Dieter Helm, professor at the Oxford University and chairman of European Commission Roadmap 2050 ad hoc Advisory Group, sees the shale gas revolution as an incoming energy market “seismic shift”.
The recently published “Energy Roadmap 2050”, presents policy challenges for the decarbonisation of the energy sector in Europe, while preserving the competitiveness of industry and strengthening energy security.
The document defines gas as “critical for the transformation of the energy system,” acknowledging that gas power stations “have lower upfront investment cost, are rather quickly built and relatively flexible in use.”.
In each of the seven scenarios presented in the Roadmap, gas – along with renewable sources – is named a “critical energy source” for the next forty years.
Speaking at the “Shale gas and the future of EU energy and climate policy” conference in Warsaw, Helm predicted, that gas would be a future fuel of choice.
Helm said that questions like: “Will the shale gas happen worldwide?”, should be replaced by discussions about how big shale gas production will be.
He pointed also to conventional reserves of gas in and around Europe, calling them “enormous”.
“We have Norwegian gas, much greater than people imagined (…) North of Norway you hit big numbers”.
Helm mentioned another potential source of hydrocarbon riches: the Arctic.
“When you look at the Arctic, this is a large image of shallow sea that has enormous reserves. When ice goes it reveals even more fossil fuels.”
The speaker cautioned that Europe should be treated just as a part of an emerging global gas market. “Seismic shift is just not in Europe” – he underlined, pointing out to the example of unconventional gas resources in North America.
“The fact that America as a whole may be independent – is an enormous change!” – exclaimed Helm, adding that in his opinion the Middle East had already became irrelevant for the United States and the transformation constituted “the new context” for the global economy and politics.
New context in Europe
Helm observed that the problem of the energy security in Europe is still bonded with Russia, which in his opinion is “extremely good in dividing and ruling”.
The EU advisor pointed to the example of the special relationship that exists between Moscow and Berlin, which often finds itself taking position contrary to what is viewed as in the best interests of the EU in general.
However, the Oxford professor pointed to the market dynamic beyond the control of Russia: Caspian supply, the emergence of Turkey as a serious power and shale gas.
“We have shale gas in Europe. In terms of the rock structures, almost everywhere in Europe.” – said the EU expert, though warning that exploration was in very early stages and significance of this resources would remain unclear for some time.
On the other hand, the very possibility of a new source of production has already influenced the market.
“Just the physical existence, is a constraint to what others can do. This changes a security game.”
Professor pointed out to the advancing globalization of the LNG market and rising competition to pipelines.
Old and new theories
Helm also called into question conventional Peak Oil Theory.
“Conventional view on security of supply is we`re declining now and because oil price is going to go up, gas is going to be linked, so it`s going up too. And renewables are going to be cheap comparatively.” – he explained.
“Unfortuntely peak oil theory is a nonsense” – said Dieter Helm – “The problem is not too little oil, gas and coal but too much of them. Prices are going up – this is totally wrong.”
Chairman of Roadmap 2050 ad hoc Advisory Group supports the idea of using gas as the fastest and most solid bridge to the decarbonized future.
“You have to ask: is there a better way of attacking the issue? Is there a way of cutting increasing coal burn quickly? Yes, there is– it`s called gas.” he said.
It`s still carbon, but of less magnitude.”