The energy challenge is an unprecedented challenge that faces the world today. How does one meet increasing global demand for affordable and secure energy, while
simultaneously tackling climate change? That is the challenge for you, for us in Europe, for large countries and small. We must manage the competing pressures of increasing global energy demand alongside increasing production constraints, all while low-carbon technology is still developing.
The International Energy Agency predicts global
primary energy demand will increase by over a third in the next 25 years while access to traditional energy resources is, in some regions, becoming more difficult. As you all know, the challenge is even greater here in India, where primary energy supply must multiply by at least 3 times in the next 20-30 years if India is to underpin high growth and meet the enormous energy needs of its population.
Meeting this challenge is in the interests of governments and peoples across the world because a stable and secure supply of affordable energy is essential for global growth and development. Fuel prices matter. Energy costs matter. The bills we are called upon to pay to access new grids or
existing supplies are a hot issue in the UK and elsewhere. The UK Treasury estimates that a sustained oil price increase to $150 would cut next year's global growth by half a percent.
Moreover, we have seen in the past that after every major oil price hike, there has followed a global recession. So we cannot allow the price rises and
volatility of the last six months to become a pattern for the future. It is a relief to see the crude oil price easing recently, but who knows how long that will last. It is a dangerous thing to predict.
The energy challenge we face is complex and multi-faceted. Today I want to set out a pattern for building a more positive energy future using measures that, crucially, address both supply and demand. A key element of this pattern is partnership—both between countries like India and the UK, and between the public and private sectors. Our efforts must be brought together because we cannot tackle the challenge alone. It was one of my roles in Mrs Thatcher's government
to promote privatisation. How does this fit? We were a heavily corporatised economy with much in public sector hands. We managed to unravel some parts of the energy sector including coal, gas and atomic energy.
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