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