Watching Both Sides of the Fence

Robert Priddle, Executive Director of the International Energy Agency, and Alvaro Silva-Calderon, Secretary General of OPEC, today gave the first-ever joint press conference of the two organisations, following their appearance together at the World Petroleum Congress, Rio de Janeiro, Brazil. Commenting, Mr. Priddle said "The IEA is proud of its reputation as the energy watch-dog of the industrialised world, and will maintain it. We speak for oil consumers everywhere; but we also have major oil producers as our members. A good watch-dog can see both sides of the fence." Mr. Priddle said that the IEA and OPEC share many views about the future of world energy. In the foreseeable future, the world will rely predominantly on fossil fuels, while continuing to seek sustainable, economic, long-term alternatives. OPECs share of world oil supply will grow.

Security of demand for producers depends critically on sustaining buyer confidence, which means maintaining security of supply. Facing up to global environmental expectations, both the IEA and OPEC are keenly interested in the technology for capturing carbon during fossil fuel use (carbon sequestration) and its safe disposal deep onshore or offshore. Both the IEA and OPEC welcome the prominence given to energy at the World Summit on Sustainable Development (which they both attended), a secure and affordable commercial supply of energy being indispensable to tackling global poverty. Energy helps to supply the basic essentials of life, such as pumped water, and is fundamental to launching small-scale, productive economic activity. "Renewable energy has an important part to play in relieving energy poverty" said Mr. Priddle, "particularly in rural communities." "All IEA member countries intervene in the market in support of renewable energy. But developing countries must be free to select their own priorities, and 95% of the expected increase in population in developing countries will be urban.

Urban electricity demands different technical solutions, based on large-scale, centralised power generation." Communication between OPEC and the IEA is today open and frank. The two organisations are co-operating, with others, on the Joint Oil Data Exercise, designed to bring greater transparency to oil markets by improving the quality of published data on oil demand, supply and stocks. Both sides would like to see greater stability in oil prices. "We agree on the objective," said Mr. Priddle, "but not on the means." IEA members have confidence in open markets to achieve long-run market equilibrium. "We would like to see the international oil market operating freely," said Mr. Priddle, "unconstrained by politically-determined production limitations." "But we welcome the commitment of OPEC to continuity of supply, he added, "and their disavowal of the use of oil as a political weapon."