An Outcome from Two International Seminars Held in
Caracas, Venezuela (June 2000)
Under the co-hosting of the Venezuelan Center for OPEC
Studies and the Presidential Preparatory Commission of The II OPEC SummitandVancouver, Canada (Aug 2000)
Under the co-hosting of Blue Energy Canada and Venture Resources

 Drafted by
Hazel Henderson, Chair, Vancouver Seminar
Frank Bracho, Chair, Caracas Seminar

Preamble

 The enclosed statement stems from the cumulative deliberations and results of two international seminars held, respectively, in Caracas and Vancouver, in the summer of 2000, on the issue of New World Trends and The Future of Oil and Energy. The list of participants of both seminars is attached. The two meetings flowed from a Venezuelan concern to sponsor an un-official and forward-looking international reflection on such vital issues. The Venezuelan interest was emphasized at the Caracas Seminar with its inauguration by Venezuelan President Hugo Chavez, who highlighted the importance of the exercise and the usefulness that its findings might have as a contribution to preparations of the II OPEC Summit to be held in Caracas, in late September, 2000, under the chairing of Venezuela.  We recognize President Chavez for supporting such an initiative, as well as many other personalities and institutions that have backed this effort.

The attached statement intends to contribute to a transparent and participatory international discussion of these issues. Therefore this statement is presented in the form of a public document for official authorities, media, civil actors, corporations, international bodies and the public. We recognize that energy moves the world and the future depends on the choices we make with it. Yet energy matters are too important to leave to specialists; it is imperative that we all – political leaders and citizens alike – get involved in policy making and vital energy issues. 

The Statement

Introduction
Energy should not be seen as an end in itself, but should be targeted towards a truly sustainable and equitable human development. In fact, enlightened information and human ingenuity are superior forms of energy.

Seminar participants recognized the great political challenges facing all the leaders of OPEC and its member nations. We also bear in mind the key contribution of oil to the development processes of the human family. We recognize the role OPEC has played in supporting the goals and solidarity of developing nations and in promoting fairer, more realistic valuations of the earth’s non-renewable petroleum by consumers in the industrial world. Indeed, today the price of an oil barrel is less than the equivalent amount of orange juice, pasteurized milk or brand name water.

But we also recognize the imperative need for change, in view of the cumulative social and environmental costs of the oil era.

Broad Challenges
Today’s challenges faced by all political leaders from both the North and South include:

	Managing the over-expectations of the world’s final consumers of petroleum products who live in societies which have become oil-dependent. These consumers demand low prices and are often unaware that their own governments have become dependent on ever-rising taxes levied on oil products. Most consumers do not know that OPEC members only receive some 40% of the final price of oil and that OPEC’s price adjustments have not even kept pace with inflation in consuming industrial countries from which OPEC countries acquire most of their imports.
	Dealing with the unfair “scapegoating” of OPEC which has continued as a result of these popular and media misunderstandings. This has allowed populist pandering by many politicians and business leaders who are often well aware of the facts concerning the rise in petroleum prices relating to tax policies, refiners’ markups and inventories, and that high oil prices also favor many investors, corporations and exploratory projects.
	The increasingly tortuous geopolitics and conflicts in the world over oil, the siting of drilling and pipeline facilities and the increasing battles over access to oil and inequities in sharing in its rewards.
	The inroads into oil markets by sweeping and accelerating technological changes; including cleaner fossil fuel choices, alternative renewable energy innovations and storage systems, particularly in the transport sectors and the drive for energy efficiencies all along the supply chains to final users.
	The mounting environmental problems at the local and planetary levels and their threats to the health and integrity of all life.
	The dilemmas of pricing and volume in the oil sector. The politics of oil pricing and the double-edged sword of its “dollarization” and subsequent vulnerabilities and exposure to today’s 24-hour currency markets ranging from $1.5 to $2 trillion daily. In this regard, we welcome OPEC’s constructive price-band policy initiative, which introduces more rationality into oil markets.

In sum, the world is changing rapidly and an energy transition of major dimensions is underway.

Broad Points of Agreement
Thus, in the light of all these issues we share a concern over finding optimal paths to a more sustainable energy future and in shaping an orderly transition that respects the legitimate concerns of all parties in the energy sector. The following points met with the general agreement of participants at the Caracas and Vancouver seminars:

	This is a period of turmoil and change.
	Current trends are not sustainable.
	There is an increasing shift from an “old” to a “new” economy (including a shift from a primarily industrial to an information economy bypassing the basic needs of many of the world’s peoples).
	Environmental and ecological issues are gaining traction, but are being manipulated by special interests.
	Climate change is not fully understood but it is real and it is already having devastating consequences.
	Companies and governments are being held more accountable for environmental and social conduct.
	Developing countries have an opportunity to create a more energy-efficient development model that meets their own needs and leapfrogs the old industrial model.
	The global energy supply portfolio is now diversifying.
	Technology could drastically reduce oil demand through the development of energy-efficient and renewable energy systems.
	OPEC has generally followed rather than led market changes.

 Participants also identified the following issues related to this world energy transition:

	Sustaining biodiversity, water resources, valuable forests and all earth’s ecosystems requires entering their full and true value in all economic accounts and transactions.
	Native peoples’ traditional views on the development of oil and other energy resources must be respected and taken into account along with their full participation.
	Critical reflective surfaces are rapidly shrinking, producing a net loss of polar ice caps, glaciers and snowcaps.
	Only the most environmentally-sensitive exploration and production technology should be used in order to minimize local impact.
	Photovoltaics and other systems for rural electrification and other needs provide a valuable development push in a segment of the market that is not accessible to oil.
	There is great potential in harnessing ocean energy – an emerging high-density renewable energy.
	There are over 2 billion people on the planet who do not have access to basic human needs. These people have a right to choose their own development path.
	Industrial countries must reduce emissions by reducing energy consumption and/or increasing energy efficiency, as well as lowering the carbon content of their fuel mixtures and changing wasteful consumption patterns.

A Paradigm Shift
In the past, a set of revolutionary factors, which included economic, social, climatic, technological and political issues, brought about a shift from wood and the prevalence of coal during the 19th century. Today a similar set of factors are driving the world towards the displacement of oil and the transition to a new energy paradigm.

 However, today’s changes have a far more crucial and far-reaching importance. Fossil energy primarily supported American and European industrial capitalism, and its projection to the rest of the world based on the dominion of the Northern economies. At its outset, the oil era came also as a welcome relief from the mounting pollution problems from coal and the horse. Today’s required changes are crucial to political security and the need to safeguard the integrity of the planet. In the past we saw the substitution of one energy source by another, but within the fossil fuels paradigm. Today’s energy transition means a shift from one source to several sources of renewable energy.

If, in the past, changes in the energy paradigm created various forms of centralization, the situation today will be more complex. Many renewable energy sources produce decentralized social configurations. At the same time the information revolution has caused both centralizing and decentralizing trends. For example, information technologies have permitted both a global centralization of financial sectors and democratizing access to information. The latter has enabled popular revolts against globalization forces such as those in Seattle in 1999, as well as Washington, London, Calgary and other international gatherings in 2000.  An additional effect has been a general acceleration of change due to the velocity of communications, transactions and interactivity.

An Orderly Energy Transition
The world can face the transition competitively and chaotically, or in a more cooperative, creative and orderly manner. While markets will be crucial, if the way chosen is left to competition alone, chaos could ensue resulting in a number of big losers and perhaps some big winners. But errors will be costly and we may fail to guarantee the survival of humankind due to social upheavals and disruption of planetary ecosystems. If we also choose cooperation, creativity, innovation and a more harmonious approach, losses would be minimized and optimal approaches may prevail. As markets move toward full-cost pricing, they can even be more effective. The energy transition will not be easy but will imply exacting demands on peoples, governments, science and technology and corporations. However, the international community has the finance and technology resources required to achieve it, in the framework of a new higher and ethical vision of the primacy of life over any other value. But we wish to emphasize that time is scarce and action should be undertaken with a sense of urgency. However, the necessity to introduce gradualism as much as possible will be in order to allow most affected players to equip themselves for the transition. The situation is grave and cannot be managed by short-sighted leaders, for it demands real statesmanship and far-reaching vision. Authentic public and entrepreneurial leaders will need to guide those who cannot or will not understand the urgency of the required change.  The transition will require action on many fronts, including energy demand and supply and implies value changes and education. Policies must be integrative, mutually reinforcing and systemic in order to ensure the economic viability of needed changes. What is at stake is nothing less than a change in the dominant development model, a paradigm change in the prevailing consumption, production and technological patterns.  

Specific Conclusions
Specific conclusions of most participants were:

	Natural gas is poised to provide a major role in the energy transition
	A hydrogen-based economy, particularly related to transport is a likely development.
	A major trend toward micro-generation of electricity is being driven by current market forces and the requirements of climate change issues.
	Emissions trading in carbon, SO2, and other pollutants can smooth the energy transition, even as the Kyoto Accords are refined and re-shaped toward greater equity and efficiency.

A wide range of suggestions for OPEC consideration were offered at Seminar I and Seminar II. These ranged from raising current prices to usher in energy efficiency and substitution of renewable resources to lowering the current band from $ 22 – 28 pb to  18-25 pb. Wider ranging proposals included.

	Designating  1% (or higher) per barrel fee to go into a Fund for Technological Innovation.
	Initiating an electronic barter-trading facility for oil and gas to give OPEC further leverage in the world market place.
	Initiating an electronic barter-trading facility to exchange oil and gas, primarily for many other South-produced commodities, between South countries lacking foreign exchange.
	To examine more closely the opportunities in the climate change debate and Kyoto Accords – particularly the Emissions Trading and Credits scheme – which can be shaped to serve OPEC´s transition to gas and to earn extra revenues. Similar opportunities exist within the Clean Development Mechanism (CDM) and the Joint Implementation Scheme. OPEC countries can take full advantage of these new sources of income and technology transfer –particularly if they can value currently unpriced national assets (e.g. including the water services of forests and watersheds, biodiversity resources for health remedies and their huge daily insolation rates).
	There is a need for full-cost accounting to spotlight the negative aspects of energy use as agreed in Agenda 21 of the Rio Earth Summit, 1992.
	Re-calculate OPEC countries national accounts to fully price their alternative energy and ecological assets.
	Since the super majors are already investing in alternative renewable technologies (solar, hydrogen, etc) the OPEC countries might want to similarly take out their own “insurance policy” with similar investments so that the story of the present energy situation is not repeated.