Europe Sleep Walking into an Energy Crisis: Analyst

By George Backwell
Monday, July 28, 2014
Energy pipelines: File photo

The downing of flight MA17 has prompted calls for further sanctions on Russia targeted at its energy sector. Douglas-Westwood in its 'DW Monday' analysis considers whether such sanctions could have sufficient teeth.

Russia is the world’s largest exporter of natural gas and second largest exporter of oil which together account for near 60% of its export earnings. Gazprom supplies 30% of Europe's gas - some 15% via Ukraine - and has warned exports will be affected if sanctions are expanded.

But in its payments row with Ukraine Gazprom has already stated that it will “only be supplying the exact amount of gas requested by our European partners to the Russia-Ukraine border”. Considering that Ukraine itself needs to draw gas supplies from the same pipelines, Europe is already threatened with gas shortages.

But Russia itself also faces challenges, namely in maintaining – let alone growing – production as existing fields deplete. In 2000, it drilled 3,770 wells and production was some 17 million boe/day. By 2013 it was drilling some 7,500 wells and achieved a production of 23 million boe/day – well numbers up 99% for a production gain of 35%.

On this basis at DW we forecast it will need to be drilling over 8,800 wells in 2020 and in increasingly more difficult areas, hence the Exxon rig sailing to location in the Russian arctic (much to the embarrassment of some on Capitol Hill).

The Russian economy is already in a mess and to maintain its oil & gas production it increasingly needs to access western capital markets and advanced oilfield technologies. Sanctions that severely hit its energy production will indeed work and cripple the Russian economy, but could cause oil prices to soar and thereby impact the still fragile global economy. 

But the real lesson of this whole affair is for Europe – it is far too reliant on imported energy.

No single type of energy source or supplier is immune from problems and Douglas-Westwood have long warned that Europe is sleep walking into an energy crisis due to lack of investment in both ‘home grown’ base-load energy sources such as nuclear power and shale gas, in energy storage and Europe-wide integrated transmission networks.
 

Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

ISS Announces CEO Transition

Captain Claus Hyldager yesterday decided to step down as the Chief Executive Officer of Inchcape Shipping Services (“ISS”).    The current Chief Financial Officer,

CME Lifts Force Majeure for all Illinois River Grain Terminals

CME Group has lifted its declaration of force majeure at all Illinois River terminals that are regular for Chicago Board of Trade corn and soybean futures delivery,

FURUNO of Japan Increases Investment in ENL

ENL Group and FURUNO Electric Co. Ltd of Japan have announced that FURUNO has increased its investment into the New Zealand company to a total of 29.5%. The

Energy

S.Africa Considering Ship-Based Power Generation

South Africa could deploy power barges using gas to generate electricity to help overcome chronic supply shortages, a senior government official said on Tuesday.

Asian Nations Call for Stop to South China Sea Land Work

Calls grow for China to halt land reclamation. Southeast Asian countries on Tuesday backed a U.S. call to halt land reclamation in the South China Sea, underlining

Koole Expands Rotterdam Operations

Koole Terminals has begun operations at the storage facility for petrol and diesel in Pernis that it recently acquired from BP.   The companies have a long-standing relationship.

Fuels & Lubes

S.Africa Considering Ship-Based Power Generation

South Africa could deploy power barges using gas to generate electricity to help overcome chronic supply shortages, a senior government official said on Tuesday.

Koole Expands Rotterdam Operations

Koole Terminals has begun operations at the storage facility for petrol and diesel in Pernis that it recently acquired from BP.   The companies have a long-standing relationship.

Tanker Retrofitted with Dual Fuel Engine

Caterpillar Marine informs it has begin a dual fuel engine retrofit conversion onboard the 472-foot Fure West tanker, owned by Furetank Rederi A/B. The MaK M 43

Consulting

Jonathan Appointed LOC Group's London MD

In line with LOC’s continual global growth and strengthening of the senior management team,  Britain has been appointed as Managing Director of the London operation.

Ross is Fleet Manager, Heidmar

Heidmar announced the promotion of Duncan Ross to Fleet Manager. Duncan joined Heidmar’s London office in 2012 as vessel manager.  Prior to joining Heidmar,

Rolls-Royce Takes Davies on Board

Rolls-Royce appointed Alan Davies as a Non-Executive Director. He will join the Board with effect from November 1, 2015 and will become a member of the Nominations and Governance Committee,

Offshore Energy

Egypt Gets FSRU from BW Gas

Norway-based BW Gas will provide Egypt with a liquefied natural gas (LNG) floating import terminal under a five-year contract.   This comes as as the North African

CWind Joins National Workboat Association

Citing crew transfer services as an integral part of its offering, offshore wind industry service provider CWind announced it is now a member of the National Workboat Association (NWA) of the U.

Strategic Marine: Stock Program Full Power Ahead

Strategic Marine confirmed its stock program of personnel transport vessels is market-ready.  “Our stock program currently incorporates two class leading designs

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Offshore Oil Pipelines Pod Propulsion Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2213 sec (5 req/sec)