The International Association of Oil and Gas Producers (IOGP) represents over 80 oil and gas companies responsible for producing one third of the world’s gas and half of its oil, as well as service companies and national oil industry associations. IOGP welcomes the opportunity to contribute to the discussions on the Energy Union. This paper describes the views of the European upstream industry as represented by IOGP in a number of key areas.
Fundamental to the viability of an Energy Union is the need to ensure that all three elements of the energy and climate framework – sustainability, security and competitiveness – are balanced. Critical to this balance and to promoting competitiveness is the establishment of a well-functioning internal energy market. In discussions on energy security, and also over decarbonisation, it is worth recognising that, according to the European Commission, 55% of Europe’s gross energy demand is forecast to be met by oil and gas by 2030.
As the Energy Union develops, IOGP encourages the Commission to adopt a broad definition of ‘energy security’ – beyond one that focuses purely on energy supply security – to recognise the critical importance of affordable energy. As shown in the US, access to affordable energy is critical to industrial competitiveness, to employment creation, and to the prosperity, wellbeing and overall ‘economic security’ of Europe’s citizens. The economic benefits (employment, technology development, tax and royalty revenues) from indigenous production of oil and gas should not be underestimated either. The NERA report shows that, in 2011, oil and gas generated significant revenues to European governments – over €430 billion.
IOGP would recommend an explicit reference to affordable, as well as secure energy in future descriptions of the five Energy Union dimensions.