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CNBC's Yergin on Energy Security, Natural Gas Supplies, And Politics

Dr. Daniel Yergin, CNBC global energy analyst & Chairman of CERA
Jim Tkatch

What’s the impact of growing competition for energy resources and markets on global politics at a time of high prices? That was one of the main questions at this year’s "East Meets West" conference, just concluded, in Istanbul, Turkey. This cosmopolitan crossroads on the Bosphorous – part of the city in Europe and part in Asia – really is where east meets west, and increasingly so as Turkey becomes the energy hub between Central Asia and the Middle East, and Europe and the Mediterranean. The conference is hosted by Cambridge Energy Research Associates (CERA) in partnership with DEIK, the Turkish international chamber of commerce, and the sponsors included CNBC-e, CNBC’s Turkish affiliate. The theme this year was "New Frontiers of Energy Security," and the speakers included four presidents: Ilham Aliyev of Azerbaijan, Mikheil Saakashvili of Georgia, Ahmet Sezer of Turkey, and Victor Yushchenko of Ukraine, as well as the energy minister of the United Arab Emirates (and president of OPEC), and the Energy Commissioner of the European Union.

CNBC.com caught up with conference chair Daniel Yergin – CNBC’s own global energy expert and CERA’s chairman – to find out what were the big issues at this key energy conference, which was celebrating its 10th anniversary.

Why was this year's theme the "new frontiers" of energy security?

We wanted to include the traditional issues about oil, but also get to the hot questions about natural gas supplies and markets and the whole environmental side. That too is part of energy security.

What were the key points on energy policy?

We heard different messages. The energy commissioner of the European Union -– that is, its energy minister -- Andris Pielbags, said that the new EU energy policy is determined to catalyze "nothing short of a new industrial revolution" in the form of "a massive shift towards renewable energy." He laid out some very aggressive targets – that the EU get to 20%renewables in its energy mix by 2020. This is as much for climate change reasons as it is for energy security.

It’s also clear that this is, as he put it, "ambitious," very much so, given that 2020 is only 13 years away. The speech by the oil minister of the United Arab Emirates, who is current president of OPEC, was in part a reply to this line of thinking.

What do you mean?

Minister Mohammed al-Hamli presented OPEC’s new outlook, which includes $630 billion of investment required to develop new oil and gas capacity by 2020 in order to help major growth in oil demand. He described the meaning of energy security for exporters as being "security of demand." He got people’s attention when he said that "the biggest threat to future energy supply security is the repeated policy announcements by major industrial countries of gradually reducing their dependence on oil." This could result, he warned, in making "investors shy away from making the required investment to meet future demands." It would be a "waste" to put money into building new capacity for which there would be no market. In other words, the OPEC countries could cut back on that $630 billion investment program because of uncertainty as to whether the demand would be there.

He also commented on some of the legislation in Congress, didn’t he?

He referred particularly to the "NOPEC" legislation, which seeks to sweep aside the immunity of sovereign countries and would authorize antitrust action against member countries of OPEC. Support is very high in Congress. But if such legislation is enacted, he said, OPEC countries might be reluctant to take the legal risk of exporting oil to the United States. As it is, only about 10% of Persian Gulf oil comes to the United States. What looms ever larger in the minds of the exporters is the booming Asian market for oil.

Meeting Europe's Natural Gas Needs

CNBC.com Photo Composite

Is there a new "great game" in Central Asia in terms of competition among the United States, Russia, and even China?

What’s it about? Several hundred people from the energy industry were there, from as far away as Beijing and Denver. What’s on their minds?