery methods, as well as best combination of centralized and decentralized energy systems;

- universal implementation of the principles of energy efficiency and energy conservation as the most economical measure of containing the pace of growing energy demand and compliance with environmental  requirements.

Our joint actions should also focus on the problem of providing a safe and economically affordable access for the developing countries to the basic energy services which are indispensable for taking their citizens out of poverty. The solution of the problem may be facilitated by the development and implementation of new, efficient and accessible energy technologies, including those based on the renewable sources of energy which, in addition, comply with tough environmental standards, as well as by concurrent improvement of energy efficiency and environmental friendliness of the present generation technologies. The implementation of these plans may help all countries to meet the energy needs of the population and to achieve economic growth.

It is imperative to study the feasibility of such an international instrument for overcoming “energy poverty” as a Fund of Technology Transfer in the area of Energy Efficiency, Energy Saving, Renewable Energy and Environmentally Clean Energy Uses. According to numerous experts, such a Fund would be instrumental in implementation of energy efficient technologies along the whole chain of economic cycle in the undersupplied less-developed countries.

We should seek to support, in every way possible, the development of global energy trade and higher volumes of shipments from the regions rich in energy resources; and the notion of “energy carriers” should imply not only the primary types of natural energy materials, but also the refined types of energy products.

It is necessary to stress the important role of the further development of market relations in the energy sector and its stabilization. However, it must be emphasized that the market reforms are not an end in itself, but an instrument of higher efficiency and reliability of the world energy system. And an inalienable part of the process is the regulating role of the state which reveals itself in the creation and continuous improvement of the legal framework for the market operation, its monitoring, eliminating market distortions, long-term energy planning, fulfillment of the environmental commitments and approving a whole set of modern measures aimed at removing the threats to energy security.

In this connection I should like to note importance of developing a constructive dialogue between energy producers and consumers with a focus on exchanges of relevant information and experience, on developing bilateral and multilateral energy cooperation, and strengthening of institutional framework. This dialogue should be pursued with the involvement of multilateral institutional mechanisms, such as specialized UN agencies, the International Energy Agency, IEF etc.

We are ready to provide an all-round assistance to the creation and work of the international associations and partnerships which specialize in developing and implementing efficient and environmentally friendly technologies and methods of production and consumption of fuel and energy resources, including the alternative energy sources and low-carbon technologies, in the context of and in accordance with the G8 action plans elaborated in the course of the summits in Gleneagles and Evian.  

We believe that the G8 countries should, using their influence in the international organizations and financial institutions, as well as the measures of legislative and fiscal nature, counteract the penetration into the markets of such products which fall short of the environmental and energy efficiency criteria, creating, in parallel, motivation for market promotion of the equipment and machinery best complying with them.

In the first quarter of the XXI century, mankind is destined to make a scientific and technological breakthrough on the way to a more comprehensive and efficient development of “clean” non-traditional and renewable sources of energy, as well as large-scale and rational use of hydraulic and nuclear power.

We call upon the scientific and business communities to unite their R&D efforts which are necessary for developing new technologies, raising the level of confidence to them and broadening the opportunities for selecting the appropriate technologies. As to the public authorities, I would like to call them to join efforts in order to effectively remove unnecessary legal, customs, and other barriers preventing wider geographical dissemination and implementation of state-of-the-art- energy efficient and "clean" technologies and equipment, thus enhancing their economic competitiveness.

Challenges and risks of the global energy security force countries to formulate their national energy strategies and implement their respective national energy policies resulting therefrom. Still these strategies and policies differ, sometimes very substantially. It is objectively related both to the level of economic development of different countries and the self-positioning of individual countries as supplier, consumer or, say, a transit country. These strategies and policies are based on national assessment of possibilities and risks and subsequently determine the action system.

I would like to stress that that discrepancies, lack of coordination, contradictions, uncertainties, non-transparency of national energy strategies create serious global risks for energy security.

In this regard it is important to enhance the transparency of the energy strategies and policies, and in turn, to raise the confidence level. For this reason we pay special attention to the energy dialogues as a kind of interface between national energy strategies and policies that we have with the EU, USA, German, Italy, Central Asian countries and others.

Our task is to create efficient mechanisms of the global energy system which would allow to overcome the major threats and challenges of our time and to build a sustainable system eliminating the very possibility of devastating conflicts for the energy sources, supply and transit and, at the same time, giving way to secure a long-term dynamic development of our civilization.

The forthcoming conference and the following G8Energy Ministerial Meeting are aimed at achieving those goals.

So, the presentations and discussions at the Conference will build up a good foundation for the ministerial discussion.

Thus, stressing my personal interest, I would like to wish all success to the participants of this Conference.