UK's Brown to Open Energy Markets to Overseas
Investors
SAUDI ARABIA: June 23, 2008
JEDDAH, Saudia Arabia - Prime Minister Gordon Brown pledged on Sunday to
open Britain's energy markets to foreign investors in a "new deal" designed
to promote clean energy and end a conflict of interest between oil producers
and consumers.
At an emergency oil summit in Jeddah, Brown unveiled plans to work with
Saudi Arabia on technology to capture carbon emissions from energy plants
and with the United Arab Emirates on nuclear technology.
He told reporters that Britain and Qatar were looking at a new joint energy
fund to invest in British energy industries, and that talks with the Abu
Dhabi Investment Authority about investment opportunities in Britain were
moving forward.
"We want them to invest in alternative sources of energy in our economies,
just as we want them to allow our efficient oil companies to have a role to
play in the oil production of the oil producing countries," Brown said.
He said earlier this year that Britain was open to investment from the huge
sovereign wealth funds run by rich oil producers.
Little concrete has been announced, however, and he did not elaborate on
plans forged with the Gulf states, except to make clear nuclear energy and
renewables were the focus for Britain.
"The new deal is that everybody has an interest in a more stable energy
market, everybody has an interest in there being alternatives to oil,
everybody has an interest in there being a better and more efficient use of
oil," Brown said.
Like some other leaders of developed nations, Brown's popularity has taken a
hit as voters grapple with a slowing economy, a squeeze on bank lending,
falling house prices and accelerating inflation -- driven by fuel and food
prices.
The oil price has more than doubled in a year to almost US$140 a barrel,
triggering protests from Brussels to Bangkok over record fuel costs that
threaten the world's economy.
GREENHOUSE GAS TARGETS
Britain is also striving to meet targets to cut greenhouse gas emissions. It
reckons it will need investment of up to 100 billion pounds in renewable
energy to meet those goals, and the government sees sovereign wealth funds
as a valuable source.
On Saturday, Britain's Energy Minister Malcolm Wicks said the government
would unveil a "green revolution" next week which aims at getting 15 percent
of the country's energy from renewables by 2020 -- up from less than five
percent now.
Britain's prime minister argues that unless there is a better understanding
of the global problems of supply and demand, there is little chance of
affecting today's oil price.
He says consumers must lessen their dependency on oil by using other energy
sources, such as renewables and nuclear power, and by using energy more
efficiently.
Oil producers should also be given an opportunity to invest in alternative
energy sources to diversify their risk as developed nations gradually move
to low carbon economies.
"In this way we move from the old conflict of interest between producers and
consumers to building what the world needs and can allow us to move
forward," Brown said in his speech to the summit.
Brown has just under two years until he must hold a national election and
with his Labour Party trailing badly in the polls, he needs a marked
economic turnaround to boost his chances.
But while oil prices are high, the inflation rate risks sticking above the
central bank's two percent target, making it harder to justify the early
interest rate cuts Labour favours to stimulate growth.
Story by David Clarke
REUTERS NEWS SERVICE
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