ECE Gas Centre Database System - Report on Security of Natural Gas Supply in the European Part of the Unece Area

3. Reserves, production and future options

The steady increase in demand of natural gas requires a constant expansion of the gas infrastructure and continued efforts in exploration and production. The physical existence of gas resources will not be a limiting factor in the further development of the gas markets. This is the result of all studies analysing the gas resource base. In line with these findings a study undertaken by the OGP6⁶ has also shown that gas resources available for export to Europe are sufficient to supply expected EU and global demand for at least 100 years.

Based on the OGP report, the remaining recoverable natural gas potential inside the EU/EEA⁷ area amounts to some 13,500 Bcm, which at current consumption levels would supply Europe for about 30 - 40 years.

Gas resources outside Europe, which could be exported to Europe, amount to some 180,000 Bcm; this figure takes economic and technical feasibility and domestic consumption in the exporting countries into account.

The increasing demand for natural gas in Western and Central Europe and the decline of indigenous production reconfirm the need for constructive relations with the Russian Federation, North Africa, Middle East and Central Asia. Diversification of imports is an important strategic element for security of gas supply policies in Europe.

One of the key policy elements of the gas industry for the security of natural gas supply is diversification. This can be observed to develop further in “many flavours”:

New pipelines from new (or comeback) suppliers (for instance Libya-Italy) could enhance security of supply through both new routes and new sellers;
New pipelines from “traditional” suppliers (for instance Medgaz and the North European pipeline) will contribute to a more reliable environment by diversifying competition with respect to transit countries;

New LNG projects, either from existing or new players.

With regard to the very long term, the increasing role of natural gas on the present fossil fuel orientated energy market is often seen as a bridge, together with renewables, to a hydrogen market in some fifty to one hundred years. In this picture natural gas has a growing position as well as renewables. The actual growth of renewables depends on innovative development and environmental orientated preferences by government and some consumer groups. In the event of an additional choice for renewables, dependency on fossil fuels might be reduced and security of natural gas improved.

Although a shift on the energy market towards low-carbon or even carbon-free energy supply is emerging, a vast increase seems only realistic in the long term.

The main impact may come from a more efficient production of renewable energy together with high fossil fuel prices, resulting from diminishing reserves.

As far as a future hydrogen market is concerned, many technical problems have to be solved and there is no real economic basis yet. Technical problems are related to production, availability of hydrogen-related energy to end consumers, as well as the transportation of hydrogen. The present natural gas infrastructure as such is not fit immediately suitable to be used for hydrogen transportation and distribution because of the metals used. Further studies should indicate whether solutions can be developed. In the meantime, the bridge created by natural gas and renewables has to be extended and well maintained.

OGP figures - summary

6 OGP: (2002) and (2003).
7 EU15, Norway, and EU Accession Countries
8 The definition for “Reserves”, “Discovered Potential”and “Undiscovered Potential” have been chosen to illustrate the supply potential. The “Discovered Potential” category includes known reservoirs, which require advanced technologies or improved economic conditions before they can be exploited. “Undiscovered Potential”, which amounts to about one-third of all resources, needs continued exploration and critically depends on a supportive and enabling policy framework.
9 The Russian Federation and the former Soviet republics that are not part of the Russian Federation.
10 Recent reevaluation of the Russian Federation natural gas reserves by Gazprom indicates an increase from 32960 to some 55000 Bcm, bringing the total for FSU to almost 100000 Bcm.