International Energy Agency (Hansard, 3 June 1980)

§ Mr. David Howell

The governing board of the International Energy Agency met at ministerial level on 22 May under the chairmanship of the Federal German Minister for Economic Affairs, Count Lambsdorff. I represented the United Kingdom.

Ministers concentrated on the medium and long term measures needed to reduce the dependence of IEA countries 677W on imported oil and on short term instruments to limit the damaging economic effects of large short term movements in the oil market. They noted a secretariat analysis of areas where energy policies could be strengthened in individual IEA countries and agreed that each Minister would give weight to this analysis in forming national energy policy. Particular emphasis was given to the role of proper energy pricing policies and the need to develop coal and nuclear power. Ministers agreed that results actually achieved by IEA countries as a group for net oil imports should substantially under-shoot the existing 1985 group objectives (26.2 mbd as oil imports including bunkers). The secretariat estimates the potential under-shoot at around 4 mbd. Efforts to reduce oil imports will be continued beyond 1985. It is expected that, as a result, the ratio between the rate of increase of energy consumption and the rate of economic growth for IEA countries as a group over the coming decade should be reduced to about 0.6 per cent. and the share of oil in total energy demand to about 40 per cent. by 1990.

Ministers agreed that if at any time tight market conditions appear imminent they will meet at short notice and that IEA countries would take effective short term action to restrain demand. In such a situation Ministers will take a decision on the use of individual oil import ceilings as a means of self-imposed restraint. I made it clear that that decision could only be taken in the light of the circumstances at the time. Ministers also agreed on a system for consultation on oil stock policies.

The political importance of energy research, development and demonstration was recognised. The meeting endorsed the report of the international energy technology group set up following the Tokyo summit and agreed to use the R, D and D strategy which has been developed by the IEA as a guide for settling national priorities.

The IEA countries reaffirmed their willingness to discuss common problems with the oil-producing countries and they accepted the need for further action by the international community to help developing countries develop their indigenous energy resources.

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Her Majesty's Government believe that effective implementation of the conclusions of the IEA meeting, particularly those relating to pricing policy, is essential to restrain growing demand for oil to a level which can be met from the supplies likely to be available. Implementation will require courageous and sometimes unpopular action from all member Governments. Her Majesty's Government will approach the IEA conclusions in this spirit and hope that all other member Governments will do the same.

I am placing a copy of the governing board's communiqué in the Library of the House.