Toespraak van minister Kamp bij de opening van de Ministerial Conference on the International Energy Charter

Toespraak | 20-05-2015

Your Excellencies, ladies and gentlemen,

Welcome to The Hague, the city of peace and justice. It is an honour for my country to host the Energy Charter Conference here for the second time. This time with countries from five continents! Together we can create a powerful energy partnership. The conference logo symbolises this goal: it is made up of five honeycombs, which symbolise our five continents.

The honeycomb is a symbol in itself. It is the most efficient way of dividing a space into equal sections. This shape is used for example to make full use of the surface area of solar cells. The logo’s colours show the transition from traditional energy sources, in blue, by way of sustainable energy sources, in green, to the energy sources of the future, in yellow. And the opening between the honeycombs symbolises the open market in energy that the Charter aims to promote. So this logo sets out the tasks that lie ahead.

Ladies and gentlemen,

By signing the European Energy Charter in The Hague in 1991, ministers laid a foundation for energy cooperation. Their efforts have helped rebuild the former Soviet republics, contributed to Europe’s energy supply and encouraged East-West trade in oil, gas and electricity. Today and tomorrow, again in The Hague, your countries will have the opportunity to update the Charter and give it a global character. We can only effectively tackle the challenges we now face, if we make sure that the understandings between countries concerning investment and trade in energy are adapted to the times we live in.

In the 20-plus years since the adoption of the first Energy Charter, worldwide demand for energy has sharply increased. Gas consumption has risen from 2 trillion cubic metres a year to 3.5 trillion. Oil consumption has risen from 66 to 91 million barrels a day. Emerging economies account for a steadily growing share of this demand for energy.

The growing demand for energy in Asia and other emerging markets has led to more energy transport, not only between countries but increasingly between continents. In 1991 only the oil market was global. Today gas is also traded on the world market. In fact, the IEA expects interregional trade in gas to double between now and 2040.

So the energy market is increasingly a global market. From the shale gas revolution in the US and the gas crises in Ukraine, to the rise of African energy suppliers and unrest in the Middle East, regional events have an impact on global supply and demand. At the same time, because oil prices have been low for some time, investment in oil extraction is lagging behind, especially in high-cost areas like the deep sea. But the consequences of this trend will only become clear when demand for energy goes up again or new reserves need to be found to replace depleted oil fields. In this uncertain business climate, investors need the security of rules and an anchor of stability.

This security is urgently needed, because the IEA states that between now and 2035, some 24 trillion US dollars will be required just to keep the energy system producing at today’s levels. Not only because new sources are often hard to reach, like deep-water oil and gas, heavy oil and shale gas. But also because we need to replace power plants that are shutting down and equipment that is near the end of its operational life. On top of that, a massive 16 trillion US dollars in investment is needed to meet the growing demand for energy, for the most part with renewable energy. And the measures needed to use energy as efficiently as possible in the future will cost about 8 trillion US dollars. But these measures will save money and energy in the long run.

Of course, governments cannot fund all of this – a total of 48 trillion US dollars. The private sector is playing a growing role in energy exploration, generation and transport. So a large share of this investment has to come from companies and financial institutions. Our aim is to promote investor confidence in order to encourage energy and infrastructure development. We need to guarantee a healthy investment climate by upholding principles like legal certainty, a level playing field and a free market. By signing the Energy Charter Treaty governments equip themselves to create the enabling conditions for private sector investment in energy. Not only in fossil fuels, but also in green energy and energy networks. This will help the economy grow and meet society’s need for energy security.

The new Charter reflects the globalisation of the energy market by enlarging its own base. The members of the existing ‘91 Energy Charter were joined by representatives of 28 observer and outreach countries. The new text has been stripped of old geopolitical references and deals with future energy challenges, like making energy supplies more sustainable. It also focuses more on the 1.3 billion people who still lack access to electricity.

This afternoon we will adopt the text of the International Energy Charter and take a big step towards greater certainty in the investment climate. Several countries have announced that they will actually sign the Treaty today and tomorrow. This is the crucial next step in giving investors a true sense of confidence. I hope that more countries will follow their example in the coming months. We will of course involve the business community in our efforts. A unique feature of this conference is the presence of international energy companies, which is putting the theory of international energy partnerships into practice.

Your Excellencies, ladies and gentlemen,

Like food and water, energy is a basic human need. Access to modern energy is essential to provide people with lighting and heating. And so people can use it for heating, cooking, transport, proper healthcare and telecommunications services. Energy is, literally, the fuel of economic development. It is an alarming fact that today billions of people lack access to the most basic energy services. To create and sustain prosperity, we need stable, sustainable, reliable and affordable energy, with full access for every human being. Over the next few days, the countries represented here will commit themselves to achieving this goal.

If your country signs the Charter during the conference, your capital city will light up on the map before you. Gradually light will spread across the earth. This symbolises the desire of more and more countries for dependable agreements on energy trade and investment. But the map also shows that we still have a long way to go. Part of the world will stay in the dark. It’s up to us, and especially up to the countries whose continents are underrepresented here, to make sure that other countries see the light.

Thank you.