Article by Christoph Frei

Secretary General's impressions from IEF, WEF Africa, the Arab Energy Conference and a meeting with Pascal Lamy

The International Energy Forum (IEF) has achieved a milestone during its Cancun meeting on 30/31 March. 66 countries signed a charter to further promote and structure the producer-consumer dialogue, with a particular focus on reducing oil price volatility and a possible expansion to gas markets. IEA Executive Director, OPEC Secretary General and myself were invited speakers at the prominent Ministerial Forum with minister-level presence from signatory countries.

With this milestone the 2004 founded IEF with headquarters in Riyadh has further established its position as a multilateral dialogue platform with a focus on oil & gas markets transparency. As such it has to closely coordinate with IEA and OPEC and acts as an institutional bridge between the two organisations that represent consumer and producer interests respectively. The key challenge for the young organisation will be the identification and delivery of specific and effective actions that meet the expectations and build on the broad consensus gathered so far. WEC, with the experience gained from the Energy Policy Assessment can play a constructive and supportive role.

The World Economic Forum (WEF) on Africa that took place in early May in Dar es Salaam, Tanzania, covered a number of issues of interest to WEC. I had the opportunity to chair the panel on energy poverty. One of the key policy barriers identified during the panel discussion was the absence of regulatory frameworks that enable decentralized systems as well as local or third party ownership. It was highlighted that none of the Millennium Development Goals can be delivered without access to modern energy services for the 1.5 billion people who today live without it.

Rural communities account for 85% of energy poor. Institutions, including the International Financial Institutions (IFIs), and also most governments focus on grid-expansion and densely populated urban areas. WEC has identified as key challenges in this context the lack of adapted financing mechanisms that can deliver on rural energification schemes; poor education and shortage of local skills for project initiation, implementation and system operation; the absence of easy local access to components for equipment maintenance and enhancement; the lack of understanding and political support necessary to replicate enduring local ownership models. These issues feature prominently on WEC's regional agendas, particularly in India and Africy regions.

A prominent issue outside the official panels was the 3.2 billion World Bank loan for a S-African coal plant. The fact that US, UK and France abstained from voting was seen by insiders to make similar deals more difficult in the IFI space.

Also in early May I had the privilege to be part of the opening plenary of the 9th Arab Energy Conference in Doha, Qatar, which was coorganised by our Vice-Chair Abbas Ali Naqi. The panel was chaired by Minister Al-Naimi and included Secretary General of OPEC Abdullah Salem El-Badri, IEA Executive Director Nabuo Tanaka, IEF Secretary General Noé Van Hulst and Nobel Price laureate Rajendra Pachauri.

Popular issues during the conference were nuclear, energy efficiency and renewables, all of which are seen as part of the solution for the region. Water in general and the energy-water nexus in particular were highlighted by many experts as issues that need the regions full attention and collaboration. As an example, enhanced oil recovery (EOR) coproduces 3-8 bbl of water per bbl of crude and could be used for agriculture. On the other hand, carbon capture and sequestration is expected to increase the water footprint of fossil-thermal plants by an order of magnitude of 30%, depending on technology. Efficient pricing, a further challenge for the region, remained the 'white elephant' in the room.

Finally, together with our Chair we had the opportunity to meet Pascal Lamy at the WTO headquarters, to discuss WEC's work related to Rules of Energy Trade. The two issues that were prominent in the discussion were the definition of "green goods and services" as well as the legitimacy of "border tax adjustments" to avoid carbon leakage. In the continuation of Rules of Energy Trade there is an opportunity for WEC to develop constructive proposals on these issues.

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