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Below are highlights from the speech given by International Energy Agency (IEA), Executive Director Maria van der Hoeven at the 2014 APEC Energy Ministerial Meeting.

‘In the 40 years since the IEA was created, the definition of energy security has evolved, as has our role. No longer just about oil supply security, it now covers security of natural gas and electricity, as well as economic growth and environmental sustainability. It is our job to engage with the world on all of these issues and put them together in a global context.’

Oil

‘Let me start with oil. Led by China, the US and Japan, APEC economies represent just over half of global oil demand. Although APEC’s share of global oil production has been falling, several APEC countries are making huge contributions to global supply. I speak of course of Canada and the US, where unconventional energy output is surging, as well as Russia, the world’s top energy exporter.

‘As we look to the future, most of the vibrant APEC economies here in Asia will become more dependent on oil imports. They must therefore be well prepared for supply crises. This aspect of energy security, responding to a disruption in energy supplies, remains at the core of the IEA’s mandate. As you know, all our members have an obligation to hold emergency oil stocks, a policy that we encourage with our partners as well. In the event of a large disruption, where the market would have a difficulty of coping and where severe economic harm could be incurred, the IEA would coordinate a response. Preparation is key, and that is why the emergency response systems of our members, and recently also those of some partners, undergo regular and thorough reviews and why regular Emergency Response Exercises are held.’

Gas

‘Natural gas has the potential for improving energy security and yielding economic and environmental benefits in Asian Pacific countries, and Asia is already home to the world’s fastest growing gas market. And yet this market is dominated by long term contracts in which the price of gas is indexed to that of oil. In recent years, this has helped keep Asian gas prices much higher than those in other parts of the world, leading to serious questions about the sustainability of the system and its effects on Asian competitiveness.

‘The future role of gas in Asia will depend considerably on how the pricing of natural gas is tied to the fundamentals of supply and demand in the region. Credible state commitment to regional gas market competition can instil confidence, encourage new market participants, and promote the use of transparent hubs to balance producer portfolios.’

Beyond

‘Energy security is more than oil, more than gas, and more than can be touched upon in a few minutes, just think about the increasingly important role of renewables and energy efficiency. More than ever, it is a global shared responsibility.’

Edited from speech by

Read the article online at: /business-news/02092014/van-der-hoeven-on-energy-security/