Gadonneix promotes energy diversification

Gaz de France SA Chief Executive Pierre Gadonneix yesterday put the case for structured energy diversification in Europe�with gas taking up the mantle from oil as a lower risk answer to future energy demand on the continent. Gadonneix, speaking at the Gas Executives' Summit in Paris, said that 'more than ever citizens and political decisions makers were looking for ways to limit the impact of energy prices variations on the global economy,' such as resulted from the recent oil price spike.


Darius Snieckus
OGJ Online

PARIS�Gaz de France SA Chief Executive Pierre Gadonneix yesterday put the case for structured energy diversification in Europe�with gas taking up the mantle from oil as a lower risk answer to future energy demand on the continent.

Gadonneix, speaking at the Gas Executives' Summit in Paris, said that "more than ever citizens and political decisions makers [were] looking for ways to limit the impact of energy prices variations on the global economy," such as resulted from the recent oil price spike.

Natural gas, which he described as an "essential component of any diversification policy," would outpace both nuclear power and renewable energy, he said, spurred on by the "brutal reminder" provided the escalation in oil prices that the "Western economies cannot afford to slacken their efforts to reduce oil dependency."

In anticipation of gas' enlarged role in Europe's energy markets, Gadonneix said, the industry had to pull together to define the "specific markets rules and type of organization" need to structure the sector as it evolved. He pointed to the European Union (EU) gas directive on liberalization, which came into force on Aug. 10, as "an important component of this new organization."

"The tremors which have been shaking Europe over the last few months and which clearly illustrate the highly destabilizing effect of 'non-organization' of the energy market" point to the need for "an integration of demand" in order to achieve market stability, said Gadonneix.

"This [stability] is necessary in the interest of all players along the chain, consumers included," he added.

The European "gas market of the future," which he foresaw as "competitive and well organized," would be founded on three pillars: continued reliance on long-term contracts, a "system of remuneration" for gas transmission companies, and a consumer-driven market that takes account of the "concentration of supply and the growing demand of consumers."

"Firstly, only a long-term approach is compatible with the development of new production zones and the construction of new transmission infrastructure required to take gas tot he point of consumption," Gadonneix stressed. "Secondly, a system of remuneration for gas transmission companies [will] guarantee their capacity to invest in new projects.

"Lastly, [the current balance of supply and demand requires that] dialogue be established with the small number of players would have the power to control supply, and to provide consumers with 'made to measure' products to suit their specific needs."

Gadonneix was recently elected to a 2-year term as head of Eurogas, an international natural gas industry association.

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