Emerging economies increasing ties with IEA

OREANDA-NEWS. November 13, 2015. China, Indonesia and Mexico are moving to expand their co-operation with the IEA, as efforts to enhance global energy security enter a new phase.

The three emerging economies are expected to sign association agreements with the IEA when energy ministers from the 29 IEA member states and other consuming nations gather in Paris on 17-18 November. The parties are still holding discussions on the details of those agreements.

These new arrangements are likely to stop short of bringing the countries into the IEA's emergency response mechanism, whereby each member country is required to hold reserves of crude or refined products equivalent to 90 days of the prior year's average net oil imports.

But the association agreements will give these countries access to IEA expertise on how to count stocks and keep reliable energy statistics. And they will be part of the discussions when the IEA contemplates its responses to supply disruptions. In 2011, for instance, the IEA orchestrated a 60mn bl release from strategic stocks in response to disruptions caused by the civil war in Libya.

China's interest in closer engagement with the IEA reflects its position as the world's second largest oil consumer. Indonesia is seeking closer ties to the IEA even as it is poised to rejoin Opec next month. And Mexico's new association with the IEA follows its historic efforts to reform its energy sector.

Besides announcing closer engagement with these three countries IEA ministers are expected to make statements on natural gas security and on oil security.

Representatives from six other "partner" countries — Brazil, Chile, India, Morocco, South Africa and Thailand — and the European Commission are also scheduled to attend the ministerial meeting, along with more than 30 energy executives from the IEA's Energy Business Council.

The IEA was founded in 1974 by OECD member nations, mostly oil importers, with the aim of enhancing energy security following the Arab oil embargo. To join the IEA, or International Energy Agency, a country must be a member of the OECD. Mexico and Chile are members of that organization, and Chile is a candidate for accession to the IEA.

The IEA has been trying for some time to strengthen ties with key emerging economies to reflect a world energy map that has changed dramatically since the IEA's early days. In 2013, the IEA signed partnership agreements with "three key partners," – China, India and Russia. Russia was not invited to attend the upcoming meeting.

Coming less than two weeks before the start of UN-sponsored climate negotiations in Paris, the parties plan to use the ministerial to discuss ways to work together on cleaner energy and energy security. US energy secretary Ernest Moniz will chair the meeting.