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IEA Considering Options to Enhance Natural Gas Supply Security as Exporting Expands

With new challenges and opportunities emerging as natural gas markets become more global, the International Energy Agency (IEA) this week said it plans to develop potential options to enhance worldwide supply security as liquefied natural gas (LNG) exports overtake pipeline deliveries.

The IEA's governing board, which oversees the world's energy watchdog, was chaired by U.S. Secretary of Energy Ernest J. Moniz. The conference precedes the 21st annual United Nations Framework Convention on Climate Change, known as COP-21, which also is to meet in Paris beginning later this month.

Energy security is the "foundation of the IEA's mandate," ministers noted. They agreed on the need to promote the secure, affordable and efficient supply of energy. They also welcomed diversifying energy supply and the "safe and sustainable development" of energy resources, new transit routes, renewable energy and low-carbon technologies including nuclear energy.

Incoming executive director Fatih Birol laid out three main pillars to modernize IEA in a "transformed global energy landscape," the first of which is to expand the agency to emerging economies. Mexico, for instance, this week announced its intention to pursue IEA membership.

As the second pillar, Birol proposed broadening IEA's core mandate of energy security, "in part to take into account the continued evolution of global oil markets but also to factor in the rising role of liquefied natural gas in the global energy trade."

The IEA's World Energy Outlook 2015 was issued earlier this month; it provides a forecast to 2040 about the supply/demand picture for all energy sources. It said the global gas trade should increase more rapidly than pipeline gas over the next 25 years, with U.S. LNG exports helping to diversify the market and make trading more flexible (see Daily GPINov. 11). Patterns of trade are seen changing significantly as the United States becomes a major LNG player.

The third pillar involves transforming the agency into a global hub for clean energy technologies and energy efficiency. Ministers voiced support for strengthening the role of the IEA's technology collaboration programs, an existing network of 6,000 energy technology experts worldwide.

"Given that the energy sector contributes some two-thirds of global greenhouse gas emissions, ministers’ discussions focused on the critical role that energy sector policies and energy innovation can play to successfully combat climate change," IEA said. Deliberations resulted adopting a statement emphasizing the "close relationship between energy and climate change" and the need to promote policies and innovation to transition to a clean energy economy.

Among other things, ministers said there were five opportunities that countries could adopt in the short run to advance the date by which global emissions would peak, putting emphasis on energy efficiency, renewable energy, phasing-out "inefficient fossil fuel subsidies," phasing-out of "least-efficient" coal-fired generation and methane emissions reductions.

Twenty-nine member countries participated in this year's ministerial, as well as 30 energy executives. Ministers also joined to support France following the terrorist attack in Paris last week.

"This week we joined together in solidarity from all corners of the globe following the terrorist attacks perpetrated in Paris," Birol said as the meeting concluded on Wednesday. "We felt it was necessary to send a powerful message of support -- to France and the world -- especially in the lead-up to the very important COP-21 climate negotiations that will begin here in less than two weeks."

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