DETROIT – The Group of Eight major economies agreed Friday on the importance of flexible emergency responses to ensure a stable supply of energy, particularly in the light of tensions in the Middle East that threaten international energy markets.
“We agreed on the importance for net oil-importing countries of maintaining emergency oil stocks and of commitments to coordinate their use during significant disruptions,” the joint chairmen of the G8 energy ministers’ meeting said in a statement.
Differences appear to remain, however, over Japan’s proposal to coordinate the release of oil stockpiles if prices surge in response to fears of disruptions in the supply of oil.
Japanese officials said the G8 statement is an endorsement of the Japanese proposal, outlined by the Economy, Trade and Industry Minister Takeo Hiranuma at the meeting.
“Not to have the volatile situation (in the oil market) is advantageous to both producers and consumers,” Canadian Natural Resources Minister Herb Dhaliwal told a news conference.
But Dhaliwal, who jointly chaired the meeting with U.S. Energy Secretary Spencer Abraham, also said the Japanese proposal has not been endorsed by the G8 members.
Tokyo’s proposal was designed to pave the way for the release of national oil stockpiles to cope with supply stoppages and price surges.
The International Energy Agency’s general policy limits the release of national oil stockpiles by member states in the event of oil supply stoppages. The agency is a Paris-based organization of oil-consuming countries.
Hiranuma told reporters that the G8 ministers reaffirmed the importance of emergency preparedness as various risks remain, including tensions in the Middle East, for international energy markets.
The flexible use of oil stockpiles will “play the role of insurance” against oil crises and “serve as a safety net” against speculative movements, he said.
Hiranuma hinted to reporters that oil-consuming countries should take coordinated action if oil prices advance beyond $35 per barrel.
“The oil price level of between $20 and $25 is said to be comfortable both for oil producers and consumers. If it surges to $35 or approaches $40, it would result in a large burden on oil-consuming countries,” he told reporters.
If there is such a price surge, oil-consuming countries should first issue a message to the market that they are ready to release national oil stockpiles, Hiranuma said. He added that if the price surge develops into a crisis, they should then actually release oil stockpiles.
Abraham said the G8 ministers from Britain, Canada, France, Germany, Italy, Japan, Russia and the United States discussed “the need to develop our own strategic reserves.”
Pointing to U.S. efforts to top up its stockpiles of oil, Abraham urged other countries to be better prepared for “serious disruptions” by building up their oil reserves.
The G8 ministers also agreed on the importance of enhancing dialogue between oil-producing and oil-consuming countries to ensure stable energy supplies.
“We believe that a regular, open dialogue among energy producers and consumers can strengthen energy security,” the statement said.
As part of such efforts, Japan is to host a ministerial meeting of oil-exporting and importing countries in Osaka in September.
The G8 ministers agreed on the need to reduce dependency on oil and diversify energy sources to secure a stable, long-term energy supply and reduce emissions of heat-trapping greenhouse gases.
The statement said an appropriate mix of energy sources should be chosen by each G8 member at its own discretion. Japan and the U.S. are seeking to promote nuclear power, but Germany and Italy are not enthusiastic about nuclear energy.
“Most G8 members stress the value of nuclear energy in this context, providing optimal safety and waste handling are ensured,” the statement said.
The G8 ministers agreed to strengthen cooperation in developing new technologies to diversify energy sources and reduce the environmental impact of energy consumption.
The ministerial meeting followed a G8 Energy Forum session of business leaders and energy experts Thursday. The two-day event is the first G8 meeting to focus on energy since a Moscow meeting in 1998.
The Detroit meeting was one of several ministerial meetings leading up to the June G8 leaders’ summit in Kananaskis, in Canada’s Alberta Province.
Japan-U.S. steel talks
DETROIT (Kyodo) Economy, Trade and Industry Minister Takeo Hiranuma said Friday that Japan and the United States could hold talks by June 17 to address Japan’s demands for compensation for hefty U.S. tariffs on steel imports.
Speaking to reporters after a meeting of Group of Eight energy ministers in Detroit, Hiranuma reiterated, however, that Tokyo will have no choice but to retaliate with higher tariffs on some U.S. imports if Washington does not agree to pay compensation by that date.
June 17 is the deadline Japan has set for retaliatory action over the U.S. decision to impose three-year tariffs of up to 30 percent on an array of steel imports to help struggling U.S. steelmakers.
Under World Trade Organization rules, a country must take counteraction within 90 days after it files a complaint with the WTO against other countries’ trade practices.
Japan filed a complaint with the WTO on March 30 against the steel tariffs. If Tokyo decides to take such action, it must give notice one month in advance.
The higher U.S. tariffs, which went into effect March 20, have prompted Japan, the European Union and other steel-exporting countries to file complaints with the WTO.
Tokyo has demanded that Washington compensate by lowering tariffs on other Japanese exports under a WTO provision requiring a member government invoking its safeguard tariffs to endeavor to offer trade compensation.
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