1. Transition through Gas
An Energy Accord
Chris Cook
Wimpole International
31 October 2012

2. 21st Century problems cannot be solved with 20th
Century solutions

3. 20th Century - Energy Charter
Stakeholders
- Producers
- Consumers
- Intermediaries – public (State) and private
- Investors
Legal framework – Energy Charter Treaty & Organisation
Investment – Debt and Credit (Equity) instruments

4. 21st Century - Energy Accord
Complementary consensual addition to Energy Charter
Stakeholders
- Custodian
- Producers
- Consumers
- Managers (service providers)
- Investors
Legal framework – Nondominium agreement
Investment – Prepay credit instrument ('stock')

5. Nondominium – What it is and is not
Nondominium is not an organisation
Parallel agreements for self-organisation
Clearing Union - agreement between stakeholders jointly
- governs & guarantees energy stock issue & exchange
Capital Partnership - agreement between stakeholders
individually
- governs allocation of energy flow

6. Capital Partnership
Producers
%
Consumers
Consumers
(via Custodian)
% %
Investors Managers

7. Nondominium – How it Works
All rights held by Clearing Union as common Custodian
Production shared by Producers and Managers in
accordance with Capital Partnership
Balance of production after Manager's share is available
to create, issue and sell Stock to Investors
No stakeholder has dominant rights
Stakeholders have agreed 'stewardship' rights of veto

8. Nondominium – Outcomes
Neutrality
– no competing sovereigns as in Condominium
– takes politics out of energy
Equity – ethical sharing of risk and reward
Stability – no stakeholder has an interest in volatility
Resilience – risk is distributed
Complementary – not an alternative but an addition to
existing agreements

9. Prepay ('Stock')

10. Gas Prepay – What it is & How it Works
Undated credit returnable in payment for gas supplied
Stock is issued by gas producers and sold at a discount
$1.00's worth of gas sold for 80c gives absolute return
of 25%
Rate of Return is the rate over time at which Stock may
be returned to the issuer in payment for gas supplied
Rate not fixed - depends on existence & amount of flow

11. Gas Prepay - Outcomes
Gas Loans
Prepay - direct investment in future gas production
Producer – sells gas forward; locks in price; interest-
free loan until stock returned against gas supplied
Consumer – prepays for gas; locks in gas price, but not
supply
Investor – investment in energy; if a financial investor
does not buy, a Consumer will

12. Gas Prepay - Outcomes
Subsidy Policy
Gas price increased to global level
Populations compensated with issue of gas stock
Incentive to save gas, and exchange stock for value

13. Gas Prepay - Regulation
Transparency
Existence of prepay must be visible to stakeholders
Management
Issuance managed by service providers with a stake in
the outcome
Managers accountably supervised on behalf of
stakeholders collectively

14. Next Steps

15. Energy Co-operation - Caspian Gas 5 + 1
All 5 Caspian littoral nations + Turkey
Caspian 'balancing point' physical market price
Caspian benchmark gas price
Gas Clearing Union
Gas Prepay investment – 'gas loans' fund infrastructure
Gas Capital Partnership - private sector service
providers need minimal capital

16. Energy Co-operation:Transition through Gas
Eurasian Energy Clearing Union extending to EU, SCO...
Energy-based framework for financing trade and funding
investment in renewables and energy savings
Energy standard of exchange
Transition through Gas

17. Energy Accord
Energy Principles – Values underpinning policy
- Accessibility, Equity, Neutrality, Resilience, Security,
Stability, Sustainability, Transparency
Energy Doctrine – basis for policy
- Energy Economics – least energy cost
- Energy Co-operation – funding from shared surplus
- Energy Resilience – distributed production and risk
- Energy Savings – saving energy is saving money
- Energy Standard – price dollars and oil in gas