gte autumn conference, paris, 22-23 october 2003 “the wider european energy policy perspective”...
TRANSCRIPT
GTE Autumn Conference, Paris, 22-23 October 2003
“The Wider European Energy Policy Perspective”
Address by:
Dr Ria Kemper
Secretary General, Energy Charter Secretariat
GTE Autumn Conference – Address by Dr Ria Kemper 2 22 October 2003
Introduction – The Energy Charter: Inter-governmental process launched
after the Cold War
Founded on common commitment to market-based behaviour and non-discrimination
GTE Autumn Conference – Address by Dr Ria Kemper 3 22 October 2003
The Energy Charter Treaty Signed by 51 European and Asian
states, and by EU collectively
Provides broad framework of rules on energy trade, transit, investments
Helps to reduce risks for foreign investors, with benefits for host countries, investors and transit states
GTE Autumn Conference – Address by Dr Ria Kemper 4 22 October 2003
Natural Gas Markets in Eurasia:
Gas increasingly a fuel of choice in EU, but indigenous production is declining
Consequent policy focus on addressing EU’s future dependence on external gas supplies
GTE Autumn Conference – Address by Dr Ria Kemper 5 22 October 2003
Challenges:
How to ensure security of gas supply in the long-term?
How to extend liberalisation and competition to the Wider Europe (including gas producer-states in former USSR)?
GTE Autumn Conference – Address by Dr Ria Kemper 6 22 October 2003
Why is liberalisation important outside the EU - 1? Huge long-term investments needed in
non-EU gas production areas
Liberalisation of non-EU markets will support mobilisation of investments
Especially important in Russia – where lack of competition and TPA regime has limited investment in the gas sector
GTE Autumn Conference – Address by Dr Ria Kemper 7 22 October 2003
Why is liberalisation important outside the EU - 2? : Around half of all gas produced in
Eurasia is consumed in former USSR.
Liberalised markets will:increase efficiency of consumption;stimulate investment in gas
production; andfree up extra volumes for export.
GTE Autumn Conference – Address by Dr Ria Kemper 8 22 October 2003
Therefore: EU and countries of Wider Europe have mutual
interest in establishing competitive gas market across the Eurasian continent.
Importance of long-term policy focus on: open markets transparent access to pipelines stability of cross-border transportation
GTE Autumn Conference – Address by Dr Ria Kemper 9 22 October 2003
Fundamentals:
Investments in gas projects will come from companies, not governments
Task of governments is to set the “rules of the game” and thus help minimize the investment risks
GTE Autumn Conference – Address by Dr Ria Kemper 10 22 October 2003
Example of Russia: Russian gas industry requires huge
investments over next two decades
Russia has competitors for supplying EU gas market - Norway, North Africa and LNG
Russia needs to complete domestic gas reforms and take on complementary international obligations
GTE Autumn Conference – Address by Dr Ria Kemper 11 22 October 2003
The Energy Charter Process
Map of the Energy Charter’s constituency (full members in green, enhanced observers in orange, other observers in blue)
GTE Autumn Conference – Address by Dr Ria Kemper 12 22 October 2003
But – ECT’s potential not yet fulfilled: Russia has signed, but not ratified, the
Energy Charter Treaty
Non-ratification due to opposition of Gazprom
Ratification would be fully consistent with Russia’s aim of joining WTO
GTE Autumn Conference – Address by Dr Ria Kemper 13 22 October 2003
Transit of Natural Gas:
Increasing recognition among governments of the strategic importance of transit issues, in terms of security of supply
GTE Autumn Conference – Address by Dr Ria Kemper 14 22 October 2003
Transit Problems in Eurasia:
Legacy of USSR’s demise in 1991 – unified system broken up overnight
Resulting lack of transparency over access rights and transit tariffs
Consequent lack of investor confidence in transit-related projects in post-Soviet space
GTE Autumn Conference – Address by Dr Ria Kemper 15 22 October 2003
Energy Charter Transit Protocol:
Under negotiation since 2000
Now close to finalisation – scheduled for December 2003
GTE Autumn Conference – Address by Dr Ria Kemper 16 22 October 2003
Main Features of the Transit Protocol: Supports stable cross-border flows of
energy in transit
Defines the concept of “available capacity for transit” (without imposing mandatory TPA)
Establishes criteria for setting transit tariffs throughout Eurasia
GTE Autumn Conference – Address by Dr Ria Kemper 17 22 October 2003
What does the Protocol offer - 1?For investors in CIS countries:
Clarity over terms of access to Gazprom’s network for non-Russian gas
Transparent rules governing tariffs, once access is granted
GTE Autumn Conference – Address by Dr Ria Kemper 18 22 October 2003
What does the Protocol offer - 2?For Russian gas producers:
Prohibits “Unlawful Taking” of gas in transit
Defines “Available Capacity” taking into account legitimate interests of gas producers who also own/operate pipes
GTE Autumn Conference – Address by Dr Ria Kemper 19 22 October 2003
Transit Protocol will not:
Interfere in commercial decision-making processes
Determine which projects involving transit should go ahead, or which geographical routes should be selected
GTE Autumn Conference – Address by Dr Ria Kemper 20 22 October 2003
Role of the Energy Charter Treaty and Transit Protocol:
Complementary to the EU-Russia bilateral energy dialogue
Multilateral rules, especially on transit, will increase in global importance in future years
GTE Autumn Conference – Address by Dr Ria Kemper 21 22 October 2003
SUMMARY: Gas supply security is dependent, in part, on
extending competitive market principles
Need to focus on minimising risks associated with gas production and transportation
Secure framework of investment and transit rules is a key element in this respect
Bilateral cooperation should be complemented by a multilateral approach
GTE Autumn Conference – Address by Dr Ria Kemper 22 22 October 2003
Producer-Consumer Dialogue: Liberalisation still perceived as a threat
to producers’ interests
Role of long-term supply contracts likely to change over time
But security of demand for natural gas should be stronger within a liberalised market
GTE Autumn Conference – Address by Dr Ria Kemper 23 22 October 2003
Conclusion: Producers have a legitimate stake in the
EU gas market’s development
EU governments therefore need to use all channels – bilateral and multilateral – to develop energy dialogue with producer countries