European Gas Market Still Weak as Global Demand Increases
Global energy and metals consultancy firm Woods Mackenzie has today said that gas demand in Europe will remain weak even as that of the U.S., China and the Middle East increases.
In a presentation given at the FLAME 2013 conference in Amsterdam today, the consultancy's Head of Gas & Power Research Ben Hollins said that the European market would likely not increase to pre-financial crisis levels until the end of the decade.
"Energy intensive industry is being squeezed by a lack of competitiveness," Mr. Hollins told conference attendees. "Coupled with that, we've already seen evidence that energy efficiency measures in the retail sector are taking hold in North West Europe. For now, the only upside is in Turkey and parts of Central & Eastern Europe, driven by relatively strong economic growth.
"Gas simply cannot compete with coal in the power generation sector at current fuel (and carbon) prices..." he continued.
EU regulations would also play a part in the demand for European gas, Mr. Hollins said, with the EU Emissions Trading Scheme and the drive toward renewable energies also playing a role.
In contrast to the depressed situation in Europe, globally the gas market is actually on the rise, the consultancy's investigations forecast, with global gas demand expected to be greater in this decade than last. The firm expects demand to grow as much as by 33% between 2010 and 2020, leading to total global gas demand exceeding 4,000 billion cubic metres by 2020.
Chief among these gas purchases will be countries that traditionally have not had a strong demand for gas, the forecasts show. China is expected to increase demand by 300 billion cubic metres. The Middle East, which has always exported more gas than it imports, is expected to stay level for gas exports at around 100 billion cubic metres a year. However, import demand will rise to 150 billion cubic metres.
Finally, the U.S., which has previously favoured oil will also increase it imports over this decade, according to the firm, with growth between 2015 and 2020 alone accounting for 150 billion cubic metres of imports.