CEDIGAZ Seminar

VIEWS FROM THE CEDIGAZ 2024 SEMINAR

SHIFTING THE FOCUS ON GAS DEMAND, HARD TRUTHS AND BOLDER ADVOCACY

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Pragmatism, optionality and communication were the words of the day at Cedigaz’ traditional annual seminar held in Paris on June 20th. Members of the European gas industry and overseas producers say these are badly needed to make long-term plans, ensure energy security and a ‘just’ energy transition. More than two years after the unprecedented energy crisis sparked by Russia’s invasion of Ukraine in February 2022, the list of challenges is not short: worsening global macro-economics, industrial demand destruction, chaotic global geopolitics, the imperative to fight climate change, and the necessity for Europe to boost its economic competitiveness and stem the tide of populism that has been fueled by higher food, energy and costs of living.

Political Uncertainty

The event, which brought together more than 70 delegates active across the gas value chain, was dominated by bittersweet feelings. The fact that Europe managed to avert major energy blackouts and worst-case scenarios after the war in Ukraine broke out demonstrated its capacity to respond to reduced Russian gas pipeline supplies.

But this was not without record prices spikes and wider socio-economic damages, from job losses at industrial sites in Europe, to costs incurred by poorer nations in emerging markets who could not afford to pay record LNG prices and turned to coal and oil for their own energy security.

2023 SEMINAR: VOLATILITY, ENERGY TRANSITION

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This year, the traditional Cedigaz Annual Seminar held on 29th June coincided with a time of apparent respite for the European and global gas markets. Europe managed to avert a major supply crisis last winter, stocks are high, and storages could be full by September, and gas and LNG prices have softened from record breaking levels in 2022. But as stated by Cedigaz’ newly appointed chairperson Mickaele Le Ravalec in her opening speech, supply fears remain very much alive for the winters to come, underpinning continued tensions and price volatility risks across global gas and energy markets.

These risks are compounded by increased pressure to accelerate the energy transition, to reduce Europe’s dependence on Russian gas, as well as to drive energy efficiency and savings.

European gas participants stand therefore at a crossroads of multiple, greater uncertainties encapsulated in the perennial trilemma of ‘Decarbonization, Affordability and Security’.
Carving a medium to longer path is proving more difficult for the gas industry. But discussions during the seminar also warned against a euro-centric view of the energy crisis. Indeed, the repercussions of last year’s energy crisis into global markets are still unfolding through relentless inflation, industrial demand destruction, currency and liquidity crunch, as well higher fuels and food prices in developing countries.