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Energy Charter Secretariat
NEEDS Forum 2Krakow, 5-6 July 2007
Tim Gould
Senior Advisor to the Secretary General
Energy Charter Secretariat
An Energy Charter Perspective on Energy
Security
2Energy Charter SecretariatSource: BP Statistical Review 2007
Energy Prices
3Energy Charter SecretariatSource: BP Statistical Review 2007
World Fuel Shares
4Energy Charter SecretariatSource: BP Statistical Review 2007
Shares of World Energy Consumption
5Energy Charter Secretariat
Production capacity limit
Hotelling rent
Ricardian rent
Volume
Price
Demand curve
Supply curve(cost of supply)
Energy efficiency
Economic growth
E&P
Tech
no
log
y
Under influence of consumers
Under influence of producers
Cost-oriented price
Replacement value-oriented price
Elements of Interdependence
6Energy Charter Secretariat
The Energy Charter Treaty
7Energy Charter Secretariat
Energy Charter Principles
National sovereignty over energy resourcesRespect for contract and propertyStable and open frameworks for flows of energy, capital, technology and investmentAn orientation towards market solutionsNon-discriminationTransparency
Energy efficiency and sustainable
development
8Energy Charter Secretariat
ECT and Investment Security
• Energy Charter Treaty is the only broad multilateral investment protection treaty(equivalent to 1000+ BITs)
• Reduction in non-commercial risk for private investors from other participating states
• Promotes respect for contract and for property
• Enforceable through state-state and investor-state arbitration
• Functioning instrument of international law: currently 15 cases brought to arbitration (2 awards, 2 settlements, 11 pending)
9Energy Charter Secretariat
Oil and Gas Project Investment
Source: IEA WEO 2006
Total Investment Needs(2006-2010):$ 306 Billion
10Energy Charter Secretariat
Energy Trade
Source: BP Statistical Review 2007
11Energy Charter Secretariat
Reliable Cross-Border Flows
• Provisions based on WTO
• Particular focus on specific challenges associated with transit of energy through fixed infrastructure (pipelines, grids)
• Obligation on participating states to facilitate transit and to ensure the reliability of existing flows
• Unique conciliation procedure in case of transit disputes
12Energy Charter Secretariat
GDP, Energy and Carbon Emissions
Source: BP Statistical Review 2007
13Energy Charter Secretariat
Efficiency and Security
• With limited direct leverage over resource-owners, energy efficiency is a major instrument for net energy importers to improve security (together with fostering renewables, diversification and improving energy production technology)
• Resource-owners also have interest to improve efficiency: low domestic prices come with a technological cost, and limit available export volumes
• International cooperation to improve energy efficiency likely to be major element of post-2012 framework for combating climate change
14Energy Charter Secretariat
Priorities
• Ratification and implementation of the Treaty by all signatory states
• Ensuring that the Charter responds to new challenges and developments on international energy markets
Substance: possibility of additional Protocols, Declarations, non-binding instruments (Model Agreements, Best Practice Documents)Geographical expansion: East and Southern Asia, the Middle East and Mediterranean regions
15Energy Charter Secretariat
More information
Energy Charter web site www.encharter.org
