The EU currently imports approximately 41% of its gas, with imports expected to increase to 74% over the next 25 years, 30% of which is expected to come from Russia (see Figure 1). During a summit in Brussels in 2007, the EU discussed plans for security of energy supply. It was outlined that the EU first needs to diversify its energy sources and promote feasible transport routes with better operational and management systems to respond to supply crises more effectively. It was also clear that new gas supplies needed to be secured. Compounding this increase in demand, long-term contracts with current suppliers are reaching an end and for new supply contracts Europe is competing with the world market. Thus, the EU faces a ‘perfect storm’ of sharply rising domestic consumption, falling domestic supply and increasing scarcity of available gas, as well as long timelines to develop projects. How can Europe meet its future gas needs?
Diversifying Gas Supply
The EU is dependent on imported gas. B 2020, gas demand will exceed 700 billion cubic metres (bcm)/year, approximately 25% up on 2007, sustained by increasing gas-fired power generation. Over this period, domestic energy production will continue to fall to one-quarter of demand and Russia’s importance as Europe’s primary supplier will continue to increase. There are several interconnected factors affecting future supplies and, taken together, they provide an indication of the challenge facing the EU:
- First, in some producing countries, operation of existing gas fields is not optimal, meaning additional throughput capacities cannot be realised. Also, maintenance practices are not consistent or implemented effectively, meaning many pipelines and facilities are degrading. Finally, due to lack of investment, upgrading and developing existing fields has not been possible, resulting in production being stifled rather than increased.
- Most of the EU’s imports are highly concentrated, so that disruptions for whatever reason can place Europe s gas consumers at risk.
- Although EU policy-makers are making progress in developing new supply initiatives, progress has been slow. Consequently, available gas quantities are dwindling as producers commit supplies to elsewhere.
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