Economic sectors

We have entered an age of expensive oil, with prices fluctuating around 70 dollars; however, we cannot speak of a “third oil shock”. Indeed, prices have been increasing progressively since 2003, with no peak comparable to those of the previous oil shocks (estimated to be at least 100 dollars a barrel, taking inflation into account).

An entire series of factors are combining to raise the price of oil: market-specific tensions (growing demand, restricted supply, opacity), risks that affect supply, such as natural disasters, conflicts and political tensions in several key production and transit regions, etc.

In the international arena, the notion of «energy security» is being used more and more, and does not consist merely of the security of the oil supply in Western countries. Indeed, “energy security” has three fundamental dimensions: economic, environmental and that related to development:
  Supply security, i.e. the balance between supply and demand (referring primarily to hydrocarbons);
  Supply “sustainability”, i.e. the compatibility of the production and consumption of energy with sustainable development. Resources are limited and global warming requires that limits be set on greenhouse gas emissions;
  Access to energy for all.

In this context, it should be noted that the energy aspect is becoming increasingly salient for diplomacy. While several countries, including France, have been taking the energy factor into consideration when drafting foreign policy for a long time, the phenomenon is new for others and tends to be more marked. Energy is also becoming increasingly present in EU foreign policy.

Strengthening Europe’s energy security was one of the major topics addressed in the past two European Councils held in March and June 2006, comprising two constituents:
  an internal constituent: improving the transparency of the energy markets, searching for alternate energy sources;

  an external constituent, focussed on developing a genuine partnership with producing and transit third countries, and integrating the energy dimension in other EU policies.

The Member States need to continue thinking about energy issues in terms of the presentation of the Commission, presided over by Germany during the first half of 2007, of a strategic analysis of energy. Revised on a regular basis by the Heads of State and Government, this document will, in particular, address objectives and actions that are necessary for an external energy policy in the medium and long terms.

Energy is a relatively new issue in international arenas. Most of the restrictive principles regarding energy security are included in the constitutive treaty of the International Energy Agency (IEA) and in that of the Energy Charter. Since 2005, the topic of energy security has been at the heart of the international agenda, in connection with climate change. The Russian presidency of the G8 made energy security its top priority for the summit in St Petersburg in July 2006. The G7/G8 Ministers of Finance have met on several occasions to review the most urgent measures to take in order to handle rising oil prices. In April, more than 60 countries and international organizations met in Doha, Qatar in the framework of the biggest dialogue between hydrocarbon producing and consuming countries: the International Energy Forum (IEF, 22-24 April). The same month, the Commission on Sustainable Development (CSD 14) also met at the United Nations to discuss the issue of energy.

In the framework of these international arenas, France plays an active role and defends with determination solutions that aim to guarantee sustainable access to energy for all at a reasonable price and in an environmentally friendly manner. In practical terms, these solutions are resulting in actions regarding:

  Demand : for increased control over demand and improved energy efficiency in consumer countries and producing countries alike. One of France’s key proposals in this area is the establishment of energy conservation certificates (“white certificates”).

  Supply : the level of supply is maintained and increased by making necessary investments, both upstream and downstream. The IAE estimates that needs total 17,000 billion dollars for the period 2004-2030, of which 3,000 billion dollars are for the gas and oil sectors alone.

The extent of these investments means that international companies have greater access to the resources of producing countries and a climate that is favourable to their investments.

  Access to energy statistics : we actively support the work of JODI, an initiative that has made it possible to create an online database of oil statistics.

  The transparency of financial flows related to the development of energy resources: we are taking part in the Extractive Industries Transparency Initiative (EITI), which encourages producing countries and operating companies to publish the revenue generated from natural resources.

  Strengthening the dialogue between consuming and producing countries.

  The diversification of energy packages, including nuclear energy.

  The development of renewable energy, combined with the fight against climate change.

The fight against “energy poverty”, the rise in energy prices affecting developing countries as much if not more than the growth of developed countries.

Updated on 13.06.06