Diversity first step to security
By Karen Remo-Listana
Posted: 20 March 2006
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The issue of energy policy and security has to be international and inclusive, according to Nick Butler, BP's Group Vice President for Strategy and Policy.
“Energy security cannot be achieved in one country. To achieve a sustainable outcome we need a combination of public policy and private investment, all of which are focused on the effective operation of markets,” Butler said during the Aiken Gump Energy Conference in Dubai last week.
Development of the maximum diversity of supply and of the infrastructure, he said, is the first step in the restoration of energy security.
Butler added: “Dependence on single sources and single lines is a recipe for insecurity and volatility. That in turn requires the opening of resources to investment so that the supplies which are available at a reasonable cost in the Middle East and in Russia can be brought to market in a timely manner.
“Only public policy and diplomacy can open those channels of investment. Only the private sector can take the investment risks. We have to work together combining forces and capabilities in the pursuit of a common objective.”
He said volatility and risk should be limited by extending the remit and capacity of the International energy agency to match the market of 2006, rather than the market of the mid 70s when the agency was set up.
“That means including major consumers such as China and India, and engaging those on the supply side including Russia and OPEC member states,” Butler said.
He added: “Finally, governments need to begin to put a price on carbon emissions and thereby to encourage consumers and the private sector to innovate and to develop technology to reduce those emissions.”
Butler said: “In the end, all steps to achieve energy security combine public policy and private action. The two are inextricably intertwined and interdependent.”
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