April 4, 2013 / 7:51 PM / 6 years ago

International Energy Agency to offer China room in strategic talks

LONDON (Reuters) - The International Energy Agency will invite China and other emerging economies to take part in key strategic talks, sources in the IEA said, in a bid to strengthen ties with non-members whose share in global oil demand has rapidly grown.

The initiative to form an “association” between the West’s energy watchdog, combining 28 industrialized economies, and non-members is aimed at “creating a closer alliance on energy security, environmental sustainability and data sharing,” a source at the Paris-based agency said.

China, the world’s top energy consumer, India, Russia, South Africa, Brazil and Indonesia are the main countries targeted by the initiative.

“For more than 10 years, the IEA has looked at ways in which to deepen its partnership with these countries,” IEA chief Maria Van der Hoeven told Reuters.

“‘Association’ is merely the latest term to describe this initiative, and I must stress that no decisions have been made - either within the IEA Secretariat, by the 28 IEA Member countries, or the non-member countries themselves,” she said.

The IEA includes only members of the Organisation for Economic Cooperation and Development, but not all OECD members are in the IEA.

As the brunt of oil demand growth shifted from developed countries to emerging economies over the past decade, the IEA has reached out to non-members to build a credible response to global energy crises, and ultimately to preserve its importance as an international agency.

IEA members account for under half of the world’s energy consumption today. China alone jumped from accounting for under 5 percent of total global oil demand in 1994 to nearly 12 percent in 2013.


The initiative includes a proposal that non-member countries be allowed to sit in meetings of the IEA governing board to jointly discuss issues such as energy security and strategic stock releases in response to supply, according to the sources.

Board meetings are held several times a year in Paris.

“What would the IEA get in return? Relevance,” said a source close to the agency. “We have to be engaged with countries like China and India.”

China, which is building up its strategic petroleum reserves, may want to tap into the West’s experience and knowledge on reserves management, some of the sources said.

But that might not be enough to persuade China to commit to providing energy trade data which it might think could jeopardize strategic and economic interests, others said.

“China might want to keep the data to themselves as they are the big player,” one source said, declining to be identified. “They want to keep their SPR management secret.”

The proposed association could also prove controversial among IEA members such as the United States and Japan who could be concerned that sensitive information would be released with no reciprocity.

Such difficulties became apparent late last year when the IEA invited several non-members to attend an emergency response exercise which dealt with several scenarios, including a supply shock in the wake of a leadership change in Venezuela.

While India, Russia and Brazil were represented by senior officials, China sent fairly junior representative, a participant said.

The emerging economies have meanwhile been invited to attend the IEA’s ministerial meeting in November, Van der Hoeven said. A similar meeting took place in 2011.

The IEA was founded by members of the Organization for Economic Cooperation and Development (OECD) following the 1973 oil shock to manage supply crises.


In recent years, the accuracy of the IEA data and its forecasts, published in closely watched monthly reports, has come under internal and external scrutiny as the focus on oil demand shifted away from IEA members.

While members of the developed economies regularly provide data about energy imports and exports, non-members report on a voluntary basis which often lacks transparency and accuracy.

“The data is our foundation,” a source said.

This represents a challenge to the IEA’s ability to provide an accurate and comprehensive picture of current and forecast oil stocks, with data on non-member countries, particularly China, often revised.

The IEA has in recent years sought to improve data sharing with non-members.

“For OECD countries we have well established monthly, quarterly and annual questionnaires. For non-OECD countries, we have either bilateral cooperation, memorandum of understanding, exchange of data, formal and informal contacts depending of the countries,” according to Jean-Yves Garnier, head of the IEA Energy Data Centre.

Additional reporting by Peg Mackey; Reporting by Ron Bousso; editing by David Sheppard and Jackie Frank

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