The last week saw the success of the fourth BRICS Summit in New Dehli. However, the range of issues and potential for development of the BRICS economies go far beyond the existing meeting mechanisms. It is the fact that the BRICS countries are of critical importance to both supply and demand fundamentals of energy markets globally. Each one of the BRICS economies enjoys a critical position and capacity for influence on the global energy scene.

Among the largest producers and exporters of energy resources, Russia occupies a key position in the global energy market. It is already involved in a mutually dependent cooperative pattern with the European Union on oil and gas. The prospective development of its oil and gas resources in the High North has presented the world with a new horizon in this regard. Apart from abundant energy resources, Russia has been endeavoring to renew its own energy structure for an integrated and R & D oriented development. This will have greater implications on the regional and global energy industry, as well as on the geopolitics and economics of energy.

China is a big producer and consumer of energy resources, and outstripped the United States in 2010 in terms of consumption. Its domestic oil demand growth now plays a key role to the global oil market. Similarly, the prospect of its natural gas, plus shale gas, could be a game-changer in regional trade patterns and associated geopolitical dynamics globally. Whether China can solve its own domestic energy issues has become a global issue with far reaching consequences all over the world.

India is the fourth largest energy consumer after China, the US and Russia with an even greater dependence on external oil than China. For nearly 10 years, cooperation between India and its neighboring energy suppliers has been enhanced rapidly. The competition and cooperation between China and India in global energy arena are significant factors for global energy market today. As larger emerging economies, both China and India are advancing towards industrialization with a range of similarities in their needs to address development issues such as various energy use issues.

Brazil has been conducting a large number of exploration and development in order to bridge its gaps in the energy sector, which has led to sizable discoveries in its offshore, and deep water subsalts in particular, thanks to its deep water strategy. Petrobras, its national oil company, has been taking a leading role in several fields of deep water exploration. Moreover, Brazil has set an excellent example for developing countries by developing its bio-fuel technology and utilization earlier and on a larger scale than most. South Africa, as the biggest energy user in Africa, is relatively advanced in terms of new energy development compared with other emerging economies. It also takes a leading role in the development of clean coal technology.

The five countries demonstrate strong complementarities and strong potential for deeper cooperation. The author suggested Energy BRICS, a government oriented and open multilateral cooperation mechanism for the group should be a key topic for future summits. By first establishing cooperation mechanisms among themselves and spearheading such cooperation at a global level, the BRICS countries would be at the forefront of multilateral innovation and institution building in a critical area of global governance.

First, the dialogues among BRICS should focus on the management of energy demand, as well as on the development, application and innovation of new energy technologies for easy starts. Through regional cooperation, managing the demand for energy entails formulating plans and devising policies to enhance energy efficiency and comprehensive utilization. As a major energy consumer, China should propose to work with India for instance to launch an initiative to strengthen energy demand management, as well as coordinate their positions towards climate change. Technology advancement in the energy sector can lead to the promotion of clean coal technology, deep-water technology as well as new energy technologies. Clean coal and renewables should be the focus at this moment from CO2 emission point of view and easily acceptable for the BRICS since they are ready to go ahead with this type of cooperation. 

Second, the BRICS are leading emerging economies in the grouping of G20 and the world. The proposed energy cooperation mechanism is bound to challenge current global governance systems dominated by Western economies, and lead to the formation of a new global governance systems. The BRICS should start by discussing global energy demand and supply conditions, release their suggestions concerning the restructuring of global energy supply and demand mechanisms, explore common energy policies and plan for actions, and then coordinate their positions so that they can speak with a common voice in forums such as the International Energy Forum (IEF) and other relevant global energy platforms. On these occasions, a closer cooperation mechanism should be devised at operational level, such as an energy ministerial conference along with energy policy coordination and interaction mechanism put in place through the efforts by officials, and members of the business association and civil society communities. An Energy Working Group should thus be organized as a permanent organ, and a BRICS Energy Research Alliance be formed as an independent think tank to provide policy relevant research supports.

Xu Xiaojie is Senior Fellow in Research Division of International Industrial Economy, IWEP, CASS.