Title: Department of Resources, Energy and Tourism APEC Energy Trade and Investment Study
1Department of Resources,Energy and TourismAPEC
Energy Trade and Investment Study
2Part 1 overview and key conclusions
3Agenda
- Introduction
- APECs challenges
- Scope and methodology
- Barriers to trade and investment
- Role of international organisations
- Next steps
- Conclusion
4Introduction and Overview
- Discuss the implications of the APEC Energy Trade
and Investment Study and to reach a shared
understanding of realistic actions that member
economies can undertake to improve energy
security and sustainable development - Move from dialogue to realistic actions
- Working with APEC
- Working within individual economies
- Working in concert other international
organisations - Development of Draft APEC Energy Trade and
Investment preamble and Action Plan
5APECs continuing prosperity is dependent on
developing new sources of secure and
environmentally sustainable energy
- APEC is host to the worlds top four energy
consumers and three of the top four energy
exporters - By 2030 APEC will
- Move from a net exporter to a net importer of
LNG, coal and oil - Require US6 trillion of new energy investment
- At a time of uncertainty surrounding
- Climate Change
- Declining supplies
- Global financial uncertainty
6APEC is a net importer of oil, but has
substantial reserves of gas, coal and uranium
the imbalances will grow as demand expands and
supplies fall. By 2030 indigenous production will
equal only 75 of demand
Net imports of primary energy supply by energy
type for 2005 (ktoe)
Source APEC Energy Trade and Investment Study
7Energy security remains a critical issue for APEC
economies
- Energy security has moved beyond simple
availability of oil to encompass all energy
sources and a broad range of objectives - Security of supply
- Economic security affordable energy
- Socio-economic security improved access to
rural and poor areas - Environmental security reduction in pollution
and greenhouse emissions
As a diverse region comprising economies with
vastly differing reserves, including major net
importers and net exporters, it is likely that
energy security can be achieved more easily in
cooperation than by individual economies in
isolation APEC Energy Trade and Investment
Study, p11
8 A key component of improving energy security is
by identifying, prioritising and removing
barriers to energy trade and investment
- Objectives, Methodology and Scope
- Its aim is to identify and prioritise border and
behind-the-border barriers to energy trade and
investment across APEC. - A mixture of literature reviews, stakeholder
consultation and a prioritisation of the barriers - Barriers were identified at a thematic level i.e.
non-energy or economy specific, large-medium
sized infrastructure and focussed on commercial
energy technologies
9A prioritisation may be able to usefully inform
decisions by APEC leaders in terms of focused
action and dedication of resources to promote
energy investment and trade
10Role of international organisations differ in
their geographic coverage of APEC economies,
their degree of focus on energy versus other
sectors, and their key roles and activities
- The roles and key activities of key international
organisations working across APEC economies
generally comprise - Facilitating and encouraging communication
between Governments - Sharing ideas and best practice on regulation
- Sharing ideas and best practice on technical
matters - Conducting research and analysis
- Highlighting barriers and problems
- Facilitating private sector partnership
- Financing or leveraging finance of others
- Hold member economies accountable for action
The role of APEC going forward is to work with
other organisations on developing focussed
concrete actions to promote trade and investment
11How study can inform APEC economies
The uneven resource distribution within APEC
means that international cooperation is required
to sustain primary energy supply through trade
but also creates a unique opportunity to work
together to support the achievement of energy
objectives for all economies. APEC Energy Trade
and Investment Study,
12Areas for potential follow up
- Identification of barriers for commercialisation
of new technologies, renewable energy and
distributed energy - Studying the barriers to energy trade and
investment at an energy type-specific level in
order to facilitate appropriately targeted action
to address them. - Economies may redefine prioritisation of barriers
in the context of their own circumstances and
level of economic development to ensure it is
appropriate. - Indentify areas where benefits are dependent on
international collaboration e.g. technical
standards, climate change or cross border
infrastructure
13Conclusions Potential Role for APEC
- The Study has highlighted the barriers to energy
trade and investment which stand in the way of
improving energy security in the region. - Going forward APEC may seek to
- Continue to support the Asia Pacific region in
the role and activities of other international
organisations - Address areas which it considers are not being
accorded priority by these organisations - Assist member economies in developing best
practice regulation and improving collaboration
in addressing cross-border barriers - Developing focused concrete actions to promote
trade and investment
14Comments
15Part 2 priority barriers and prioritisation
analysis
16Prioritisation multicriteria analysis
- Useful where factors cannot be satisfactorily
quantified and / or valued but are important to
the assessment. - Involves the assessment of key elements against a
set of criteria that include both quantifiable
and non-quantifiable factors - Allows barriers to be assessed fully on the basis
of all driving factors
17Prioritisation multicriteria analysis
- Stakeholder conversations revealed
- Differences by energy type
- Difference by prevalence across economies
- Difference by strength of barrier to market entry
- Other factors influencing priority
- Effect on investment productivity
- Economic impact of removal
18Prioritisation multicriteria analysis
- Scoring of high / med / low based on
understanding through literature review and
stakeholder consultation - Scenario analysis with different criteria
weighting to test outcomes - Barrier priority categories emerged
19Prioritisation multicriteria analysis
20High priority barriers policy uncertainty
- Relates to unpredictable regulations or unclear
policy direction - Increases risk for investors and therefore deters
investment - Climate change policy uncertainty raised as a
particular issue for investment
21High priority barriers lack of competition and
anti-competitive behaviour
- Where the regulatory and institutional
environment does not enable overseas investors to
access the same opportunities as State owned
enterprises - Where incumbent firms attempt to limit
competition in the market - Includes
- discriminatory treatment between overseas and
domestic investors - lack of price deregulation
- subsidisation of domestic energy sources
22High /medium priority barriers weak legal
systems
- Where there are
- regulatory gaps
- poor protection of property rights
- unclear regulations and contract enforcement
difficulties - Highlighted as economy specific
- Increases investor risk
23High /medium priority barriers inadequate
infrastructure
- Increase the time and cost of transporting energy
from sources of supply to areas of demand - Discourages foreign investment in generation
capacity and international trade - Where clean energy technologies have particular
infrastructure needs, lack of such infrastructure
can inhibit the growth - Some parts of the market should remain regulated
but returns should reflect the WACC - Highlighted by stakeholders as significant
barrier across net importing / exporting
economies, particularly within developing
economies, and important for most energy types.
24High /medium priority barriers limits on
foreign ownership of energy businesses
- Explicit rules for accepting or rejecting
investment proposals - Some reforms but remains common across APEC
economies for different forms of energy - Imposed through foreign investment law or energy
regulation - Restrictions should balance protection domestic
interest with - benefit from liberalised energy trade and
investment across the region - benefit from access to energy (e.g. in supporting
the activities of productive industries)
25High /medium priority barriers screening or
approval requirements for foreign investment in
energy businesses
- Most economies have foreign investment review
process - Barrier created where
- foreign investment screening and approval process
lacks transparency or predictability - restrictions imposed are disproportionate to
domestic interest or security requirements - screening and approval process is considered
complex and lengthy
26Thankyou