The Warsaw Voice » Business » Monthly - June 29, 2015
Central Europe Energy Partners
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U.S. Gas Exports to EU: A Win-Win Situation
More open energy trade between the United States and the European Union could benefit both sides: American companies would acquire stable business partners, while European consumers would benefit from more diversified and competitive energy markets, said Paweł Olechnowicz, Chairman of the Board of Directors at Central Europe Energy Partners (CEEP), after the first Europe-U.S. LNG Roundtable, which was held in Brussels May 27-28.

If the EU wants to import liquefied natural gas (LNG) from the United States, it needs to have the infrastructure in place. LNG facilities cannot be built overnight. What is needed to make the EU ready for such imports in terms of infrastructure?
We definitely need to enhance our LNG receiving facilities and gas pipeline infrastructure. At the moment, none of the existing LNG import terminals is in a position to fully serve the vulnerable flanks of Europe, which, in particular, need diversification of energy supplies. That is why CEEP strongly advocates a holistic approach to this challenge. We believe that the key to the continent’s energy security is the North-South Corridor of pipelines and interconnectors, bringing together new and existing LNG terminals. The North-South Corridor would integrate the different and still largely separate economies between the Baltic, Adriatic, and Black Seas. This would allow gas and other resources to flow freely wherever needed, increase energy security, and benefit consumers.

Energy security is a worldwide problem. We are all dependent on the global gas market, just as we are with oil. How do you think the U.S. could help the EU face some of the key challenges in this area?
The U.S. has always been an active player on the global energy market. However, in the past America played this role from the position of a massive oil and gas importer. Now the roles have shifted. The U.S. can produce more natural gas than is needed domestically, and this situation is likely to last for many decades. At the same time, Europe is aiming to hedge itself against the risk related to having a single supplier and resolve the problem of the general undersupply of gas in the region. We, therefore, see that there is a strong potential for a win-win situation in which American companies would gain stable business partners, and European consumers would benefit from more diversified and competitive energy markets.

How would lifting the ban on U.S. gas exports benefit the EU economy?
Let me underline that both the U.S. and the EU could benefit from a more open energy market. From the European point of view, we would undoubtedly welcome more players in our gas supply market in order to strengthen competition. Importantly, our aim is not to eliminate anybody from this market. On the contrary, the only way to make the European market more efficient and more resilient is to encourage competition. At the same time, free trade would enable the EU’s refiners and chemical companies to gain access to competitively priced crude oil and gas. That is a huge advantage, especially given that the disparity between the U.S. and the EU in terms of energy prices is very substantial.

Do you see the potential for a U.S.-EU gas partnership in the context of the TTIP negotiations? Do you think this agreement could accelerate American gas exports to Europe?
It seems the TTIP may serve as a strong stimulus towards lifting the export ban on U.S. crude oil and natural gas. This policy started in the U.S. more than 40 years ago in a totally different macroeconomic and geopolitical environment. We see that today the ban is outdated, as you cannot keep ignoring the global nature of energy markets. The international implications of the export ban harm broader American interests. Energy security is a worldwide problem, not one faced solely by the U.S. or the EU. We are all dependent on one another in this market.

Central Europe Energy Partners (CEEP) represents the interests of energy and energy-intensive companies from Central Europe in order to strengthen the region’s energy security as part of a common EU energy and energy security policy. CEEP is the first major body to represent the region at the EU level. It is an international non-profit association with its headquarters in Brussels and a branch in Berlin.

By combining its capabilities and experience and enhancing cooperation between energy and energy-intensive companies and research institutions, CEEP identifies and addresses common problems and proposes solutions, while facilitating successful implementation of the EU’s energy and energy security policy. Furthermore, CEEP takes an active part in the process of creating EU laws for the energy sector. Roughly 70 percent of these laws are determined at the European level.

CEEP currently has 25 members representing the energy sector, energy-intensive companies (dealing with coal, gas, oil, electricity generation and transmission, renewables, steel, chemicals, etc.), universities and scientific institutions. The organization covers Croatia, the Czech Republic, Lithuania, Poland, Slovakia, Romania, and Ukraine. Its member companies have over 50 billion euros in annual revenue and over 300,000 employees. CEEP’s nonprofit status underlines the organization’s independence and transparency as one of the most important stakeholders within the EU’s energy and energy security policy areas.