AOMORI, Japan, (Reuters) – Group of Eight energy ministers on Sunday looked inward for solutions to oil’s unrelenting rally, touting the need for domestic efficiency rather than piling pressure on a resistant OPEC to pump more crude.
Oil prices CLc1 roared more than $10 higher on Friday to a record above $139 a barrel, the biggest ever one-day surge, raising the threat of renewed protests across Europe and potentially forcing more Asian nations to relent on costly subsidies, stoking inflation.
But the Group of Eight nations that runs from top consumer the United States No. 2 oil exporter Russia — plus non-G8 China, India and South Korea — could agree on little more than expressing “serious concerns” over oil prices, according to a preliminary communique given to reporters.
Amid a growing acknowledgement that the group of mainly consumer nations will have to find ways of tempering their own demand rather than counting on producers to pump ever more oil, they focused on technology, conservation and diversification.
“We will continue to vigorously promote policies and measures for improving energy efficiency,” the 11 nations, which account for two-thirds of world energy consumption, said in the communique ahead of their meeting in Aomori, northern Japan.
They will share best practice and encourage more innovation in energy-efficient buildings, electronic equipment and transport through the newly formed International Partnership for Energy Efficiency Cooperation, they said.
The group also called on oil producers to boost investment to ensure steady supplies, but did not ask them to pump more crude today, despite growing public anger over climbing fuel prices, likely to haunt G8 leaders when they meet in Japan early next month.
Speaking before a trip to Japan on Sunday, Australian Prime Minister Kevin Rudd urged the G8 to “apply the blow-torch” to the Organization of the Petroleum Exporting Countries.
But OPEC officials have repeatedly rebuffed such calls over the past year, saying the market remains well-supplied and that soaring prices are beyond its control. Top exporter Saudi Arabia has, however, said it will increase output this summer to help meet peak demand, a move that failed to halt oil’s rise.
The ministers also acknowledged the need to push for cleaner energy in the wake of the International Energy Agency’s call for a $45 trillion energy “revolution” to halve carbon emissions by 2050, a goal G8 host Japan is set to push next month.
They agreed on the key role of carbon capture and storage (CCS) technology, aiming for large-scale CCS demonstration projects in developed and developing nations.
The IEA report released on Friday, commissioned by G8 leaders three years ago, said the world would need to effectively “decarbonise” the power sector by building dozens of billion-dollar CCS plants over the next 40 years, although world governments remain at odds over who should foot the bill.
About 190 nations are racing to craft a framework by the end of 2009 to succeed the Kyoto Protocol, which binds 37 advanced nations to cut emissions by an average of 5 percent below 1990 levels by 2008-12.