EU States Should Act Together: GasTerra
The European Union's 28 member states are all pursuing their national objectives without considering the effect they have on neighbouring markets, the CEO of Dutch gas marketer GasTerra, Gertjan Lankhorst, told the Central European Gas Congress in Bratislava April 26.
"Energy policy is fragmented, despite the EU's attempts to create a single market," he said. Trade barriers exist, and while they exist, the single market's benefits will remain theoretical, he added.
He broke Europe into three different geographical sections: northwest, southern, and central and eastern Europe. The first had competitive and integrated markets; the second was blocked from the rest by the Alps or the Pyrenees; and the third was too reliant on Russia.
Despite these differences he said it was possible to create a single market uniting them all, but not overnight and not unconditionally, given the anti-EU feeling in some member states. Regional co-operation would be necessary, he said, meaning setting aside national interests and implementing a solution that helps everyone.
He criticised the assumption of the European Commission, expressed most explicitly in its February strategy for heating and cooling, that equated energy security with reduced demand. "This is the wrong answer," he said, as it would make supply even less secure.
Lowering demand artificially should be avoided as it puts the cart before the horse: it discourages investors and weakens security of supply. "We must reduce energy demand by energy efficiency measures, where it is cost effective," he said.
But otherwise, a properly functioning market would attract investors, by offering predictability and stability. "Ample LNG supplies mean competitive prices. So there is a need to complete the single market so that gas can flow freely from all import points. This would lead to more investors and more pipelines," he said.
Gas needs the right price signals which need free competition. Hubs attract financial institutions and boost liquidity further. Countries in this region do not need the EC to take more steps. If they implemented the rules properly, all suppliers, including Russia, will be welcome, he said.
William Powell