G8 leaders noted that global demand for oil, natural gas and coal would rise more than 50 percent above current levels by 2030, and that these fossil fuels would still constitute 80 percent of the world's energy supply at that point. This comes in the context of increasing import dependence in many countries; enormous investment requirements along the entire energy chain; the need to protect the environment and to tackle climate change; the vulnerability of the critical energy infrastructure; political instability, natural disasters and other threats. Given the global nature of these challenges along with a growing interdependence between producing, consuming and transiting countries, the G8 leaders stressed the need for strengthened partnerships for between all stakeholders to enhance global energy security.

The Summit's focus on predictability and stability of supply comes after a moment of disruptions in gas supply as a result of Russia's decision to suspend the supply of gas to Ukraine early this year, following disagreement on pricing. The decision prompted concerns in Europe over Russia's monopoly in gas exports to Western Europe from Central Asia and of the country's attempts to buy downstream gas distribution assets in Europe.

While not all G8 members have ratified the Kyoto Protocol to the United Nations Framework Convention on Climate Change, those that are Parties to the Protocol reiterated their commitment to meet the objectives of reducing greenhouse gases and dealing with climate change, with an emphasis on the flexibility mechanisms and the role of the private sector. Leaders referred to the importance of enhancing energy efficiency and energy saving, noting that since two thirds of world's oil is consumed by the transport sector and its fuel consumption is outpacing general energy consumption, special attention should be paid to this sector.

The diversification of the energy mix, including by developing cleaner low-carbon energy, nuclear energy, renewable energies and alternative energy technologies, was another component of the Plan of Action. In that regard, the Summit welcomed the work being undertaken by organisations such as the World Bank and the International Energy Agency on developing a framework for clean energy and sustainable development and on identifying alternative energy scenarios and strategies to support and implement elements of the Gleneagles Plan of Action which adopted at the G8 Summit last year. The Plan, however, did not outline how alternative energy sources would be developed within a global agenda.

Russia is the world's largest gas producer and exporter, and its role in the emerging global gas market is expected to further gain in importance. However, as Russia's key producing fields decline, the ability of Gazprom, Russia's state-controlled energy company, to increase gas production is critical to maintaining international energy security. Increased investment in Russia's energy infrastructure would not only contribute to increasing world supplies, but also contribute to energy saving and reduction of CO2 emissions. The International Energy Agency estimates that at least 30 billion cubic meters -- a fifth of the country's exports to European OECD countries -- could be saved annually by the introduction of more advanced technology and the implementation of energy efficiency, which would also generate reductions equivalent to 150 million tonnes of CO2 equivalent.

While oil and gas importing countries are concerned with issues of security of supply, Russia has expressed concerns over stability of demand for its oil and gas. Against this backdrop, the Summit's emphasis on the creation of a transparent and predictable global regulatory framework that would govern investment and trade in energy puts the spotlight on Russia's demand for accession to the WTO. A series of bilateral negotiations has already taken place with almost all concerned countries. The US remains the only country with which Russia has not yet concluded bilateral accession negotiations. Among the outstanding issues are access to the financial services market, phytosanitary controls, intellectual property protection and access to the aircraft market. As a major oil and gas exporting country, Russian accession is likely to generate greater focus on how WTO rules, including rules on competition and subsidies, could be applied more generally to the energy sector.

Some civil society groups voiced concerns that the summit put too much emphasis on increasing supply of fossil fuel-based energy sources, a factor that might further undermine the ability to effectively address global climate change and to strengthen global efforts to develop alternative and renewable energy technologies. Protestors also attacked the endorsement of nuclear energy as a means to "contribute to global energy security, while simultaneously reducing harmful air pollution and addressing the climate change challenge", pointing to the risks of the technology. "Nuclear reactors are dangerous, extremely expensive, take many years to build, and require massive government subsidies," the demonstrators said in a statement.

Additional Resources

Official Website of the G8 Presidency of the Russian Federation

"The last push for Russia's WTO membership?", Bridges Monthly, June-July 2006

"Protesters Condemn G8 Support of Nuclear, Coal, Oil," ENS, 17 July 2006; "From Group of 8, Energy Focus Is on Oil," New York Times, 17 July 2006; "IEA supports G8 energy security focus and calls for optimising Russian natural gas to enhance energy security and environmental benefits", IEA, 18 July 2006.