Russian gas: guaranteeing European energy security

The forecast for European gas prices does not point to a drastic drop anytime in the next decade although not long ago gas prices and demand in Europe dropped considerably as the fuel was being replaced by increasingly competitive nuclear power and alternative energy sources.

The forecast for European gas prices does not point to a drastic drop anytime in the next decade although not long ago gas prices and demand in Europe dropped considerably as the fuel was being replaced by increasingly competitive nuclear power and alternative energy sources.

In 2011 the Arab Spring had a disabling effect on North African and Middle Eastern plans to supply gas to Europe. Shortly thereafter the Fukushima accident led to massive distrust in nuclear energy and what some called “the Nuclear Renaissance” was shattered by the disaster. Unfortunately for Europe it is not possible for alternative energy sources, such as solar and wind, to fulfill the energy needs of Europe without nuclear power. Finally the European financial crisis left no money for costly renewable energy supplies and projects.

Analysts are unanimous on one point at least; despite all of Brussels’ efforts to minimize Russian gas imports to the continent, Europe can not survive without Russian gas.

Gas is one of the purest of all natural resources and people find it safer than say, nuclear energy. Gas is also cheaper and more reliable than renewable energy and is also more ecologically friendly than oil and coal. Finally there are enough gas reserves to allow for energy planning dozens of years in advance. All of this and the previously mentioned events which affected Europe mean that the demand for gas will continue to grow.

Against such a backdrop projects like the Russian-German Nord Stream Pipeline are even more strategically important, says the head of the Institute for National Energy Sergei Pravosudov. He told the Voice of Russia that Russia needs to increase gas supplies to Europe as Europe’s consumption climbs and its reserves decline. This will cause a demand for greater imports he said adding that Russia has huge gas reserves and is Europe’s closest neighbor and its biggest supplier. So imports of Russian gas into Europe will definitely grow.

Even by 2020 t here is no serious scenario which sees a serious reduction in demand. The exact pace of growth may vary slightly but gas consumption will go up, that is a given, and even Brussels admits to the fact.

According to the Cedigaz International Information Association for the Gas Industry, Europe consumed 7.5% more gas in 2010 than it did in 2009 and since 2000 Turkey, which aspires to join the European Union, has seen its gas consumption grow by 85 billion cubic meters a year.

Two other important factors pointing toward an increase in demand is the fact that European Union’s gas production has shrunk since 2000 by more than 30 percent or 64 billion cubic meters a year and the fact that nuclear power plants are being shut down all across Europe which will cause the need for an extra 170 billion cubic meters of gas a year to make up for the loss in energy production.

According to forecasts, gas consumption in Europe will total 150-200 billion cubic meters by 2030. The maximum discharge of Nord Stream, which began pumping process gas on September 6th, is 55 billion. South Stream will add another 63 billion. Together the two projects will easily meet Europe’s increasing demand for fuel.

Partner companies have invested huge sums into the study of the pipelines’ effect on the environment so as to guarantee that they comply with the requirements of the UN and those of international conventions that stipulate environmental safety and the projects meet or exceed all current foreseeable requirements.