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UNCLAS SECTION 01 OF 02 PARIS 000330 
 
DEPT PLEASE PASS TO DOE 
FROM USOECD 
 
TAGS: ECON EFIN ENRG EPET IEA OECD
SUBJECT:  The Standing Group for Global Energy Dialogue, February 
25-26, 2009 
 
¶1.  Summary:  The International Energy Agency's Standing Group for 
Global Energy Dialogue (SGD) met February 25-26 in Paris to discuss 
to review a range of outreach work to non-IEA countries, to discuss 
the activities of other energy organizations, and to discuss next 
steps for the IEA.  Topics included the Russia-Ukraine gas dispute, 
participation of Russia/China/India in the upcoming March Governing 
Board meeting, reporting on the Gas Exporting Countries Forum (also 
referred to as GOPEC), the Secretariat's proposal "Winds of Change" 
on options for new relations between the IEA and non-member 
countries; and outreach to new geographic regions including ASEAN, 
Central Asia and Latin America.  Finally, the group discussed the 
participation of Russia, China and India at the Ministerial to be 
held in the fall and possible outcomes and joint statements.  End 
Summary. 
 
¶2.  December London Producer-Consumer Meeting: The Secretariat gave 
a detailed read on the December London P/C meeting and the way 
forward.  The focus was on the Steering group expert Group dynamic, 
which is moving slowly.  The steering group is supposed to pick an 
expert group and the terms of reference for that group but it was 
still not clear how the steering group itself would work (discussion 
took place before circulation of email from IEFS and Mexico chair 
that added more clarification on the steering group). The objective 
of the expert group was to identify ways to make the producer 
consumer process operate more effectively and possibly develop new 
architecture.  The IEA Secretariat noted that the new IEFS Executive 
director wants to increase resources and expand IEFS activities. 
IEA s engagement and monitoring of IEF process was welcomed by 
delegates. 
 
¶3.  Russia-Ukraine Gas Dispute:  The Secretariat gave a detailed 
chronology of the gas crisis as it unfolded over the first half of 
January, as well as a review of events leading up to that dispute. 
With the benefit of some good luck and some good juggling and 
cooperation among consuming countries, Europe was able to cope with 
a few exceptions.  The crisis did reinforce the importance of key 
energy security mantras -- more storage, reduced internal barriers 
and diversification.  However, the clear message from Secretariat as 
well as the EU rep, who served as one of the EU monitors of gas 
flows in January, was that, notwithstanding the deal that got gas 
flowing again, this problem is far from over.  In fact, under terms 
of the deal, Ukraine must pay for monthly gas shipments by the March 
7, 2009.  There are serious concerns that Ukraine will be unable to 
make its March 7 payment.  Despite Ukraine's extreme predicament, 
there was no optimism that Ukraine is ready to undertake basic 
reforms necessary to enhance its energy security.  With Naftogaz on 
the verge of bankruptcy, possible outcomes include formation of a 
gas consortium, or something akin to the situation in Belarus, where 
Russia owns the pipelines.  (Currently, however, the pipeline 
infrastructure cannot be sold.)  For now, the question is whether 
Ukraine will make its March 7 payment to Gazprom.  Finally, the IEA 
and Polish delegates confirmed that gas shipments to Poland were 
still below the contracted amount. 
 
¶4.  Gas Exporting Countries Forum (GECF, though colloquially 
referred to as GOPEC):  The Secretariat's analysis of the recently 
established GECF to be based in Doha is that it has no direction or 
vocation at this point and will be operating more as a dialogue 
shop.  In the Secretariat's view, current market conditions and the 
fundamental differences in the gas market versus the global oil 
market, make it unlikely the GECF could engage in effective 
manipulation of markets along the lines of OPEC.  Delegates welcomed 
the IEA's active watching brief on the GECF but did not see a need 
for acute concern. 
 
¶5.  Ministerial and China, India, Russia Participation: 
Preparations for the October Ministerial are linked to how the IEA 
proceeds with outreach with its top three priority countries.  The 
Secretariat used this SGD meeting to throw out key questions that 
the March Governing Board (GB) meeting will have to address. 
Central questions are:  Should there be a communique with just the 
28 IEA members or should there be a 28 plus 3 communique?  How 
extensively and what process should be used for engaging the partner 
countries in the communique negotiation and finalizing the 
Ministerial agenda? 
 
¶6.  The GB will also be asked to take a position on three separate 
draft bilateral Joint Statements for possible negotiation and 
signature with each of the partners; the Secretariat circulated 
these as room documents during the meeting and they largely codify 
past and proposed future cooperation as well as idea of a notional 
commitment to attend at least one GB a year in future.  Finally the 
GB will be asked to give guidance on a proposal for announcement at 
Ministerial of the establishment of a training and development 
center at the October Ministerial. 
 
¶7.  SGD delegates were open to idea of pursuing a 28-plus communique 
but recognized that may involve more watering down than acceptable. 
Regarding the training center, US and Canada raised questions about 
analysis behind this proposal and noted that the GB would likely 
need much more info before it could make an informed decision. 
 
¶8.  Winds of Change:  In response to a request from last December's 
GB, the Secretariat presented a lengthy discussion paper on the 
Options for New Relations between the IEA and non-Member countries. 
There was widespread concern among delegates that this paper was 
creating impression that the IEA was in a rush toward precipitous 
decisions.  There was particular concern about the IEA broaching 
issue of a G-20 energy body.  The IEA agreed to try to eliminate 
this tone and make clear that our outreach ambitions will be limited 
by the political willingness of other parties to engage, and would 
specifically drop wording suggesting that IEA was engaged in 
developing options for new fora to address global energy issues. 
 
¶9.  Other Activities:  The Secretariat is continuing its increased 
focus on Southeast Asia and the Caspian brief remains very active 
with an IEA team heading to Turkmenistan in early April for 
discussions on natural gas.  Latin America is also another priority 
with the upcoming review of Chile and a push from Spain was backed 
by the US and Canada to make Latin America a special theme for a 
future SGD meeting. 
STONE