Oettinger: Gas Suppliers Must Move to New Pricing Models

Energy Commissioner Gunther Oettinger has stated natural gas had an important role to play in the EU’s future energy mix and a key role in reversing the trend of a declining role of industry in Europe.

Speaking at the recent EU-Norway Gas Conference, Oettinger pointed to the impact of natural gas in transforming the US economy, stating that the energy market can not viewed in isolation, nor can decisions be taken with climate change measures as an exclusive policy parameter.

"We must look at the wider economy, at industrial policy, or - to be blunt – we must look at jobs."

The Commissioner said that he strongly believed “that whatever we do, fossil fuels will be part of the energy mix for a long time to come.”

But he said that the natural gas industry needed to set out a longer term vision of its role in the European energy market as part of the EU’s plans for a low carbon energy supply by 2050.

Oettinger said that gas suppliers must move to new pricing models and must be more competitive, “whatever the state of the carbon market.”

He praised Statoil’s move to a more flexible pricing model as an example of what will be needed to complete in the EU energy market. The second largest supplier of gas to the EU has increasing linked its gas pricing to the spot market.

Dealing directly with the issue of energy security, the Commissioner noted: “Sometimes, gas is still used as a political tool by some external suppliers, notably by blocking the expansion of gas use in order to protect narrow interest or by using it as a negotiation chip in matters which go beyond energy."