EAGC2011: Europe's gas industry struggles to secure supply, rational regulation

Regulatory and supply uncertainties continue to plague Europe’s natural gas industry, as made clear by presentations and discussion Nov. 15 at the opening of the annual European Autumn Gas Conference in Paris.

The world’s largest market for imported natural gas has seen its security of LNG supply threatened this year by the effects of Japan’s Fukushima nuclear reactor catastrophe in March. At the same time, Europe continues to struggle to establish a dependable network of pipeline-supplied natural gas.

Overriding these logistical issues is an uncertainty over the nature and predictability of governmental regulations, mainly in terms of the region’s efforts to reduce carbon dioxide emissions. That uncertainty is only aggravated by the European Union’s current fixation on solving its sovereign debt problems.

After Japan

Among several speakers, many referred to a “post-Fukushima world,” in which Japan—already the world’s largest LNG importer—soaks up yet more LNG available from newly commissioned projects.

Europe’s nuclear power industry has been effectively derailed, as such countries as France and Germany phase out nuclear power and turn towards renewables and, reluctantly, natural gas. In this context, Europe’s natural gas industry is anxious to solidify its gas supply from all available sources.

Earlier this year, it saw the start-up of Gate LNG in the Netherlands (OGJ Online, Sept. 23, 2011), with a number of new terminals set to open in the next 18-24 months.

Acknowledging the maturation of the global LNG industry, Jean-Marie Dauger, executive vice-president for global gas and LNG, said LNG is no longer a “niche supply” source.

Pipeline supply of gas was addressed by Alasdair Cook, vice-president of BP PLC’s $20 billion Shah Deniz II development offshore the Caspian Sea. He reported that first gas will flow from the project in 2017 with 16 billion cu m/year of gas and 100,000 b/d of oil.

The pipelines to bring the gas across Azerbaijan and Georgia and initially via Turkey’s Botas existing pipeline into southern and southeastern Europe will signal the opening of Europe’s long-awaited Southern Corridor.

All speakers agreed, however, that unconventional gas, especially from shale, will not play much of a role in supplying the region if any at all. France, one noted, has banned hydraulic fracturing.

Several speakers noted uncertainties created by the regulatory environment, especially the European Union’s commitment to “decarbonization” of energy supply. Clare Spottswoode of the UK’s Independent Commission on Banking noted governments’ historical reluctance to allow markets to work.

Han-Peter Floren, a member of E.On Rhurgas’s management board, pointed out that gas supply in the medium term appeared ample but, because of regulatory uncertainties, uncertain in the long term.

In this context, many speakers said, development of transportation infrastructure is vital, yet financing remains scare and expensive. Complicating the future is the worsening economic crisis in Europe that undermines energy demand in traditional growth markets. For private investors, the climate is discouraging.

Contact Warren R. True at warrent@ogjonline.com.

Related Articles

Watching Government: Did Maryland go too far?

12/08/2014 Maryland finally proposed a strategy to regulate unconventional natural gas exploration and production on Nov. 25. The question quickly moved from ...

National Forest in Va., W.Va., leaves fracing to state governments

11/18/2014 The George Washington National Forest in Virginia and West Virginia will allow some oil and gas activity using hydraulic fracturing and horizontal ...

US refiners could process more light tight crudes, study finds

10/06/2014 US refiners will have the capacity by 2020 to process 3.1-4.3 million b/d more of light, tight crude oil (LTC) than in fourth-quarter 2013, accordi...

IHS: Unconventional supply chain industries support growing number of jobs, revenues

09/23/2014 A diverse group of industries supporting unconventional oil and gas producers has reaped a large portion of the economic rewards from development o...

AAPG ICE: ExxonMobil outlines international approach to unconventional development

09/22/2014 Global energy demand is expected to increase 35% to 2040, translating to 120 billion boe/year, or nearly 350 million boe/d, stated Rocky Becker, vi...

AAPG ICE: Seismic reprocessing enhances potential for Russia's legacy basins

09/22/2014 Russia's Precaucus and Uralian Foreland basins are the oldest and most developed oil and gas producing regions in the country. As the "birthpl...

Devon Canada files with AER for Walleye oil sands project

09/05/2014

Devon Canada Corp. has submitted applications with Canada’s Alberta Energy Regulator for its Walleye steam-assisted gravity drainage project.

Supply complacency

09/01/2014 Complacency comes easily in the US when the price of crude oil sags while hostilities jar the Middle East, while Russia tests Western resolve over ...

IPAA survey: Regulation becoming more burdensome for oil, gas independents

08/04/2014 Regulations over the past 5 years have made operations more complex for independent oil and gas producers, according to a recent survey, Profile of...

White Papers

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Available Webcasts



The Future of US Refining

When Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST



On Demand

Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected