EU liberalization policy endangers gas supply security: Yousfi
Doha (Platts)--2Dec2010/709 am EST/1209 GMT
The European Union has opted for a policy of energy liberalization
while leaving market forces to solve the problem of long-term supply
security, Algerian Oil Minister Youcef Yousfi told a meeting of the Gas
Exporting Countries Forum Thursday.
Setting the agenda for the 11th ministerial GECF meeting, which opened
in the Qatari capital, Yousfi said that while the Asia-Pacific region
was expected to drive gas demand growth in the coming decades, European
policies and a drive toward renewable and nuclear energy made for an
unclear future energy vision for EU member states, which may in fact
face a supply deficit.
"Looking at Europe, this regional gas market which represents 17% of the
world's consumption, is expected to produce only one third of its needs
in 2020," said Yousfi, adding that this dependence on imports had
sparked heated debate within Europe and was driving policy.
"It seems that Brussels directives are more and more shaping the future
of the European gas markets."
He noted that in 2007, the European Union endorsed an integrated
approach to climate and energy policy and issued three energy and
climate targets known as the "three twenty" targets -- reaching 20% for
renewable energies, reducing emissions by 20% and 20% energy savings.
"...it seems that the European Union has decided to opt for energy
policies guided by the liberalization process while leaving to the
market forces to solve the problems of long term supply security," said
Yousfi.
He cited International Energy Agency data which shows Europe plans to
invest some $2.5 trillion by 2030 to reduce greenhouse emissions and to
develop renewable and nuclear energy projects.
Taking these targets into account, European institutions in their base
case forecast an annual natural gas demand growth of close to 1%, which
is well below last year's figures, said Yousfi. According to some
scenarios, the European Union would have to import an additional 160 Bcm
of natural gas by 2025 whereas the EU's so-called new policy scenario
forecasts a fall of 70 Bcm with the assumption of crude oil at
$100/barrel and higher efficiency.
"...therefore the vision of the future in this market, I can say very
frankly, is not very clear," Yousfi said.
"The situation can only reinforce our strong belief in the traditional
model which consists in sharing risks between producers and consumers on
the basis of take-or-pay long-term sales under acceptable price
conditions," he stressed, again reiterating Algeria's longstanding
policy.
"We consider that the gas industry must continue to be developed within
Europe and Asia through long-term contracts and that it is important to
plan investment for new facilities considering the both interests of
producers and consumers," he added, repeating what has become the mantra
of oil ministers attending the Doha conference, among them gas
powerhouse Russia and Qatar.
The GECF, whose 11 members hold some three-quarters of the world's
natural gas reserves, ended their meeting with a call for further dialog
with the EU commission over gas market regulation.
--Kate Dourian, kate_dourian@platts.com --Nadia Rodova,
nadia_rodova@platts.com
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