Sunday, Jun 08, 2008
By Mari Iwata
Of DOW JONES NEWSWIRES
AOMORI, Japan (Dow Jones)--Group of Eight energy ministers plus officials from three Asian oil consumers Sunday put the spotlight on energy efficiency as the most immediate solution to record oil prices.
The G-8 plus China, India and South Korea also recognized the growing appeal of nuclear power to countries worried about energy security and climate change.
"We're at the verge of a new nuclear age, and that would be a positive thing for the world," said John Hutton, U.K. Secretary of State for Business. He described nuclear energy as a "proven form of low-carbon power generation."
In a meeting held in Aomori, northern Japan, the 11 countries agreed to set up an umbrella body - known as the International Partnership for Energy Efficiency Cooperation - to promote more widespread energy saving initiatives and share experience.
Voicing their "serious concerns" at the sharp run-up in crude to a record high settlement Friday of $138.54 a barrel, ministers said countries need to spend more on testing alternative technology.
"Climate change issues and energy issues are two sides of the same coin, and it's essential that we address these (and) solve these two together," said Akira Amari, Japan's minister of economy, trade and industry.
Ministers backed plans for 20 large-scale demonstration projects for carbon capture and storage - the process of trapping carbon dioxide and pumping it into underground reservoirs - globally by 2020.
Amari, hosting the summit, said the discussions Sunday included "positive comments from many countries regarding nuclear energy."
Several ministers voiced their support for renewed investment in nuclear energy - which stagnated following the Chernobyl accident in 1986 - citing its ability to improve energy security and reduce CO2 emissions.
Italy, whose energy minister Claudio Scajola attended the G8 meeting, said last month it wants to reintroduce nuclear power after a break of two decades, with construction of new plants starting by 2013.
Debate is also taking place in Germany, where the ruling Grand Coalition of the Christian Democratic Union, headed by Chancellor Angela Merkel, and partner Social Democrats are split on whether nuclear power should make a comeback.
No Power To Check
As well as encouraging a renaissance in nuclear power, high crude oil prices could promote investment in new technologies, such as commercial use of methane hydrate, and carbon capture and storage.
Given that, "we can say there's some positive side in high energy prices," said Nobuo Tanaka, executive director of the International Energy Agency, the energy supply watchdog under the Organization for Economic Co-operation and Development.
The IEA estimates that replacing old coal-fired power stations and steel plants with ones equipped with the latest technology would reduce annual carbon dioxide emissions by some 2 billion metric tons. This is about 7% of annual global CO2 emissions, and would likely lead to a similar cut in fossil fuel usage.
Such energy-sector development, including clean coal technologies and building new nuclear power plants, would require around $45 trillion to 2050, said Tanaka.
"We must take action as soon as possible" to effectively combat climate change, he warned.
To address both surging energy demand and climate concern, U.S. Energy Secretary Samuel Bodman said: "We simply must increase the level and breadth of investment all around the world - and that means promoting aggressive investment in renewable energy and other alternative energy technologies as well as the development of traditional hydrocarbon resources."
The IPEEC may be well-placed to coordinate action on energy efficiency, as it is the first anti-global warming body to embrace the largest CO2 emitters as well as the European Union and Japan.
The three largest emitters - the U.S., China and India - represent roughly half the global total. And China and India's emissions are expected to grow further as their energy consumption increases in step with economic growth.
India's ambassador to Japan, Hemant Krishan Singh, expressed his country's interest in building energy efficient coal-fired plants, and asked developed countries to provide such technology.
The IPEEC may be able to promote such exchanges, but it is unlikely to have any power to check and bind member countries, according to a senior Japanese government official. Details of how the organization will operate will be discussed in the next few months, the official said.
This inevitably raises doubts about its ability to have any real effect on climate change and energy prices, and Sunday's joint statement was carefully crafted to avoid suggestions participating countries were seeking measures that could hamper the economic growth of developing countries, said the official.
Hutton said the temptation to demonize the emerging Asian economies because of their sharp increases in greenhouse gas emissions should be strongly resisted.
Leaders from around the world will meet in Copenhagen, Denmark, next year to try to agree a global deal on climate change. Such a deal would set out emissions cuts beyond 2012 when the Kyoto Protocol ends.
The U.S. is the only major developed country that hasn't agreed to binding emissions caps as part of the Kyoto pact.
Sunday's call for coordinated action will be "one of the major building blocks in the road map" toward a Copenhagen agreement, French Ecology Minister Jean-Louis Borloo said.
-By Mari Iwata, Dow Jones Newswires; 813-5255-2944; mari.iwata@dowjones.com
(END) Dow Jones Newswires
08-06-08 0932GMT
