The G7 energy ministers in Japan again reflected on the issue of power. They agreed on Monday to step up energy security and boost investment to counter price instability caused by the fall in crude oil prices. Ministers from Japan, Canada, Germany, Italy, the US, Britain and France and representatives from the International Energy Agency (IEA) and The International Renewable Energy Agency decided on boosting investment to increase production, and ensure a more stable supply.
Even with the resolve to continue investing in the energy sector, there was concern that falling prices of crude oil and natural gas could lead to lower
investment in new resource development projects.
The trend is growing as the global investment in oil production fell 20 percent in 2015 amid continuously plunging oil prices, according to IEAâ€™s data. Of course, this could lead to meagre production capacity and cause a rise in prices of crude oil and gas.
Apparently, the ministers see investing in the sector is extremely important to prepare for an increased demand for energy in the future. Their resolve for a review of the current practice of international transactions of liquefied
natural gas is an effort to ensure stable supplies of energy.
The participantsâ€™ interest on building more efficient installations with a lower environmental impact received a consensus during the meeting. This sense has been growing since the Paris Climate deal was signed.
As a result, the countries are urged to increase spending to construct energy efficient power facilities to reduce greenhouse gas emissions that are hazardous to the environment.
A plan to ensure a sufficient supply of natural gas in emergency situations with the objective of improving security of gas supply was addressed at the G7 meet given its vital role in the sector. Although the demand for gas is on the rise, the sector lacks a global regulatory framework like the one that exists for crude oil to ensure supply in these cases.
The participants shared viewpoints on the development of a market for liquefied natural gas for a market-based pricing. The UAE and Qatar partner in the sector.
The conclusions of the meeting will be discussed in the upcoming conference of the worldâ€™s most industrialised countries, which will be held in the Ise-Shima National Park on May 26 and 27.
The UAE had anticipated the energy challenges, and as a result decided to diversify its energy resources. The country pledged to invest $35-billion in clean energy by 2021 as it seeks to reduce its dependence on fossil fuels
following crudeâ€™s global price slide.
The UAEâ€™s four nuclear reactors currently under construction will be operational by 2017 or 2018 to provide 24-25 percent of electricity consumption in the country. This will be a catalyst for the comprehensive development in the UAE. The civil nuclear energy will be used to spur development in many sectors, including but not limited to water desalination.
It is worth noting that an international consortium led by Korea Electric Power Corp won a contract in 2009 worth more than $20-billion to build the four 1,400-megawatt reactors at Baraka, west of Abu Dhabi.
The G7 meeting was another platform to stress investment on efficient
energy installations towards a shift to the clean energy phase.