- The Washington Times - Thursday, March 16, 2006

MOSCOW (AP) — Energy ministers from the world’s leading industrialized nations called yesterday for major new investments and the development of nuclear power as high oil prices and uncertainty about supplies weigh on the global economy.

The ministers from the Group of Eight nations, meeting in the Russian capital to discuss global energy security, said significant investments would be needed in the production, transportation and processing of resources and urged policies to encourage this.

“We recognize that to attract investment it is essential for countries to have open and favorable investment regimes,” they stated, “including stable and predictable regulations, clear tax laws and efficient administration procedures, as well as fair and reciprocal access to markets along the energy value chain.”

Though they conceded that fossil fuels “will remain the basis of the world energy industry for at least the first half of the 21st century,” the ministers urged a diversification of energy sources, suppliers, consumers, routes and delivery methods as a means of reducing energy security risks. They noted in particular the importance of nuclear energy.

“For those countries that wish, wide-scale development of safe and secure nuclear energy is crucial for long-term, environmentally sustainable diversification of energy supply,” they said in a statement released by Russia’s Ministry of Industry and Energy.

“We are hopeful for a very substantial worldwide rebirth of the nuclear power industry, which appears to be taking place in various parts of the world,” U.S. Energy Secretary Samuel W. Bodman said at a press conference.

The ministers called for increasing energy supplies to less-developed countries, and said the development of low-carbon technologies will be “crucial” to long-term global environmental sustainability.

Britain’s trade and industry minister, Alan Johnson, emphasized there was no simple solution to easing world’s dependence on hydrocarbons — with fossil fuels likely to continue to provide 80 percent of global energy needs in the first half of this century.

But he said new technologies could reduce the environmental effects.

The ministers also said better communication between energy producers, transit providers and consumer countries was necessary.

Russia is the world’s No. 1 gas producer and the biggest oil exporter after Saudi Arabia, but Moscow’s recent behavior has raised concern among Western oil companies about investing in Russia and European Union worries about the dependability of supplies from state-controlled monopoly Gazprom.

Russian President Vladimir Putin promised that in the next few months Russia’s parliament will pass a key bill regulating taxes on mineral extraction along with new legislation on using subsoil resources, including with the participation of the foreign capital.

The changes were “aimed at making energy business in Russia as transparent and predictable as possible,” Mr. Putin said.

Russian Energy Minister Viktor Khristenko said yesterday that $17 trillion needed to be invested by 2030 “to create an effective global energy system that is resilient to shocks.”

Stable legislation, a clear tax regime and flexible administration are key to realizing this goal, Mr. Khristenko said.

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