ENVIRONMENT AND ENERGY IEA
©Arnd Wiegmann/Reuters
Energy in a crisis Nobuo Tanaka, Executive Director of the IEA
The International Energy Agency (IEA) is 35 years old in 2009. A sister organisation of the OECD, it offers a timely reminder that a co-ordinated public response to a crisis can succeed.
I
n 1973-1974, when an oil embargo hit the industrialised world, the energyconsuming economies of the OECD realised that, unlike the OPEC countries, they had no forum from which to implement a swift and co-ordinated response. It was the US secretary of state, Henry Kissinger, who took the initiative in late 1973 to propose the creation of such a forum through the OECD, which already included the major oil-consuming countries. From that proposal, the International Energy Agency was born.
Today, 35 years later, the original aim remains as relevant as it was then: to promote the energy security of its 16 founding member countries by ensuring access to secure, reliable and ample supplies of oil in times of crisis. The agreement resulted in the creation of an oil emergency-response capability, which has remained integral to the role of the agency, even as IEA membership has grown to 28 countries with activities that span the globe (see footnote). However, since I have taken up my duties at the head of the IEA, I have been repeatedly impressed by the extent to which this goal, while still fundamental to
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the core mission of the agency, has broadened and deepened in the intervening years. These new developments point the way to the future role of the IEA as an international reference for a wide range of energyrelated issues. Founded in November 1974 as an autonomous agency within the OECD framework, the IEA was immediately operational. The International Energy Program (IEP), agreed among the participating members, created the substantive backbone of co-operation: a legally binding agreement to establish and maintain strategic stocks of oil that could be used to relieve pressures on individual member countries or otherwise released to stabilise markets in times of supply disruption. The mechanism has stood up to some stern tests, with the IEA helping to steady oil supplies and markets by the coordinated actions of its members during various international crises since that time. The emergency-response capability was recently activated in 2005, when hurricanes damaged production facilities in the Gulf of Mexico, and member
countries, based on the assessment of the IEA, made emergency reserves available to the market, effectively offsetting a major supply disruption. When hurricanes hit the same region in 2008, resulting in an even greater supply disruption than in 2005, IEA expert analysis showed that slower demand and higher stocks would offset the loss so that no intervention was needed. Again, the IEA’s readiness to act helped to calm the market. Secure energy Still, since 1974, energy markets have changed and the concept of energy security has evolved–secure, reliable and affordable energy supplies are still as essential as ever, but they are not limited to oil. IEA members have come to appreciate the increasingly important role of other energy resources in the global total: natural gas, coal, electricity, nuclear and renewables. In addition, energy efficiency in the use of existing resources is an important and growing part of overall energy policy development. Assuring energy security entails a fundamental integration of policy and practice with environmental protection, to produce sustainable economic growth over the longer term and mitigate climate change. These considerations have produced what we call the “three E’s” of balanced energy policymaking which the IEA is focused on today: energy security, economic development and environmental protection. The IEA has earned a worldwide reputation for the excellence, timeliness and reach of its statistics and analysis. But more than that, the agency acts as an energy policy adviser to member countries and beyond, and indeed, we have become a primary reference in energy-related matters for governments and organisations. We also work cooperatively with a number of other international organisations and forums, such as the G8, in whose summits we were first invited to participate in 2005 at Gleneagles. Our current work to produce alternative scenarios for a “clean, clever, competitive energy future” as a part of the on-going G8 Plan of Action on Climate Change, Clean Energy and
