Europe's Energy Security Cannot Rely On Us

Europe's energy security cannot rely on the U.S. and it will have to continue to buy gas from Russia for many years to come, experts said at the Atlantic Council Energy and Economic Summit in Istanbul on Friday.



"Most U.S. gas exports will not go to Europe. They will go to Asia because the price is better," said Jason Bordoff, professor and director of the Center on Global Energy Policy at Columbia University.



Experts say Europe will not benefit from the shale gas boom in the U.S. unless North American exports to Asian countries force other suppliers, like Qatar, to divert supplies from Asia to Europe.



Europe is left with Russian gas and other difficult options. "Despite all the propaganda, the truth remains, the destination of Russian gas will remain in Europe for many years to come," said Alan Riley, professor of law at City University of London.



Russia and Ukraine reached a European-brokered agreement at the end of October that would guarantee the delivery of Russian gas to Ukraine during the winter despite the fact that the two countries are bitterly at odds over eastern Ukraine. The agreement came four months after the Russian energy giant Gazprom, the largest extractor of natural gas in the world, cut gas supplies to Ukraine, claiming Kiev's national oil company Naftogaz had not paid its gas bill of about $4.5 billion.



"The question is how you reduce the vulnerability of Russian gas disruptions," Bordoff said, adding that there is no easy answer.



Experts discussed the use of LNG import terminals to reduce Europe's energy vulnerability. Lithuania, the Baltic European country has opened a new LNG terminal and received the first LNG shipment this month and Lithuania's President announced that the Russian gas monopoly in the country is over.



Experts stressed that over 75 percent of Europe's regasification capacity is not used today. It would not be feasible for Europe to increase the use of those terminals, as LNG's higher price would cost Europe 30-40 percent more over the cost of pipelined gas from Russia, according to Bordoff.



Other options that Europe have considered include pipeline reverse flows. Europe delivered natural gas to Ukraine in the last few months through reverse flows, helping Kiev in its conflict with Russia. Riley said reverse flows was a success of European policy and was the result of investments worth $1.3 billion on pipelines and interconnectors that Europe started in 2009.



Jean Abiteboul, president of Supply and Marketing at Cheniere, a Houston-based energy company, pointed out that Turkey might be a good option to consider in the reverse flow scenario.



"Reverse flow will be a reality when you have regasification terminals in south Europe like Croatia or Turkey to move gas of different origins to the north," Abiteboul said.



"Other natural gas reserves are being developed in other parts of the world such as in the East Mediterranean and in east Africa. However, a lot of questions remain about those projects, especially in terms of high cost," Bordoff said.



The option of China supplying gas to Europe does not seem realistic either. City University's Riley said building pipelines to transport gas from China to Europe would cost $50 billion. - İstanbul