Speech by Alexey Miller at the European Business Congress Annual General Meeting and Conference “Ecological Challenges and the Energy Sector”
14th EBC Annual General Meeting and Conference “Ecological Challenges and the Energy Sector”, June 2, 2011, Prague, Czech Republic
Ladies and gentlemen,
Our conference is held at the moment that can literally be described as crucial for the European energy sector. A series of external factors make Europeans see the target model of continental energy supply in a new light.
Political crises in North Africa and the Middle East, the war in Libya and suspended oil and gas deliveries from this country caused changes in the approach to the energy supply risks assessment.
The question is clear: Does Europe need another Libya to reduce its dependence on Russia?
The accident at the Japanese nuclear power plant brought the future of the European nuclear energy into challenge again. Somewhere the discussions are still underway, somewhere the decisions have already been taken. However, in recent months heads of many energy companies and industrial regions during their visits to Moscow have been declaring, “We will need extra gas supplies for gas-fired power generation”.
Shale gas production development in America enthusiastically regarded by many experts has an adverse effect on Europe so far. “What brings the competitiveness – a newly discovered cheap energy resource or still subsidized renewable power generation?” The answer is evident and it will not cheer European taxpayers.
Of course, by no means we are calling for a turn back in the course of history. But we want to highlight that the critical mass of factors has already been reached allowing to reconsider the European sense of good and bad, the structure of the optimal fuel and energy balance and the prioritization of the energy policy in a changing environment.
I would like to dwell on one of these promising ideas.
A natural gas vehicles (NGVs) rally is scheduled to coincide with the European Business Congress Annual General Meeting and Conference. I am sure starting guns will not misfire and the motor rally, which will last for a week and mainly run the roads of Germany, will give pleasure to its participants and receive media exposure.
A rally of natural gas vehicles was scheduled to coincide with EBC Annual General Meeting
This is just a piece of campaign we are planning to arrange in order to promote the European gas fuel market development, increase the efficiency and popularity of the projects related to the natural gas filling stations network creation in Europe.
On the way from Prague to Greifswald where the motor rally will finish and where, as you know, Nord Stream will come ashore this autumn, its participants will be able to get acquainted with the plans of our partners form Volkswagen on compressed natural gas (CNG) vehicles manufacturing and to show the capabilities of the vehicles running on the most eco-friendly fuel at the Berlin exhibition arranged by the European Natural Gas Vehicles Association.
There are currently some 1.4 million NGVs in 40 European countries including Russia.
The NGV market mainly consists of CNG vehicles. At the same time, great prospects are opened by the use of liquefied natural gas (LNG), primarily for heavy transport, and gas-to-liquids (GTL) diesel fuel.
The NGV fleet growth, the increasing environmental legislation pressure and the planned adoption of the Euro 6 standard in the EU will give a fresh impetus to the use of natural gas as a motor fuel specifically in the cargo transportation sector.
With the decisions that can be taken today, the demand for natural gas as a motor fuel may reach 80 billion cubic meters in Europe by 2030 which is nearly 10 times more than the current consumption level.
What does it mean in terms of environmental protection? About a quarter of greenhouse gas emissions in the EU are produced by transport and this figure keeps growing. According to the European Commission, 71.3 per cent of the transportation sector emissions in 2008 were produced by motor vehicles.
Ambitious plans of the European Union on the atmospheric pollution abatement are well-known: by 2020 greenhouse gas emissions are to be reduced by 20 per cent versus 1990 and 80 per cent – by 2050. In order to achieve these goals, the European Commission has recently called for a 60 per cent reduction by 2050 in greenhouse gas emissions by motor transport versus 1990.
Dr. Tessen von Heydebreck, Vice President of EBC and Alexey Miller, President of EBC
The EU authorities induce car-makers to start manufacturing environmentally more friendly vehicles through fuel taxation. But natural gas as the cleanest hydrocarbon fuel suits perfectly well for tackling the ambitious challenges faced by Europe both in the transportation and other sectors.
Present-day natural gas vehicles allow for a 20 to 25 per cent CO2 emissions reduction versus similar gasoline vehicles.
In view of a potential increase in the pressure made by the environmental standards and due to better methane combustion, this type of motor transport is an efficient long-term solution.
Oil prices have reached high level with natural gas on the back of it serving as an economically feasible solution for the transport sector. Here is the specific example. NGVs in Italy are more promising in the following segments: passenger cars for the youth, public transport (including taxi), heavy transport. The average fuel expanses by an NGV taxi in Rome are EUR 10–12 a day per 200–220 kilometers. The equal diesel taxi has to pay EUR 20–25 for the same distance. The economic efficiency of NGV taxis is obvious while the suppliers gain the following advantages from gas utilization as a motor fuel: year round consumption, no peak loads in winter and falling demand in summer.
We believe that NGVs development must be in the spotlight of the discussion about the future of the European energy sector we have called for in the beginning of the speech. Gazprom, on its part, will do its best to promote NGVs.