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  SPIEGEL Interview with IAE Head Nobuo Tanaka: 'We Live in an Era of High Energy Prices'

SPIEGEL Interview with IAE Head Nobuo Tanaka 'We Live in an Era of High Energy Prices'

Part 2: 'We Should Commit Ourselves More Heavily to Nuclear Power'

SPIEGEL: You paint a very friendly picture of these countries. But it's precisely the hotheaded rulers, like Iranian President Mahmoud Ahmadinejad and Venezuelan President Hugo Chavez, who are driving up the oil price with their threats.

Tanaka: The price of oil is always a political price to some degree. When these politicians say something, it moves the markets -- but only for a day. When our agency makes a statement, the effect is more lasting.

SPIEGEL: Such regimes can only stay in power thanks to the high oil price. They're doing a booming business based on the scarcity of fossil fuels, while citizens and business owners worldwide are groaning under the cost burden. To what extent, in your view, does the global economy suffer from high oil prices?

Tanaka: There is a reliable indicator for this, which economists call the "oil burden." It describes the relationship between a country's expenditures for crude oil and its gross domestic product. This value increased dramatically this year. It is higher than it was in the days of the first oil price shock, in 1973, and it's approaching the level of the second shock, in 1979. Emerging nations that do not produce any significant amounts themselves are especially hard-hit, like Thailand or Vietnam. Some of these countries have subsidized fuel in the past, but now they're cutting back on this financial assistance, because it's getting too expensive for them and, by doing so, they hope to force their citizens to conserve energy.

SPIEGEL: Does this ease the situation in the oil markets?

Tanaka: It could in fact have a restraining effect on demand. This year China is spending roughly $40 billion on such subsidies, which isn't exactly a small amount. We are not in favor of this subsidy policy. We believe that the right thing to do is to pass price changes on to the consumer in as unadulterated a fashion as possible.

SPIEGEL: How does the current price shock differ from its precursors in the 1970s?

Tanaka: In 1973, OPEC curtailed the oil supply for political reasons, and prices shot up as a result. Today, however, the strong global demand has triggered the crisis. It is a structural phenomenon that will only increase and will impose an ever-growing burden on the economy. We are not properly prepared for this. It is critical that we search for solutions.

SPIEGEL: What could they look like?

Tanaka: Basically, all we have to do is consistently pursue the CO2 reduction goals that the industrialized nations have agreed to. This doesn't just help the climate, but it is also good for energy security. In the IEA, we have developed a scenario on how CO2 emissions could be cut in half by the year 2050. This would reduce demand for oil by 27 percent. The most important instrument in this scenario is energy conservation. We must drastically improve efficiency. Add to this the increased use of alternative sources of energy, like solar, wind and hydroelectric. And we should also commit ourselves more heavily to nuclear power.

SPIEGEL: What, specifically, are you proposing?

Tanaka: Based on our calculations, to achieve the goal of cutting CO2 emissions in half by 2050, each year about 17,500 wind turbines would have to be erected worldwide, 55 coal and gas power plants would have to be outfitted with CO2 filtration and sequestration equipment and about 32 new nuclear power plants would have to be built. Currently one or two nuclear plants are being built each year. But there was a time when 30 reactors were placed into service every year. Why shouldn't we be able to do this today?

SPIEGEL: Perhaps because the operators would run out of fuel?

Tanaka: Our colleagues at the International Atomic Energy Agency in Vienna have assured us that this is not a problem, that we have enough uranium. In fact, where we have a shortage is with experts: engineers with knowledge in the field are in short supply.

SPIEGEL: In Germany, many view nuclear energy with skepticism, partly for reasons of safety.

Tanaka: I know that there is a debate on this issue in Germany. Our role is to provide data and analyses on opportunities and risks. Using this information, every country can make its own decisions.

SPIEGEL: But your position in the discussion is obvious.

Tanaka: Without nuclear energy, it will be impossible to cut CO2 emissions in half by 2050. The Germans should also understand this.

SPIEGEL: Mr. Tanaka, thank you for taking the time to speak with us.

Interview conducted by Dieter Bednarz and Alexander Jung

Translated from the German by Christopher Sultan