IEA by taoyni

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									IEA:
       http://www.iea.org/about/ome.htm


International Energy Agency (IEA)

Oil Markets and Emergency Preparedness

The Oil Markets and Emergency Preparedness Office is the action unit ready to assess the
impact of any supply disruption in the context of the global oil market and to co-ordinate
the IEA's response should the need for emergency action arise. This requires both the
constant monitoring and forecasting of market developments together with regular
reviews, preparation and testing of emergency policies and procedures in member
countries. The office has two divisions:

   1. Oil Industry and Markets (OIMD)
   2. Emergency Planning and Preparations (EPPD)

Oil Industry and Markets (OIMD)

The Oil Industry Markets Division follows short- and medium-term developments in the
international oil market, looking in detail at world oil supply, demand, refinery, biofuels,
inventory and price developments. Forecasts through to the end of the following year are
published monthly in the Oil Market Report (OMR), with projections for the next five
years published twice a year in the Medium-Term Oil Market Report (MTOMR).

The benchmark status of the OMR has been gained through the scrupulous attention to
detail in the analysis and forecasts. Supply estimates are compiled using field-by-field
data wherever possible. Projections are then made by looking at individual decline rates,
new project developments together with the contributions of NGLs and CTLs. Naturally
this supply analysis also looks at production capacity and investment in OPEC and non-
OPEC countries, together with a close monitoring of above- and below-ground factors
which may affect future supplies.

Biofuels are also included on the supply side. The OMR and MTOMR analysis of the
biofuels sector draws on the expertise of other divisions within the IEA, together with
input from industry experts and the IEA’s plant database.

But the supply of products is only one side of the equation. Refined product availability
has played an important role in determining the level of oil prices in recent years, and the
IEA has met this challenge by stepping up its refinery analysis. Global refinery
capacities, expansions, outages and margins are monitored, together with technological
and yield improvements, shifts in product specifications and the changing crude slate, to
provide a guide to future product supply tightness.

Oil demand is looked at in similar detail. Forecasts build on the back of the extensive
work of the IEA Energy Statistics Division which compiles and standardizes submissions
from IEA Member and non-member countries, together with extensive data-gathering
and checking from OIMD analysts. The forecasting model incorporates economic growth
projections from the OECD, IMF and other institutions, together with the influence of
prices, to project demand by product and by country up to five years forward.

Through its close examination of issues that affect oil stocks and prices, the division also
looks at other topical issues in the oil market, such as the influence of speculation,
liquidity, benchmark evolution and forward price structures. The impact of geopolitics,
weather, legislative issues, together with increasing interfuel competition are further
issues that have to be considered in the analysis - both from a supply and demand
perspective, but also for their impact on investment and price.

The results of this work are reported to IEA Members countries through the Standing
Group on the Oil Market (SOM), helping Member countries to respond promptly and
effectively to changes in market conditions and to highlight areas which may be of
interest to policy makers. The SOM works closely with the Standing Group on
Emergency Questions (SEQ) on oil market and emergency issues. The Division also
makes regular reports on these issues to the IEA Governing Board and other internal
committees.

Contact this division: Anne.Mayne@iea.org

Emergency Planning and Preparations (EPPD)

IEA Response System for Oil Supply Emergencies (pdf)

The Emergency Planning and Preparations Division is responsible for all aspects of IEA
emergency preparedness and reports to the *Standing Group on Emergency Questions
(SEQ).

The basis for the emergency policy of the IEA lies within the Agreement on an
International Energy Program, the treaty upon which the IEA was founded in 1974. The
treaty includes the commitment of IEA Member countries to hold oil stocks equivalent to
no fewer than 90 days of the prior year’s net imports. The treaty also includes an
integrated set of emergency response measures for major international oil
disruptions, i.e. when supplies are reduced by 7% or more to individual Member
countries or to the IEA Member countries as a group. The treaty defines the following
emergency response measures: a draw down of oil stocks, demand restraint, fuel-
switching out of oil, surge oil production and the sharing of available supplies

But, depending on market circumstances, there may be a need for intervention for
disruptions below 7%. To accommodate such discretionary action, the IEA developed a
complementary set of measures known as the Co-ordinated Emergency Response
Measures (CERM). These provide a rapid and flexible system of response to actual or
imminent oil supply disruptions. In 1995, the IEA Governing Board made the decision
that even in a supply disruption of 7% or more, CERM measures would be considered in
conjunction with other emergency response measures. Since then, the IEA has
continuously had on-the-shelf response plans which can be quickly tailored to the crisis at
hand.

CERM measures were effectively used at the time of the first Gulf War (1991) when the
IEA implemented a 2.5 million barrels a day contingency plan, most of which was stock
draw.

Most recently, in September 2005 the IEA implemented a collective action which made
available to the market 60 million barrels of crude oil and oil products, in response to
concerns about interruptions to oil supply as a result of the severe hurricane damage
caused by Hurricanes Katrina and Rita in the US Gulf of Mexico.

To ensure the potential of IEA Member countries for rapid and effective response to oil
emergencies in changing oil market conditions, the SEQ conducts a regular cycle of
Emergency Response Reviews of IEA Member countries, the results of which culminate
in a publication on oil security in IEA Member countries. In addition, EPPD periodically
tests and updates the IEA's emergency response mechanisms and its contingency plans
through its oil supply disruption simulation exercises. These exercises provide thorough
training and testing and involve personnel from Member countries, the oil industry and
the IEA Secretariat.

The SEQ and EPPD work closely with the international oil industry, notably through an
Industry Advisory Board (IAB) composed of senior supply, refining and transport experts
from oil companies operating within IEA Member countries. The IAB is available for
consultation on issues of emergency response and provides expertise in oil supply and
logistics. During an emergency, the IAB advises the IEA on the evolving supply situation
and assists in determining the extent of any shortfall in supplies. It also advises the IEA
on the design of tests of IEA emergency response systems.

In co-ordination with the IEA Oil Industry and Markets Division, the Energy Statistics
Division and certain IEA Standing Groups and Committees, the SEQ and EPPD examine
oil security issues, including global supply/demand prospects, geo-political risks to the
oil market, production capacity and refinery flexibility and emergency response policies
and procedures. Seminars, conferences and workshops are held on these issues.

As oil consumption outside IEA Member countries is rapidly increasing, the IEA is
promoting dialogue and information sharing on oil security policies and measures with
non-member consuming countries, such as China, India, ASEAN countries as well as
some European countries not members of the IEA. With this “outreach” strategy, the IEA
endeavors to harmonise measures to be taken by Member and non-member countries in
times of a significant supply disruption in order to enhance the impact of such measures.

Contact this division: eppd@iea.org

Related IEA Links:
Oil Market Report On-Line
Oil (Topic Page)
Energy Security (Topic Page)

*SEQ

Standing Group on Emergency Questions (SEQ)

The Standing Group on Emergency Questions (SEQ) is responsible for all aspects of IEA
oil semergency preparedness.

In co-ordination with the IEA Oil Markets and Statistics Divisions and other IEA
Standing Groups and Committees, the SEQ examines oil security issues including global
supply/demand prospects, production capacity and refinery flexibility and holds
seminars, conferences and workshops on oil security issues.

The SEQ periodically tests and updates the IEA emergency response mechanisms which
were set up under the 1974 Agreement on an International Energy Program (IEP). The
Agreement includes the commitment of member countries to hold oil stocks equivalent to
90 days of net imports in the previous year. The planning and execution of the work of
the SEQ is carried out by the staff of the Emergency Planning and Preparations Division
of the IEA Secretariat.

Training and testing involves personnel from member countries, the oil industry and the
Secretariat. The SEQ works closely with the international oil industry, notably through an
Industry Advisory Board (IAB) composed of senior supply, refining and transport experts
from oil companies operating in IEA countries. During an emergency or test, an ad hoc
group of the IAB, the Industry Supply Advisory Group, participates in a combined
Secretariat/Industry emergency operations team.

To implement IEP measures, which apply only in disruptions exceeding 7% of IEA or
individual country supplies, the IEA also has a complementary set of measures known
as Co-ordinated Emergency Response Measures (CERM). These provide a rapid and
flexible system of response to actual or imminent oil supply disruptions of any size. At
the time of the Gulf Crisis, the IEA implemented a 2.5 million barrels a day
contingency plan, most of which was stockdraw. In response to the disruption in oil
supplies in the Gulf of Mexico caused by Hurricane Katrina and Rita in 2005, the
IEA implemented a collective action which consisted of making 2 mb/d of crude and
products available to the market for a period of 30 days.

To ensure the potential of the IEA countries for rapid, and effective response to oil
emergencies in changing oil market conditions, the SEQ conducts a regular cycle of
Emergency Response Reviews of IEA member countries.

Industry Advisory Board (IAB)
This group is composed of senior supply, refining and transport experts from oil
companies operating in IEA countries. During an emergency or test, the IAB participate
in a combined Secretariat/Industry emergency operations team.

The International Energy Agency (IEA) is an autonomous agency
linked with the Organisation for Economic Co-operation and
Development (OECD).

The IEA acts as energy policy advisor to 27 member countries in their effort to
ensure reliable, affordable and clean energy for their citizens. Founded during the oil
crisis of 1973-74, the IEA’s initial role was to co-ordinate measures in times of oil supply
emergencies. As energy markets have changed, so has the IEA. Its mandate has
broadened to incorporate the “Three E’s” of balanced energy policy making:
Energy security, Economic development and Environmental protection. Current
work focuses on climate change policies, market reform, energy technology collaboration
and outreach to the rest of the world, especially major consumers and producers of
energy like China, India, Russia and the OPEC countries.

With a staff of around 190, mainly energy experts and statisticians from its 27 member
countries, the IEA conducts a broad programme of energy research, data compilation,
publications and public dissemination of the latest energy policy analysis and
recommendations on good practices.

IEA Member Countries

          Australia (Government site | IEA                Japan (Government site | IEA
          site)                                           site)
          Austria (Government site | IEA                  Republic of Korea (Government
          site)                                           site | IEA site)
          Belgium (Government site | IEA                  Luxembourg (Government site |
          site)                                           IEA site)
          Canada (Government site | IEA                   The Netherlands (Government
          site)                                           site | IEA site)
          Czech Republic (Government site |               New Zealand (Government site |
          IEA site)                                       IEA site)
                                                          Norway (Government site | IEA
          Denmark (Government site | IEA                  site)
          site)                                           participates in the Agency under
                                                          a special Agreement
          Finland (Government site | IEA                  Portugal (Government site | IEA
          site)                                           site)
          France (Government site | IEA                   Slovak Republic (Government
          site)                                           site | IEA site)
         Germany (Government site | IEA                Spain (Government site | IEA
         site)                                         site)
         Greece (Government site | IEA                 Sweden (Government site | IEA
         site)                                         site)
         Hungary (Government site | IEA
                                                       Switzerland (Government site |
         site)
                                                       IEA site)

         Ireland (Government site | IEA                Turkey (Government site | IEA
         site)                                         site)
                                                       United Kingdom (Government
         Italy (Government site | IEA site)
                                                       site | IEA site)

                           United States (Government site | IEA site)

Poland is likely to become a member country in 2008. The European Commission also
participates in the work of the IEA.

								
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