Surplus and Deficit in the Golden Age of Gas (part 2—EU)

1.  Reliance on imports

In Europe, as opposed to the US, oil production is in decline, and shale gas is not yet an option as it is in the US, so imports of oil and gas are required.  (BCM = billion cubic meters)

By 2020 consumption 627 BCM, production 259 BCM, with a shortfall of 368 BCM.

By 2035 consumption 671 BCM, production 204 BCM, with a shortfall of 467 BCM.

This shows the increasing reliance on Europe for imports of petroleum products.

2.  Import sources

Europe is located close to vast resources of natural gas, but geopolitics complicates access to some of these resources.   Iran is a source of petroleum products that could be available to the EU, but EU has decided not to accept imports from Iran in order to participate in the sanctions imposed by the US.   (For details, please refer to my earlier blog post

There are currently three import sources that are under development.

1)  Nord Stream, originating in Russia, which is scheduled for completion in 2012 with a capacity of 55 BCM (billion cubic meters)

2) Nabucco, originating in Iraq and Turkmenistan, which is scheduled for completion in 2014 with a capacity of 31 BCM.

3)  South Stream, originating in Central Asia and Kazakhstan, which is scheduled for completion in 2015 with a capacity of 63 BCM.

3.  Shale oil potential

There is shale gas potential in Europe (France, Poland, and Norway) and in North Africa (Algeria and Libya).   However, shale gas in Europe unlikely to develop in the same way as in the US.   It will be available but in the longer term compared to the US (after 2015).

One of the reasons for this is that there is relatively more pressure on the governments of the EU regarding  environmental effects of shale gas production than there is in the US.

Tomorrow I will post on the portion of the webinar dealing with the oil and gas market in China.


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