Dr. Aldo Flores-Quiroga is a big believer in honest and informal dialogue. When competing sides sit around a table together, leave their preconceptions behind, and engage in open debate, he says, differences can be set aside and challenges can be overcome.

The challenges currently facing the energy sector are many and manifest, and include the never-ending quest to tame excessive market volatility, ensure energy security, and tackle energy poverty. Then there are question marks over, for example, industry investment levels and operational costs, and issues surrounding environmental sustainability.

As Secretary General of the IEF, Flores-Quiroga isn’t there to find concrete solutions to all – or any – of these problems. Rather, his role is to bring major industry players together to discuss them and “to foster greater mutual understanding and awareness of common energy interests.” It’s why the people sitting around his table include government officials, energy industry executives, and other experts. The IEF also holds a biennial gathering of ministers from around the world, the most recent of which took place in Moscow in May. Dignitaries, CEOs, and officials from international global organizations came together to discuss “the new geography of energy and the future of global energy security.”

“The principal mission of the IEF is to facilitate constructive dialogue among the key energy players of the world – both producers and consumers – in order to promote global energy security,” explains Flores-Quiroga, noting that no such mechanism existed before the birth of the IEF, 23 years ago. “In the 1970s and 1980s, relations between producers and consumers were...” he pauses. “Well, let’s say ‘tense.’ After the first Gulf War there was concern about the stability of the oil market and the ongoing and continuous flow of supplies from the Middle East to the rest of the world. There was also an awareness that dealing with any disruption in the markets would require much more cooperation than had existed previously, and this led to calls from world leaders for dialogue between producing and consuming states.”

So, in 1991, ministers from energy producing and consuming countries began informal discussions around global energy issues which, over time and through inter-governmental arrangement, developed into the more formal International Energy Forum, with all member countries signing up to the IEF Charter. During the seventh meeting of the IEF, held in Riyadh in 2000, Crown Prince (now King) Abdullah of Saudi Arabia suggested that a permanent IEF Secretariat be created, with headquarters based in the Diplomatic Quarter of Riyadh. This was duly inaugurated in 2005 and, with energy security continuing to be a global challenge, the work of the IEF became more vital than ever.

The IEF’s diverse membership is currently comprised of 76 countries (from Afghanistan to Zambia), including producing and consuming countries of the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC), and accounts for almost 90% of world oil and gas supply and demand. “Our members include a growing number of countries that have huge influence in the world’s oil and gas markets, both as producers and consumers,” says Flores-Quiroga. “Because the complexity of interactions in these markets is increasing, there are many challenges that require full cooperation from all sides if they are ever to be solved.”

 

Volatility

Market volatility, for example, is always high on the IEF agenda. “Everyone prefers stable markets,” says Flores-Quiroga, bluntly. “To understand volatility means understanding the interaction between physical and financial markets. Volatility is partly tamed by better decision-making, which is dependent on how energy outlooks are built. That is why we at the IEF are working with the IEA, OPEC, and other experts to understand and compare energy outlooks.”

Because lack of accurate, clear oil data is an aggravating factor to oil price volatility, the IEF supports various initiatives around data transparency. After the eighth IEF Ministerial Meeting, held in Osaka, Japan, in 2002, the Joint Oil Data Initiative (JODI) was born, “providing a complete, timely, and comprehensive database and a freely accessible reliable and accurate assessment of the global oil situation.” JODI had been until then a cooperative exercise among various energy organizations, but ministers participating in the producer-consumer dialogue called for the IEF to coordinate this valuable effort in order to strengthen it. Similarly, the May 2014 IEF ministerial meeting in Moscow saw the public launch of the JODI-Gas World Database for better and more comprehensive gas data over the short and long term. Better energy data, says Flores-Quiroga, makes for more informed debate among IEF members.

Industry investment is another IEF talking point. “The rate of investment that is necessary to meet growth demands is going to be pretty high, according to most estimates,” notes Flores-Quiroga. “So certainty about policy, plus better understanding of where technology is heading and where consumption is going, will help facilitate investment and investment planning.” Emerging nations are the main drivers of energy demand currently, he points out, and so have a special role to play in IEF discussions. “The center of demand has moved eastward. The most dynamic markets for energy are in Asia and are determining how much additional energy will have to be added to the market. So what these nations add to the debate is very important.”

Green energy is also a major industry discussion topic as it contributes to energy security by diversifying energy sources, and helps combat climate change. “Everyone wants an energy sector that is sustainable,” says Flores-Quiroga. “So we will see green energy progressing, which is very welcome. Nonetheless, green energy is still at a cost that makes it less attractive, relative to other fuels; and it requires significant government support in order for it to compete over the long term. If technological developments reduce the cost of using these sources of energy, then it will have a bigger role in future – but it’s important to say that transition to a low-carbon economy will not mean the disappearance of other energy sources. A large share of the world’s population relies on wood and biomass as its main energy source, which is precisely why tackling energy poverty is so important.”

Consensus

Obviously, the IEF’s 76 members all have their own interests and agendas. So how can so many countries reach consensus on major issues? “Well, of course, 76 member countries will not reach a consensus on many subjects,” says Flores-Quiroga. “Despite this, the IEF has been able to generate a set of principles and activities that are important to our members. We have seen how polarized positions have become less so; and we have seen how more and more countries are willing to participate in our conversations.”

Energy is an industry that has always fascinated Flores-Quiroga, who splits his time between Riyadh (where the IEF is based) and Mexico (where his family live). After gaining a PhD in political science and political economy at the University of California, he served in the Mexican government, becoming Assistant Secretary for International Affairs at the Ministry for Energy in 2007, where he acted as advisor on foreign energy policy, established foreign energy policy guidelines, and promoted Mexico’s international energy cooperation. He was elected the IEF’s Secretary General in June 2011, for a four-year term, and started working in this role in January 2012.

“Energy is such an eternally interesting and complex area,” he says. “It’s so important for global economic development, for international relations, and for welfare, generally, around the world. Also, energy is an area which touches so many subjects: physics and chemistry, law and economics, accounting, science and engineering, etc. So it’s a never-ending learning process.”

Outside of work, Flores-Quiroga’s interests are “life, family, and friendships,” plus he has a keen interest in the arts, especially music, and sports. Yet the fact is that his role as IEF Secretary General can be all-consuming. “I think it is a privilege to be part of the global energy conversation, especially at the level at which the IEF is involved,” he says. “Helping decision-makers to get to know each other and discuss global trends with each other is extremely rewarding.”
Tony Greenway

Published: September 2014

Photos: Rodrigo Ceballos