The Hindu Business Line : Energies of the G-8

With the price of crude oil climbing relentlessly, the leaders of the G-8, representing the world's largest industrialised nations, have made the statutory worry noises at their conclave in St. Petersburg. They need to respond more actively than that. Their countries guzzle more than half the world's oil even though they hold a much smaller fraction of the planet's people. To make matters more difficult, they, save for Russia, do not produce enough of their own (North America and Europe produce only half the oil they consume). That makes them huge importers of crude oil and products, and when the global oil price rises, as it has over the past couple of years, they do get pinched though not hard enough to make them do any more than squeal. That is because a $10 a barrel rise in the oil price will dent their GDP growth by just 0.5 percentage point. What worries them more is continuity in supply; such as when gas supplies to Western Europe were hit last winter after Russia turned the tap off over a price spat with Ukraine.

It was, therefore, only to be expected that the G-8 declaration on energy would dwell as much on securing continuity in supplies with "transparent, equitable, stable and effective legal and regulatory frameworks, including the obligation to uphold contracts," as on "enhancing energy efficiency and energy saving". There was little by way of a concrete commitment to lowering energy use. The G-8 declaration referred pertinently to the fact that two-thirds of the world's oil is consumed by the transportation sector, but said nothing that would chasten the energy-guzzling attitudes of vehicle users. Americans drive about four trillion miles a year; that is equivalent to travelling to the sun and back 60 times every day. Since most trips are done not in public transport, they cannot kick what the US President, Mr George Bush, called the "oil addiction" without the government doing anything to alter that nation's structural dependence on personal transport.

Given that tough challenge, the G-8 took an easier route, sending a homily to the rest of the world to save fuel or use it more efficiently. In its sights are countries such as China and India whose recent economic growth rates have surprised the Western world, and whose surging appetite for petroleum may throw the demand-supply balance out of kilter and send prices even higher. But such perceptions are unfair. China for all its size consumes but a third of the oil the US does and India barely a tenth. It would be a travesty to require the two to tighten their belts at this stage. Surely there is room for instituting greater efficiency in energy use even in these two countries and the need for reaching out to renewable sources. But for now, the onus is heavily on the developed world to ease up on the gas.