Financial Express (India): Investment in energy must be secured, says Shell report: Wednesday, December 07, 2005

NEW DELHI:  Security of investment will be a key feature of energy security in coming years, according to the Shell Global Scenarios 2025 report.

While this issue is at present addressed through steps like bilateral tax and investment treaties, organisations like WTO and OECD need to play a stronger role.

In fact, ambiguity will persist as to what the term ‘energy security’ covers: physical supplies can be threatened by rising international insecurity as well as by depletion of supply sources.

Depending on the scenario, importing countries will worry more or less about a wide range of events: the relatively slow pace of investment in new infrastructure in the Middle East, intense competition among major importing countries for scarce resources and more.

The report that was presented on Tuesday by Royal Dutch Shell vice- president (global business environment) Albert Bressand, points out that they will put their trust in very different measures, from self-reliance policies to international dialogue on investments and opening markets to free trade.

Three different scenarios, including low trust globalisation, open doors and Flags have been identified as the ways to pursue energy security. In April this year International Energy Agency (IEA) for the low trust globalisation, it recommended letting market forces do their job more effectively by removing the fuel subsidies that hide true energy costs from consumers. u

In the words of Claude Mandil, IEA executive director, “The oil market is not functioning well because there is no significant demand response to price signals.” On the other hand, in one of its papers, the IEA asks governments to stand ready to intervene at short notice before a crisis grows out of proportion to rein in demand through coercive administrative measures such as driving bans or shorter working weeks.

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