Conference Report
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Changing Rules of the Game
Global Energy Governance and the Transatlantic Alliance
31 January - 1 February 2008
- Andrei Belyi, State University Higher School
of Economics, Moscow addresses a question to
Viktor Elbling, German Federal Foreign Office
Event context
At present, oil and gas stand firmly at the front and center as sources of global energy. Oil will remain a critical component of our energy mix, supplying an estimated 33 percent of global energy as far into the future as 2030. Hence, it remains the single largest fuel in the primary fuel mix and total consumption is expected to increase by 70 percent. Gas, on the other hand, accounted for 21 percent of world marketed energy in 2004, rising to an estimated 23 percent by 2030. Therefore, reliable access to oil and gas at a reasonable cost will continue to be of prime strategic value for the US and the EU.
It is thus not surprising that oil and gas markets do not operate in a political vacuum. Since the end of the Second World War, a set of formal and informal institutions have emerged that govern central aspects of financing, trading and hedging oil and gas ventures. These institutions regulate investment by setting rules on financial markets, through investment treaties and via bilateral, regional and global trade agreements; they structure oil and gas transport by transit and transportation arrangements; and finally, they address short-term supply risks on the consumers’ side and manage supply on the producers’ side.
The development of the underlying ‘rules of the game’ in these institutions very much reflected the realities of the Cold War era. Yet, a number of significant trends are currently transforming the framework conditions for global energy governance – and require us to rethink the suitability and effectiveness of current arrangements and potential transatlantic policy responses to tackle the resulting challenges.
- The rise of new consumers;
- Increasing scarcity and rising exploration and production costs, especially of oil;
- The increasing role of state players on oil and gas markets;
- The elevation of climate protection and domestic resource governance to “high energy politics”.
Together, these trends present significant challenges to the existing institutions that structure the global energy landscape. It is crucial to determine exactly what implications these trends will have for existing institutions and mechanisms of global energy governance, what the consequences specifically for the transatlantic partners are, and what they can do to effectively deal with the resulting challenges.
- From L to R: Alan Hegburg, Department of Energy; Peter Eigen, Extractive Industries Transparency Initiative; Jörg Himmelreich, German Marshall Fund of the United States; Graeme Preston, Directorate-General for Transport and Energy, European Commission
Event objectives
In collaboration with the New America Foundation, GPPi recently launched a new research program that seeks to tackle some of these crucial issues. This conference, organized in partnership with the Dräger Stiftung, was designed to present the research framework and, in close collaboration with researchers, policymakers and industry experts, to further refine key research questions.
The conference brought together professionals from all relevant sectors (government, NGOs, business, the media, think tanks and universities) in order to promote a strategic community. It aimed to build bridges between the US and Europe; among various sub-communities dealing with sustainability, security of supply and economic efficiency; and among policymakers from different parts of the government, civil society, business and the media.
Starting with an opening speech outlining the issues of global energy governance in the 21st century, panel discussions proceeded to examine the main challenges for energy governance institutions that: 1) regulate investment by setting rules on financial markets; 2) govern investment treaties and via bilateral, regional and global trade agreements; and finally, 3) address short-term supply risks on the consumers’ side and manage supply on the producers’ side. Two panel discussions addressed the first two issues followed by the formation of small working groups that discussed some of the specific challenges and questions facing global energy governance institutions based upon the trends outlined above. A third session of working groups focused on the third issue followed by a keynote speech and additional panel discussion which solicited additional input on transatlantic policy options.
Please click here to download the conference report.