OREANDA-NEWS. December 4, 2007. Paris has hosted a regular meeting of the EBC (European Business Congress) Presiding Committee. The EBC members and invited experts discussed a wide range of issues related to energy sector development prospects, energy market globalization and energy consumption forecasts. Attending the meeting were Alexey Miller, Chairman of the Gazprom Management Committee (EBC President), Jean-Marie Dauge, Vice President of Gaz de France, Maurice Dijols, President of Schlumberger Russia (EBC Presiding Committee meeting host), international experts.

The participants paid special attention to the undervaluation of global energy demand in a long-term perspective.

During the discussion the participants specified that the high growth rates (up to 5 per cent of GDP) of the global economy between 2003 and 2007 required more energy supply and therefore more investment in the energy sector than projected earlier.

According to the most optimistic forecasts, the energy sector development until 2030 will require US$ 22 trln, which is 1 per cent of the total global GDP over this period.

The situation, in the opinion of the participants, is aggravated by unresolved energy scarcity issues in developing countries as well as global climate warming. If the leading countries wish to solve these problems in a foreseeable future, they should commit additional financial resources. In this case energy related expenses may increase to 1.5 and more per cent of the total GDP.

For the first time in its more than thirty-year history the International Energy Agency (IEA) has raised in its November 2007 review an issue of serious imbalance in the global energy sector in a long-term perspective. In case the current world economy trends persist, the potential physical lack of oil output in 2030 is forecast to account 12.5 mln barrels per day (with demand projected at 116 mln barrels), i.e. oil shortage might exceed 10 per cent.

According to the Russian Institute of Energy and Finance (IEF) the demand for primary energy will grow during 2015-2030 at rates that may lead to difficulties when meeting it, and the basic development scenario of the global economic development is unsustainable in terms of secure energy supply in the decades to come.

According to the experts, the retention of the current tendencies in the world economy and energy policy as well as the failure to promptly to step up actions aimed at higher energy efficiency might lead to critical consequences. Neither energy renewables nor revived nuclear energy and coal renaissance might solve a problem of growing energy market instability and energy deficit.

Strong great emphasis is placed thus on conventional hydrocarbon resources oil, coal and especially gas.

The participants reported that in the said situation the governments as well as large energy companies were responsible for the global energy stability. Said companies can become the backbone for further development of the global economy and observance of the sustainable development principle worldwide.

Possessing huge hydrocarbon resources, particularly natural gas, and showing high energy growth rates Russia may become the world energy market locomotive. Nowadays Russia’s population 2 per cent of the global total produces 10.5 per cent of the world primary energy and exports around a half of energy produced.

As Leonid Grigoriev, President of IEA, explained, the intensive development of the energy sector in Russia was confirmed additionally by the advanced (in comparison with the basic document – The Russian Federation Energy Strategy for 2020) hydrocarbon production growth rates. “The goals to produce four basic fuel sources, registered in the optimistic scenario of the energy strategy for 2010, have been reached already in 2007,” said Mr. Grigoriev.

Within the discussion Alexey Miller specified that Russia’s gas sector was rapidly progressing. He said that the fuel and energy sector was changing so fast that “we have to change our plans all the time”.  As he said, the development level stipulated by the energy strategy for 2020 will be achieved already in 2010 according to the Gazprom development plans. By virtue of the gas industry development intensity already nowadays the Ministry of Industry and Energy of the Russian Federation develops corrected energy strategy until 2030.

But such intensification could influence the price: an epoch of cheap gas as well as cheap oil has ended.

As estimated by Morgan Stanley analysts, by mid-2008 the gas price in Europe will be equal to US$ 360 for 1,000 cu m. According to Gazprom estimations, the gas price will be US$ 354.