Europe and Natural Gas – Are Tough Choices Ahead?
Rune Likvern has produced an interesting article for The Oil Drum: Europe.
Likvern states natural gas has great importance in Europe.
Many people believe (some countries even instituted policies) that it will be the fuel that will become the bridge to an energy future with less reliance on coal and nuclear power. Furthermore, in 2009, about 26% of the primary energy consumption of the 27 members of the European Union came from natural gas, making it a very important fuel today.
Likvern views the European natural gas market as being driven by three components - a) economic development, b) substitution from coal and nuclear to natural gas for electricity generation, and c) weather. Substitution from coal and nuclear could be what now primarily drives European demand for natural gas, as recent data from U.K. suggests.
Likvern presents graphs showing European historical natural gas consumption and supply, along with estimates of future consumption and supply. His analysis shows that even with taking in account increased natural gas deliveries from Russia to Europe and full utilization of U.K. LNG receiving facilities, a shortfall in supply appears on the near horizon, especially if sufficient new sources of supply are not found, or if natural gas is used as a substitute for other energy sources.
More specific findings from his analysis are as follows:
• It is projected that between now and 2020; Europe will need to develop additional natural gas supplies of approximately 120 - 150 Gcm/a (thousand million cubic meters per year) from more distant sources, if demand as projected by EIA and IEA is to be met.
• As of 2009 Europe obtained approximately 47% of its natural gas supplies from distant sources; this is projected to grow to more than 70 % by 2020.
• Europe’s growing dependence on natural gas from more distant sources may also impact its future policies to ensure security of energy supplies.
• If additional supplies fail to appear, Europe could see an imbalance in natural gas supply and demand starting as early as 2011/2012.
EU and Norway’s collective proven natural gas reserves appear to have peaked in 2001 and have since been in decline. As of end of 2009, the Netherlands held around 75 % of EU’s proven natural gas reserves.
Likvern says it is hard for him to see to see where additional required supplies will come from.
For the full text of the article and accompanying graphs, please click here.