International Energy Agency (IEA)
International Energy Agency (IEA)
The International Energy Agency [link to IEA website] (IEA), is an autonomous intergovernmental agency linked to the Organisation for Economic Cooperation and Development (OECD). It was established in 1974 during the 1973-74 oil crisis, with its initial role being to co-ordinate response measures during oil supply emergencies. Since that time its mandate has broadened to cover energy security, economic development, and environmental protection. The IEA currently has 28 member countries.
The legal basis for the IEA is the Agreement on an International Energy Programme (IEP), which has been signed by all member countries. The IEP enables coordinated and collective action by requiring IEA countries to hold oil stocks equivalent to at least 90-days of net oil imports and to release stocks, restrain demand, switch to other fuels, increase domestic production and, if necessary, share available oil in a timely and coordinated manner in the event of a significant oil supply disruption.
The IEP has only been formally activated once – in 2005 in response to the disruption to oil supplies caused by Hurricane Katrina. However, during the 1991 Gulf War IEA members (including New Zealand) voluntarily implemented measured to restrain oil demand and boost supply. Both these actions are credited with swiftly calming a volatile oil market.
In addition to the IEP, the IEA has a diverse work programme. It maintains a sophisticated oil market information system which monitors oil events world-wide. It analyses global energy trends, develops policy recommendations, managed collaborative technology R&D projects (known as "Implementing Agreements"), collects statistics, engages with developing countries on energy matters and produces a wide range of publications. It has also completed a comprehensive work programme in relation to the G8 Gleneagles Plan of Action and is increasingly expanding its work in energy efficiency and "clean" energy technologies.
The main obligations of IEA membership are to:
- hold minimum oil stocks equivalent to 90 days of the previous year's imports;
- have demand response measures to reduce demand on the world oil market ready for quick implementation;
- provide a range of energy data to the IEA Secretariat on a regular basis; and
- participate in IEA activities at a reasonable level including In-Depth Reviews of member countries' energy policies and Emergency Response Reviews of their oil emergency response systems.
New Zealand Compliance with the 90-day Oil Stocks Obligation
In recent years, New Zealand's commercial inventories have been insufficient to meet the 90-day requirement. In order to meet its obligations, the Ministry of Economic Development makes up the shortfall by tendering for "ticket" contracts (an option to purchase stock in an IEA declared emergency) with major oil companies both at home and overseas. The New Zealand Government has entered into bilateral agreements with the Governments of Australia and the United Kingdom, and has concluded formal treaties with the Netherlands and Japan to enable stocks held in those countries to count towards New Zealand's IEA obligations.
Through the use of ticket contracts, New Zealand has been compliant with its obligation to hold stock covering 90-days of net import demand since 1 January 2007.
In 2009, 107,000 tonnes of crude oil and petrol are being held in Japan and the United Kingdom through such contracts. Depending on the timing of new crude oil production streams in New Zealand, no tender may be required for 2010 if increases in domestic oil production from the Tui, Maari and Pohokura fields mean no additional reserves are required.
New Zealand's current petroleum reserve contracts were entered into following tender processes in October 2008. All currently held contracts finish on 31 December 2009. The 2009 tickets cover stock held in Japan and the United Kingdom.
New Zealand Membership
New Zealand decided to join the IEA in 1975. Our membership was formalised with the passing of the International Energy Agreement Act 1976. The IEA is New Zealand's primary vehicle for international collaboration on energy. There are many benefits accruing to New Zealand from its IEA membership – both direct and indirect.
Direct benefits include: participation in the IEP which provides us with an "insurance policy" in the event of a major oil supply disruption; ready access to IEA publications, studies, statistics and policy advice; the opportunity for New Zealand scientists to participate actively in ongoing collaborative R&D projects or "Implementing Agreements" with major industrialised economies; and a five-yearly In-Depth Review of New Zealand's energy policies by an IEA expert panel (the last review was conducted in 2005/06).
Annual IEA publications such as the World Energy Outlook (WEO) and Energy Technology Perspectives (ETP) reinforce the importance of the IEA as New Zealand's primary international energy relationship. These publications are broadly recognised as world-leading authoritative sources of information and analysis on world energy trends and forecasts, and energy technology research and development. Credible information in these areas is of increasing importance for policy-makers in light of the strong link between the energy sector, security and climate change.
IEA membership also brings considerable advantages relative to other international energy organisations and regional multilateral initiatives. These include: a Treaty-level establishing agreement (the IEP); an extensive technical / research network which comprises 41 "implementing agreements" and includes all of the world's major economies; and access to a number of world class energy market and energy statistical analysis publications. The IEA is also the only dedicated general international energy forum – which means it covers most types of energy and aspects of energy policy.
The IEA is increasingly filling the role as the pre-eminent global energy forum, despite having an official membership comprised entirely of OECD member countries. This is because its extensive outreach programme enables non-OECD governments and industry to participate in IEA Implementing Agreements, Working Parties and other collaborative and information-sharing activities.
New Zealand Representation
The official New Zealand representative to the Governing Board of the IEA is technically the New Zealand Ambassador to Paris and the OECD. However, a specific delegation/authority was made to the Ministry of Economic Development's Paris-based Energy Advisor to represent New Zealand on the Governing Board in the Ambassador's place. While this delegation remains in place, the Ambassador has no direct involvement in IEA matters.
The official Wellington-based "alternate" representative on the IEA Governing Board is the Manager of the Energy and Environment Group at the Ministry of Economic Development (MED). A senior Wellington-based MED official attends Governing Board meetings 2-3 times per year. MED also employs a part-time Paris-based contractor (the "Energy Advisor") to attend most meetings of the Governing Board and its subsidiary Standing Committees on our behalf, and to report back on key outcomes. (This reduces the need for travel and maintains New Zealand's presence at the IEA).
Ministerial Meetings
Governing Board meetings at Ministerial level are held every two years. The next Ministerial-level meeting of the IEA Governing Board will take place at the IEA headquarters in Paris on 14-15 October 2009.
The IEA Ministerial provides Ministers with the opportunity of reviewing the world energy scene, the IEA's policies, and a forum for exchanging views. New Zealand is usually represented at these meetings at Ministerial level.
Energy Technology Collaboration
The IEA has five Standing Committees which report directly to the Governing Board. One of these is the Committee on Energy Research and Technology (CERT). The IEA's Energy Technology Collaboration Programme operates under the guidance of the CERT, which has in turn established four expert bodies or "Working Parties' to assist with this task. These are:
- the Working Party on Renewable Energy Technologies (REWP);
- the Working Party on Energy End-Use Technologies (EUWP);
- the Working Party on Fossile Fuels (WPFF); and
- the Fustion Power Co-ordinating Committee.
New Zealand participates in the first two of these IEA Working Parties, plus a separate Energy Efficiency Working Party (EEWP), on a semi-regular basis. We are usually represented on these IEA Working Parties by experts from the Energy Efficiency and Conservation Authority (EECA).
IEA Implementing Agreements
The IEA provides a framework for more than 40 international collaborative energy research, development and demonstration projects known as "Implementing Agreements" (IAs) that report to CERT through the four CERT Working Parties. New Zealand is an active member of eight Implementing Agreements.
The Ministry of Economic Development generally takes an arms-length "facilitative" approach with IAs, and New Zealand is usually represented by a "Contracting Party" (under MED auspices) which generally represents a consortium of interested stakeholders. This approach ensures active industry engagement and ensures the work undertaken within the IA is relevant to New Zealand. IA Executive Committee (ExCo) meetings and other relevant meetings are attended by a designated "Operating Agent" who is the lead focal point / contact for the Contracting Party.
The IEA Implementing Agreements in which New Zealand is an active member are as follows:*
- Greenhouse Gas R&D Programme
- Bioenergy
- Geothermal
- Solar Heating and Cooling
- Ocean Energy Systems
- Hydrogen
- Building and Community Systems
- Demand-Side Management
Additional information on the work New Zealand is engaged in on each of these Implementing Agreements can be found by following the links in each of the IA headings above to a dedicated MED web page for each. (Note: pages under development).
Back to Top