Eurogas: EU to use gas as link to sustainable energy

Nov. 27, 2007
Gas can play an important role in the 27 EU member states over the next decades as "a bridging fuel" to a sustainable energy future, said the gas trade group Eurogas.

Doris Leblond
OGJ Correspondent

PARIS, Nov. 27 -- Natural gas can play an important role in the 27 European Union member states over the next decades as "a bridging fuel" to a sustainable energy future, said the gas trade group Eurogas in its first evaluation and analysis of the future role of natural gas in Europe. Current president of Brussels-based Eurogas is Domenica Dispenza, Eni SPA gas and power chief operating officer.

Eurogas's newly established forecasting taskforce noted that expected investments in new energy efficiency and climate change commitments will reduce energy consumption growth in the EU 27 over the next 25 years to the "disproportionately" low level of 0.5%/year, compared with 1.6%/year for the rest of the world. Data for the forecast were compiled from industrial sources, including 30 gas companies of members and also of Switzerland and Turkey, and from many associated national gas industry federations.

While the taskforce points to a 34% energy efficiency improvement to 2030, it indicates that under a number of different scenarios examined, fossil energy sources will continue to be the backbone of Europe's energy supply.

Eurogas expects the largest increase in gas consumption will come from electric power generation at a growth rate of 2.7%/year. Its share will increase to 38% of the total 625 million tonnes of oil equivalent (MMtoe) of gas demand in 2030, up from 28% in 2005. Volume growth in residential-commercial use will slow to 0.4%/year to 194 MMtoe. In the industrial sector, with some support from emissions trading, gas sales will increase by only 1%/year to 156 MMtoe in 2030.

Gas supply will continue to rely on long-term contracts despite increasing short-term agreements. The task force indicated that the EU gas industry has already contracted gas deliveries from regions outside Europe that fully cover foreseeable demand until 2015, at which time a "substantial gap emerges between demand and the supplies from European production or imported from outside Europe."

Demand for additional gas supplies will jump to 22% in 2020 and to about 39% in 2030—from 10% in 2015. This is why the European gas industry is now focusing its gas procurement on the period after 2015. A huge effort and substantial investments by suppliers will be required to mobilize this gas in time, considering the growing global gas demand and decreasing indigenous production in Europe, cautions the task force, which also points to stiffer competition for supplies on international markets.