IOGP Report 340
Analyse EU/EEA gas production potential and external gas resources and their relationship to the policy and regulatory framework
Gas in abundance for EU Diplomacy, technology, economics & regulatory framework are key. There is enough gas to meet world demand for the next 100 years. Gas resources within the European Union (EU) and the European Economic Area (EEA) can contribute significantly to future European gas demand.
Between them, the EU and the EEA still possess significant indigenous recoverable resources of some 12,000 billion standard cubic metres of gas – the equivalent of about 30-40 years of EU gas demand at current levels of consumption. Whilst the volumes of imported gas are predicted to increase, geography is in the EU’s favour, with at least 70 percent of global gas reserves within economic reach of Europe.
Those are the findings presented today by the International Association of Oil & Gas Producers (OGP) to the EU Commission and Member States Gas Regulators Forum in Madrid. The report was prepared by OGP in response to a request from the regulators when they met in Madrid last year. This request was prompted by the industry’s response to the Commission’s Green Paper on European Security of Energy Supply.
Though the picture on reserves is promising, the regulators were told today, getting the gas to European markets depends on some crucial factors. First, energy objectives should be placed at the heart of EU foreign relations, particularly the promotion of political stability and open investment regimes outside the EU/EEA. Equally important if the EU is to get full benefit of indigenous production potential, is ensuring the right policies and legal framework. ‘Both internal and external supply security and diversity will be maximised by encouraging competitive market entry,’ the report stresses.
The OGP report also outlined the need for: Continuing development of advanced technology alongside maintenance of the region’s skills base; Economic conditions that encourage – or at least do not hinder – exploration, development and production; A stable, simple and pro-investment regulatory climate; Predictable and appropriate fiscal policies for upstream activities, taking into account the maturity of the EU/EEA region; Achievement of environmental objectives in ways consistent with realising gas resource potential.
To ensure continuity and security of gas supply for Europe and its immediate neighbours, OGP stressed the necessity for ‘A policy vision which ensures that the triple EU energy objectives of competition, security of supply and environmental protection are properly related to each other to avoid situations where gas project developers are subject to potentially conflicting requirements and resultant risk and uncertainty.’