Transatlantic Energy Governance Dialogue (TEGD)—The “Shale Gas Revolution”—Implications for International Gas Markets and European Energy Security

May 4, 2011

4 May, 2011, Budapest—Organized jointly by the Department of Public Policy at CEU, the Global Public Policy Institute, the Brookings Institution, and supported by the European Commission, the Norwegian Embassy in Budapest and Drager Foundation, TEGD will bring together professionals from all sectors (governments, NGOs, business, media, think tanks, universities) in order to promote constructive debate on energy security issues in natural gas. The conference will explore and discuss the transatlantic dimension of the shale gas ‘sea change’ and the governance challenges that now emerge from changing energy markets and geopolitics. The working group sessions of the second day will provide the opportunity for participants to break into smaller groups and dig deeper into specific issues.

Location:        Auditorium, Central European University (CEU), Budapest V., Nador 9

Time:              2.00 p.m.-5.00 p.m.

Date:               Thursday, 12 May 2010

  • Please note that the second day of the conference (13 May), is NOT open to the public.
  • Please note that registration is compulsory (at rulli@ceu.hu).

The keynote address will be delivered by Nick Butler, Chair, King’s Policy Institute, King’s College London/Former Group Vice-President for Strategy and Policy Development, BP, and will be moderated by Wolfgang Reinicke, Director, Global Public Policy Institute. The panel session, with Andreas Goldthau, Associate Professor in Public Policy, CEU, acting as the moderator, will include Melanie Kenderdine, Executive Director, MIT Energy Initiative; Cho Khong, Chief Political Analyst, Shell; Paul Stevens, Senior Research Fellow Chatham House, London/ Emeritus Professor, University of Dundee; and Laszlo Varro, Head of Gas, Coal and Power Markets Division, International Energy Agency.

For further information and registration, please contact Ildiko Rull, Press and PR Coordinator at CEU

on 327-3800 or rulli@ceu.hu

Notes for Editors:

Gas markets have seen major changes within the last five years. Faltering demand, caused by the ongoing financial and economic crisis, coincided with supply increases in unconventional gas, notably due to soaring shale gas production in the United States. This resulted in major shifts in the natural gas landscape and may have important implications for energy contracts, energy market structures and energy security in natural gas.

In Europe, re-directed cargoes of Liquefied Natural Gas (LNG)–initially destined for the now-saturated US market–hit deeply depressed demand in late 2008. As a consequence, gas markets turned soft, replacing a prevalent sellers market that had given considerable (market) leverage to gas exporters such as Russia during the first half of the last decade. Now, long-term take-off contracts are being reconsidered, giving way to short-term arrangements and spot market transactions. Further, feeling the heat from its Western European customers, major exporters to Europe partially started using much lower spot prices as reference points instead of the common oil price peg. Finally, Russia, the once dominant supplier, is consistently loosing market shares on European consumer markets. These shifts have led several observes to call shale gas a ‘sea change’ in European energy security.

Globally, gas markets are likely to integrate more deeply. To date, natural gas has very much remained a regionally traded commodity, a result of the difficulty and cost of transport, with natural gas trade remaining by and large restricted to the Atlantic Basin (including Europe) and Asia-Pacific region. Recent developments however suggest that spot prices (eg. on Henry Hub in the U.S.) tend to increasingly influence market developments in other world regions (e.g. NBP in the UK), a result of enhanced LNG trade. More integrated markets may offer opportunities in terms of liquidity and pricing; however, they may also entail new risks.

Such risks may include increased price fluctuations stemming from more volatile spot markets, emerging possibilities to at least partially cartelize globalizing gas markets and incentive problems for investment in key producer countries. In sum, the changing structure of the international gas business is both raising a number of critical political and economic challenges that require careful attention, not at least by the Atlantic alliance.

 

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