Minister: Industry must commit to stabilizing global energy markets

Italian Minister of Industry Enrico Letta Thursday called on the world's industrialized nations to show a firmer hand in helping to stabilize global energy markets by developing technologies that would both aid in the expansion of energy supply and the reduction of demand. Letta said the onus rested with developed countries because they were better able to absorb the impact of oscillations in crude prices, which occurred even during periods of general economic stability.


Darius V. Snieckus
OGJ Online


RAVENNA, ITALY, Mar. 29�Italian Minister of Industry Enrico Letta Thursday called on the world's industrialized nations to show a firmer hand in helping to stabilize global energy markets by developing technologies that would both aid in the expansion of energy supply and the reduction of demand.

Letta, speaking at the Offshore Mediterranean Conference, said the onus rested with developed countries because they were better able to absorb the impact of oscillations in crude prices, which occurred even during periods of general economic stability.

"The stability of energy markets is a condition which is unfortunately difficult to achieve and especially to maintain," he said. "Even during years that were not particularly eventful, the oscillations in oil prices have usually been higher than 50%.

"Industrialized countries are usually capable of withstanding the impact of such shocks, whereas the most serious and destabilizing consequences are felt by developing countries," said Letta.

Beyond a responsibility linked to industrialized nations' high energy consumption levels, he said, it was also in the best interest of these countries to work toward price stability to counter the worldwide knock-on effects of "economic losses, growth deficits, and political instability" in developing countries.

Industrialized nations' capacity to "develop the technologies aimed at reducing oil price oscillations or diversifying the actions (of these variations in price) would be a boon to the drive for energy market stability."

Market stability, he stressed, was not a byword for minimum prices. "The prices of energy resources should be sufficiently stable as to favor (both) the development of industrialized countries, and to give developing countries a chance to access different energy sources.

"These prices would take into account the need to invest more in research and the pursuit of more efficient transformation processes," he added.

Letta said it was essential to drive ahead those technologies that would tap "new energy sources at competitive prices," as well as cutting the cost of producing and using oil and gas.

He stressed that the oil and gas industry�given the "clear energy-environment connection" marked out by the Kyoto Conference�had a responsibility to keep its shoulder to the wheel in advancing ecologically sustainable growth and development models.

"In Kyoto the choice was finalized to combine energy and environment," he noted, "not in order to limit development but to make sure the development is compatible with the environment. At this stage we need to support the opportunity which modern technology offers us to correctly combine energy and the environment."

He pointed to the energy industry's success in managing a "dramatic" reduction in hydrocarbon extraction costs over the last decade, as well as the 40-60% boost it had engineered in the performance by combined-cycle power plants, as standards for future progress by the sector.

For the energy industry to achieve the high level of sustainable development that would accommodate changing market conditions, along with stricter health, safety, and environment requirements, it must sharpen its focus on fashions a new strategy, said Letta.

"We need to design a strategy based on four essential aims: an increase in the efficiency of the global energy networks, a guarantee of secure supply, the diversification of future choices in the energy sector, and a strengthening of international cooperation with respect to energy questions on a global level," he said.

"It is necessary to introduce a radical technology development program aimed at ensuring a deeply-rooted cooperation in the field," said Letta, "thus allowing consumer and producer countries to combine their development needs with those related to the environment in which it is fit for us to live."

He added that in the coming years the Italian government was "willing to make a strong, long-term commitment (to achieving) a more advanced level of compatibility between development and the environment" in the Mediterranean basin.

Contact: Darius V. Snieckus at dsnieckus@ogjonline.com

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