International gas cartel would backfire - Bodman

14 February 2007 18:12  [Source: ICIS news]

HOUSTON (ICIS news)--Proposals to create an international cartel among countries that export natural gas would ultimately backfire on those involved, US Energy Secretary Samuel Bodman said on Wednesday.

"I don't like it and it is not something we encourage," Bodman told reporters. "I will make my views known to the ministers" of the relevant countries, he said.

Bodman did not name the countries he was referring to, but in a speech earlier on Wednesday he criticised nationalistic energy policies of the kind being promoted by Venezuelan president Hugo Chavez and criticised countries that "engage in discussion about collective efforts to control hydrocarbon supplies".

Among several countries interested in the idea, Malaysia - a major exporter of liquefied natural gas (LNG) - has in the past expressed support for the concept of creating a group of gas-producers that would mirror OPEC. The issue of gas supply has been highlighted in recent months by the interruption of Russia's gas supplies to Europe.

In his speech, Bodman set as a priority goal for the energy industry the creation of stable regulatory environments and expansion of the rule of law.

In an apparent reference to Venezuela in particular, he cited restrictions on foreign capital, forced renegotiation of contracts, and nationalisation of oil assets as measures that might generate short-term benefits for some countries but that in the long run would deprive those countries of prosperity. 

"We need government policies that actively encourage investment," he said. 

Bodman was speaking at the annual conference in Houston organised by Cambridge Energy Research Associates that is known as CERA Week.

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