MercoPress. South Atlantic News Agency

G11emphasize energy efficiency rather than increased supply

Energy ministers from the G 8 plus China, India, and South Korea meeting in Japan to address energy prices adopted Sunday a joint declaration calling for more domestic energy efficiency rather than insisting on oil producing countries to increase supply

G8 members (US, Japan, Canada, Germany, UK, Italy, France and Russia) plus China, India, and Korea consume 65% of the world's petroleum. "The situation regarding energy prices is becoming extremely challenging," said Japan's energy minister Akira Amari after the meeting ended. "If we leave this situation as it is, it could lead to a recession of the world economy." Prior to the meeting, the representatives from China, India, Japan, Korea and the U.S. held a second five-way energy ministerial conference, and called for boost in oil production by oil supplying countries. They also agreed to cooperate on improving energy efficiency and developing new types of renewable energies. But OPEC president Chakib Khelil said the organization "would not review the situation again until it meets in Vienna on September 9" and insisted that the market is well supplied and speculation and geopolitics are influencing prices. OPEC produces 40% of the world's oil. Participants agreed that increasing energy efficiency and investing in alternative technologies, including carbon storage, were essential to taming energy prices. "We will continue to vigorously promote policies and measures for improving energy efficiency" said G8 in a release. "On energy efficiency, and energy diversification, we all recognize that tremendous progress has been made but more has to be done" said Gary Lunn, Canada's natural resources minister. Europe, Japan and the US have already discussed the possibility of setting up a framework for exchanging information on energy-saving, called the International Partnership for Energy Efficiency Cooperation (IPEEC). Last Friday crude surged to almost 140 US dollars a barrel while the US dollar fell sharply against the Euro and a senior Israeli politician raised the possibility of an attack on oil-rich Iran because of its nuclear development. The shock leap, combined with the weakest US jobs data in 22 years, prompted panic-selling on Wall Street, with the Dow Jones slumping more than 3% and all 30 blue-chip stocks on the index losing ground. The US gloom also infected European markets, which fell to a seven-week closing low amid renewed fears about the outlook for the global economy. Analysts are divided over how much of the recent oil price spike flows from a true global supply-demand imbalance and how much stems from speculative investors punting on future higher prices. But most agree that there is little sign that the oil price will fall any time soon, with some experts forecasting that it reach as much 150 US dollars by July 4th.