Page 21 - European Energy Innovation - Spring 2016 publication
P. 21

Spring 2016 European Energy Innovation   21


requirements on vessels. These              70 bcm by 2020 required to replace       sulphur fuels in the sector is therefore
aspects, along with the increased           reduced indigenous production. It        inevitable.
supply security and competition in          makes sense then that Europe will turn
the energy market show that the             to increased imports through LNG.        The opportunity therefore for low-
Commission's emphasis on the                                                         sulphur LNG should be clear, however
importance of LNG for the EU makes          With such huge supplies from the US      current low bunker fuel prices make
an awful lot of sense.                      and Australia in particular helping      it less attractive and make marine
                                            to create a liquid global gas market,    gasoil the easy option as a fuel for
A FAST DEVELOPING MARKET                    the EU stands to benefit more than       vessels seeking to meet requirements.
A quick look at market projections          most. With the added option of           However, I feel the sector should look
show the scale of the opportunities         buying from global LNG markets,          beyond the current low oil prices. In
presented by LNG. Changes in global         we are given a choice – piped gas        LNG there is a solution available that will
gas markets over the next number            from Russia or LNG. This makes the       meet current IMO requirements and any
of years are set to be characterised        European energy system increasingly      additional ones that may be brought
by increases in exports coming from         competitive with supply secured          in in the future. Investment in LNG
the US and Australia. In 2015, US gas       and increased competition driving        powered vessels now may just prove
production continued along the steep        down costs. Gazprom will have to be      to be a better investment than sticking
upward trend that it has enjoyed in         competitive to maintain market share     with marine gasoil and then being
recent years and according to IEA,          in the EU. I feel this is an important   forced to fit abatement technology
it is set to increase its production        step for Europe and I'm pleased that     down the line when requirements
by a further 114 bcm by 2020, with          our Commissioners have moved early       are tightened further. On top of
production growing almost twice as          to benefit from the huge opportunities   this, as global gas markets become
fast as domestic consumption. This          that these gas market developments       increasingly liquid, they are becoming
means that at some point over the           present.                                 more and more certain and investment-
next few years, the US will become a                                                 friendly; it is debatable whether we
net gas exporter. At the same time,         REDUCING MARITIME EMISSIONS              can say the same for volatile oil prices.
Australia will increase its production      While the benefits of increased LNG
by 230% by 2020 with domestic               supplies to secure fuel for heat and     To conclude, I welcome the
production reaching 140 bcm, with           electricity are well documented, a       Commission's initiative on LNG and
75% of this set to be exported.             mention must go to the potential         feel that we are taking the needed
                                            benefits in the transport sector, more   action to benefit from these fast
While US and Australian production          specifically, in the maritime transport  developing markets. My own country,
levels continue to increase, over the       sector. LNG allows the shipping          Ireland, epitomises where we stand
same period, Europe's indigenous            sector to greatly reduce its emissions.  to gain in all of this – completion of
production will fall rapidly, and with      A sector currently dominated by          the proposed Shannon LNG project
strong opposition to fracking in            heavy fuel oil, the maritime sector      on our west coast would link us to the
Europe, coupled with low oil prices         was much criticised at COP21 for         global market and reduce our reliance
reducing the appetite for investment        the contribution it makes to global      on gas imports from the UK by half,
into additional gas exploration             warming. The IMO is now, however,        creating a competitive market and
activities, new indigenous production       moving to tighten restrictions on        lowering energy costs in the process.
of any great scale is unlikely. Therefore,  maritime sulphur emissions. Increased    Setting the right policy framework
although our demand for gas is              restrictions on sulphur over the next    for LNG, along with the completion
not expected to rise dramatically,          few years are already agreed, while      of Projects of Common Interest (PCI),
our import requirements will, with          it's possible that further restrictions  such as Shannon LNG, will be crucial to
additional import needs of around           will follow. A move towards low-         ensuring the EU is not left behind. l
   16   17   18   19   20   21   22   23   24   25   26