MOSCOW, March 16 (RIA Novosti) - Russian Minister of Industry and Energy Viktor Khristenko addressed the issues of global energy security, fuel and energy market effectiveness and the stability of the world's energy system at a meeting of energy ministers of the Group of Eight industrialized nations Thursday.
Opening the meeting in Moscow, Khristenko said high oil prices had affected poor nations and hampered global economic growth. "The price situation is not very favorable [on global markets] at the moment, as high oil prices have sent prices for other energy resources and some other products up," he said.
The minister stressed that the oil price fluctuations and their contingency on unpredictable economic factors influenced global economic trends, and were particularly harmful for poor nations.
The minister called for the creation of a reliable global transportation system to ensure the supply of energy resources to world markets, including the construction of pipeline networks and tankers to transport liquefied and gaseous hydrocarbons.
The minister also suggested that international electricity supply networks should be formed as part of the future energy system to ensure the diversification of energy sources and energy consumption centers across the globe.
Khristenko urged industrialized nations to share advanced energy production technologies and energy efficient equipment with poor nations and to provide "third world" countries with financial aid, including from private sources, enabling these 2 billion people to gain access to affordable energy.
He said energy efficiency was a key tool to control demand for energy resources and help stabilize markets.
"We cannot ignore important instruments - like the diversification of the energy resources portfolio according to fuel types, suppliers and consumers, and also the transportation of energy resources - that could lower energy security risks not only for individual countries, but also for the global community as a whole," he said.
Khristenko said resources should be diversified along various lines, and alternative energy sources and new technologies should be explored.
"The joint efforts of G8 and other countries on the broader use of sustainable and alternative energy sources, and the development of innovative technologies in the energy sphere...can make a significant contribution to the solution of this strategic task," he said, adding that safe nuclear energy was also important.
He said market approaches aimed at increasing energy supplies and restraining the growing demand for energy were needed to rebuff challenges to energy security, and that these approaches should "boost the development of market mechanisms for pricing, competition, energy efficiency and energy saving."
The official called for broader international energy cooperation, including in the high-tech sector.
"There is a need for collective efforts to broaden and invest in activities to prospect for new hydrocarbon deposits on land and offshore, and to raise the efficiency of oil and natural gas production and processing with the use of new technologies and vehicles for the delivery of energy resources to consumers," he said.
Khristenko said fossil-fuel demand now exceeded supplies, mainly due to disproportionate global distribution of production and consumption, as well as underdeveloped transportation infrastructure and the rise of emerging markets with huge appetites for energy.
He pointed to the necessity of creating a favorable investment climate.
"Securing sufficient investment in the development of the global energy sector is only possible in a favorable investment climate and given political stability in countries that produce and consume energy resources, as well as in transit states," the minister said.
Investment incentives include good legislation, clear tax rules, respect for contracts, reliable dispute settlement procedures, and measures to reduce red tape, he said.
Khristenko cited figures from the International Energy Agency, set up to advance energy and technology cooperation, which said a total of $17 trillion should be invested in the energy sector before 2030. He said much of that amount should go to finance production, transportation, and refinement.
He also said energy projects had to be more viable economically and financially to lower the risk of interruptions in power supply, and proposed various insurance and financial risk unbundling schemes to this end.
The minister said that ensuring security at key energy facilities must be a priority for the G8.
"Considering the risk of terrorist acts at key energy facilities, including nuclear power plants, pipelines, ports, etc., their vulnerability to disasters, and the practice of unauthorized tapping of energy resources, international cooperation becomes extremely important to ensure the physical security of these facilities," Khristenko said.
The G8 energy ministers are attending a two-day series of meetings in Moscow that began Thursday. The talks are focused on energy-related issues, as Russia has declared energy security the number one issue for its 2006 G8 presidency.
