Day 2 Emergency Response Policy - International Energy Agency
Day 2 Emergency Response Policy - International Energy Agency
Day 2 Emergency Response Policy - International Energy Agency
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IEA <strong>Emergency</strong> <strong>Response</strong> Policies and Objectives<br />
Andrew Robertson<br />
<strong>Emergency</strong> <strong>Policy</strong> Division, IEA<br />
IEA Training Week<br />
Paris, 9 April 2013<br />
© OECD/IEA 2013
IEA Oil Supply Security<br />
2<br />
© OECD/IEA 2013
Impetus to Establish the IEA<br />
1973/74 oil crisis<br />
•Avoid competition for limited supplies<br />
• “Go-it-alone”, uncoordinated policy ineffective<br />
•Coordinated action<br />
• Mechanism for response<br />
•Safety net<br />
• <strong>Emergency</strong> reserves ≥90 days of net oil imports<br />
• Demand restraint measures<br />
3<br />
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4<br />
Member Government<br />
Responsibilities<br />
Legislation to ensure participation in IEA decisions with<br />
appropriate emergency measures<br />
National <strong>Emergency</strong> Strategy Organisation (NESO)<br />
• Co-ordinate emergency operations<br />
• Interface with domestic oil industry<br />
• Interface with IEA emergency operations<br />
Data collection<br />
• Monthly Oil Statistics<br />
• <strong>Emergency</strong> questionnaire<br />
© OECD/IEA 2013
<strong>Emergency</strong> <strong>Response</strong> Measures<br />
Stockdraw<br />
Supply Side<br />
Demand Side<br />
Production<br />
Surge<br />
Demand<br />
Restraint<br />
Fuel<br />
Switching<br />
5<br />
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Stockholding Options<br />
Industry stocks<br />
• Compulsory stocks and commercial stocks held<br />
by companies<br />
Public stocks<br />
• Government stocks<br />
Financed with central government budget,<br />
Held exclusively for emergency purposes<br />
or<br />
• <strong>Agency</strong> stocks<br />
Maintained for emergency purposes<br />
Held/controlled by public bodies or agencies<br />
6<br />
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Stockholding in IEA Regions<br />
7<br />
© OECD/IEA 2013
8<br />
Key Elements of IEA <strong>Response</strong><br />
Continuous assessment of oil market<br />
• Monthly Oil Market Report (OMR)<br />
• Size of disruption; OPEC spare capacity ; stocks in OECD<br />
• Necessity of IEA action, impact on market<br />
Rapid decision making framework<br />
• Need for fast, decisive response, market reaction immediate<br />
• Delayed, weak or uncoordinated response can cause market confusion<br />
and exacerbate the problem<br />
Flexibility in response measures<br />
• Stocks are key, but other measures possible<br />
• Make oil available to the market, not directing – market allocates oil<br />
Communication<br />
• Dialogue with Members, key NMCs and OPEC<br />
• Media strategy to deal with markets<br />
© OECD/IEA 2013
IEA <strong>Emergency</strong> <strong>Response</strong> System<br />
2002- Initial Contingency <strong>Response</strong> Plan (ICRP)<br />
Standing procedure for<br />
• Prompt, first reaction for 30 days<br />
• Provides time to consider follow-up action<br />
• Broad consultation<br />
• Unanimous decision<br />
Executive Director can take initiative<br />
• GB members decide<br />
• No meeting required<br />
Attributes country shares of total response, based on normal<br />
oil consumption<br />
9<br />
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Strengthening the <strong>Emergency</strong><br />
<strong>Response</strong> Systems<br />
<strong>Emergency</strong> <strong>Response</strong> Reviews (ERR)<br />
• Country peer reviews on emergency preparedness<br />
• Checks procedures and institutional arrangements<br />
• Contributes to identify and improve the weak points of<br />
response system<br />
<strong>Emergency</strong> <strong>Response</strong> Exercises (ERE)<br />
• Test the processes for: decision making, communicating,<br />
hypothetical release<br />
Broadening of energy security concept<br />
• <strong>Emergency</strong> policies for natural gas<br />
• Electricity security issues<br />
10<br />
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What to Check during<br />
<strong>Emergency</strong> <strong>Response</strong> Reviews (ERR)<br />
Refining<br />
Capacity<br />
Supply<br />
&<br />
Demand<br />
Domestic<br />
Oil & Gas<br />
Markets<br />
Stockholding<br />
Regime ,<br />
Legislation &<br />
Financing<br />
<strong>Emergency</strong><br />
Oil Reserves<br />
Location &<br />
Quality of Oil<br />
Stock<br />
Drawdown<br />
Procedures<br />
11<br />
Infrastructure<br />
(Storage capacity,<br />
pipelines, ports)<br />
<strong>Emergency</strong><br />
<strong>Response</strong><br />
<strong>Policy</strong> &<br />
Legislation<br />
<strong>Policy</strong> &<br />
Organisation<br />
<strong>Emergency</strong><br />
<strong>Response</strong><br />
Organisation<br />
(NESO)<br />
ERR<br />
Data<br />
System<br />
Natural Gas<br />
<strong>Emergency</strong><br />
<strong>Policy</strong><br />
Stockholding<br />
Regime &<br />
Legislation<br />
Other<br />
<strong>Response</strong><br />
Measures<br />
(Demand<br />
Restraint, etc.)<br />
<strong>Emergency</strong><br />
<strong>Response</strong><br />
<strong>Policy</strong> &<br />
Legislation<br />
© OECD/IEA 2013
<strong>Emergency</strong> <strong>Response</strong> Exercise<br />
(ERE)<br />
• Biannual exercises continued (ERE6 took place in Paris in<br />
November 2012)<br />
• Specific workshops for new or complex issues/policy<br />
• Rollout of EREs to key Non-Member Countries<br />
12<br />
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Natural gas response policy<br />
Oil response measures not directly transferrable<br />
Gas stocks are an important buffer in a crisis<br />
• However… they are expensive, and not all countries<br />
have suitable geology<br />
Carefully crafted demand side policies essential<br />
Fuel switchability<br />
• Alternative sources, such as oil stocks<br />
• <strong>Emergency</strong> oil reserves could play a role<br />
13<br />
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1974 – the IEA Treaty<br />
Oil market in the early-70s<br />
14<br />
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Question<br />
What is the share of OECD in global oil<br />
demand today?<br />
15<br />
© OECD/IEA 2013
Growing Importance of Consuming<br />
Countries outside of IEA Membership…<br />
Non-OECD<br />
Total<br />
49%<br />
World Oil Demand in 2011<br />
OECD Total<br />
51%<br />
89.1 million barrels per day<br />
16<br />
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Mtoe<br />
Emerging economies continue<br />
to drive global energy demand<br />
Growth in primary energy demand in the New Policies Scenario<br />
4 500<br />
4 000<br />
3 500<br />
3 000<br />
2 500<br />
2 000<br />
1 500<br />
1 000<br />
500<br />
0<br />
2010 2015 2020 2025 2030 2035<br />
China<br />
India<br />
Other developing Asia<br />
Russia<br />
Middle East<br />
Rest of world<br />
OECD<br />
17<br />
Global energy demand increases by one-third from 2010 to 2035,<br />
with China & India accounting for 50% of the growth<br />
© OECD/IEA 2013
Question<br />
What is the share of OPEC in global oil<br />
production today?<br />
18<br />
© OECD/IEA 2013
Global Oil Production<br />
World Oil Supply in 2035<br />
OECD<br />
19%<br />
World Oil Supply in 2011<br />
OPEC<br />
41%<br />
OECD<br />
21%<br />
OPEC<br />
51%<br />
96.4 mb/d<br />
non-<br />
OPEC/non-<br />
OECD<br />
30%<br />
88.5 mb/d<br />
non-<br />
OPEC/non-<br />
OECD<br />
38%<br />
19<br />
© OECD/IEA 2013
<strong>International</strong> trade in oil to continue to<br />
grow<br />
20<br />
© OECD/IEA 2013
mb/d<br />
Changing oil import needs are set to<br />
shift concerns about oil security<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
Net imports of oil in the New Policies Scenario<br />
2000<br />
2010<br />
2035<br />
China India European<br />
Union<br />
United<br />
States<br />
Japan<br />
21<br />
US oil imports drop due to rising domestic output & improved transport efficiency: EU imports<br />
overtake those of the US around 2015; China becomes the largest importer around 2020<br />
© OECD/IEA 2013
days of world oil demand cover<br />
The need for cooperation during oil supply<br />
disruptions<br />
70<br />
70%<br />
60<br />
60%<br />
50<br />
50%<br />
40<br />
40%<br />
30<br />
30%<br />
20<br />
20%<br />
10<br />
10%<br />
-<br />
0%<br />
IEA stocks in terms of global oil demand with China with India with ASEAN Share of non-OECD in global oil demand<br />
Growing share of non-OECD oil demand results in declining<br />
global demand cover from IEA emergency oil stocks<br />
22<br />
© OECD/IEA 2013
Concluding Remarks<br />
IEA emergency response system is more than just<br />
90 days of stocks<br />
• NESO structures, response mechanisms in place, data<br />
reporting obligations<br />
• Continuous market assessment, decision making<br />
framework, flexibility in response measures<br />
Continual strengthening of response measures<br />
• <strong>Emergency</strong> <strong>Response</strong> Reviews and Exercises<br />
• Broadening of emergency policy to gas and electricity<br />
Extending emergency response policies beyond IEA<br />
member countries<br />
23<br />
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Contact details:<br />
Web site:<br />
andrew.robertson@iea.org<br />
epd@iea.org<br />
www.iea.org<br />
24<br />
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