G8 Supports Open, Efficient, Competitive Energy Markets

Jul 18, 2006 -- STATE DEPARTMENT RELEASE/ContentWorks

Leaders of the most industrialized countries plus Russia have endorsed "transparent, efficient and competitive" energy markets as the best way to enhance global energy security but acknowledge that they sometimes pursue different approaches to the challenge of ensuring it without harming the environment.

In a statement and action plan issued July 16 at their summit in St. Petersburg, Russia, leaders of the Group of Eight (G8) said that free, competitive and open markets are essential to the efficient functioning of the global energy system.

Specifically, they have expressed support, in principle, for the Energy Charter, an international treaty that calls for open access to energy resources and transport infrastructure, and related international energy cooperation.

Russia has signed the charter but so far has not ratified it. The European Union, which depends on Russia for one-fourth of its natural gas supplies, has been urging the country to fully ratify the treaty in the hope that such an action would introduce more competition in the Russian natural gas and pipeline sectors.

The Bush administration also has encouraged Russia to improve the climate for foreign investment in its energy sector.

The lengthy G8 document said that hydrocarbons would likely to continue to play a leading role in total energy consumption in the future. Nevertheless, the leaders put more emphasis than in the past on alternative energy sources such as renewables and biofuels, low-carbon and more efficient hydrocarbon-based technologies and energy efficiency.

NUCLEAR ENERGY

Although the leaders reached consensus on principles of energy security, they sometimes differed on specific measures to achieve it, including the role of nuclear power and ways of addressing the climate change.

The document said that supporters of nuclear power among the G8 countries -- which include Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States -- believe that its development will contribute to global energy security, "while simultaneously reducing harmful air pollution and addressing the climate change challenge."

According to news reports, those supporters do not include Germany, the only country in the G8 that is not considering the use of nuclear energy in the future and actually plans to close its existing nuclear power plants by the early 2020s.

The Bush administration and Congress strongly have supported expansion of the U.S. nuclear power sector through partnerships with energy companies, incentives and legislative changes.

The document said that the G8 countries are "committed to further reduce the risks associated with the safe use of nuclear energy," a phrase that has been emphasized by German officials present in St. Petersburg, according to news reports.

KYOTO PROTOCOL

The G8 leaders said that they intend "to meet our shared and multiple objectives of reducing greenhouse gas emissions, improving the global environment, enhancing energy security and cutting air pollution in conjunction with our vigorous efforts to reduce poverty."

But the Kyoto Protocol as a way of achieving these goals has not been endorsed by the entire G8.

The Kyoto Protocol, an amendment to the U.N. Framework Convention on Climate Change, was negotiated in Kyoto, Japan, in December 1997. Countries that ratify this protocol commit to reduce their emissions of carbon dioxide and five other greenhouse gases, or engage in emissions trading if they maintain or increase emissions of these gases. The agreement came into force on February 16, 2005, following its official ratification by Russia on November 18, 2004.

"Those of us committed to making the Kyoto Protocol a success underline the importance we attach to it," the document said.

The United States does not support addressing the climate challenge through mandatory greenhouse gas emission limits included in the Kyoto Protocol. (See related article.)

For ongoing coverage of the G8 meetings, see G8 Summit 2006, St. Petersburg, Russia.