APEC energy ministers urge the use of strategic oil stocks for emergencies

Energy ministers from the Asia-Pacific Economic Cooperation forum Wednesday called for a setting up of strategic oil stocks and a cut in subsidies for petroleum products, in response to high oil prices, agency reported.

Worries over oil supply disruptions have been keeping crude oil futures prices at lofty levels.

"Effective responses to oil supply disruptions may include establishing strategic oil stocks, developing emergency preparedness plans, and information sharing and real-time communication," energy chiefs from 21 Pacific rim nations attending the 7th APEC Energy Ministers' Meeting said in a communique.

Reducing subsidies for petroleum products, where they exist, may enhance the efficiency with which such products are used, the ministers said.

Talks among the ministers have ranged from discussions on ways to enhance dialogue on energy issues among oil-consuming member-countries, to energy efficiency.

The energy ministers met for the second straight year, concerned about the impact of soaring oil prices on APEC economies while significant demand growth and supply constraints persist, according to the communique.

The APEC Energy Ministers' Meeting is usually held every other year; the last one was held in the Philippines in 2004.

Amid high oil prices, and to reduce oil dependency of APEC economies, "we encourage APEC economies to remove market impediments to oil exploration and development, and we direct the (APEC's) Energy Working Group to support capacity building efforts in this regard," the ministers said.

They also urged APEC economies to facilitate investment in new, and more effective utilization of existing, downstream oil infrastructure.

On downstream and upstream investments, "investment is essential if APEC economies are to increase supply and improve demand-side efficiency to meet our growing energy needs," according to the communique.

The forum estimated that financing of $5.3 trillion-$6.7 trillion in infrastructure is required over the next three decades.

"It is imperative that governments, the private sector and financial institutions work together to create conditions to facilitate investment in the full range of energy projects, including energy infrastructure, renewable energy and energy efficiency."

Also as part of efforts to bring stability to oil prices, the APEC ministers said they support "APEC efforts to remove barriers to oil trade in the APEC region... and direct the EWG (Energy Working Group) to support initiatives regarding the freer trade of oil products."

They also called for development and uptake of energy technologies that will help APEC economies bring supply and demand into balance through increased production, diversification and efficiency.

As part of that technological development, energy ministers said they recognize the growing importance of nuclear energy in the APEC energy mix.

"We encourage interested APEC economies to join the ad hoc group on nuclear energy, and to progress activities identified in the nuclear framework endorsed at (the previous meeting), to support nuclear power with ensuring optimal safety, security, seismic health and waste handling, including trans-border effects," according to the communique.

APEC, formed in 1989, consists of Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, the U.S. and Vietnam. (*)