The EU must address the twin challenges of cutting its emissions by 20% from 1990 levels by 2020 while securing sufficient energy supplies for the future, in a market that is currently heavily dependent on foreign imports.
"Natural gas is gaining momentum, particularly in the area of energy generation," said Tom R. Walters, president of ExxonMobil Gas & Power Marketing.
He argued that replacing coal generation with gas could help the EU to meet its climate goals as it produces significantly fewer carbon emissions while allowing renewable energy technologies more time to develop.
Moreover, natural gas-fired generation "is well-positioned to provide the flexible supplies" that could balance the future energy system, which will be increasingly based on intermittent renewable energy generation, he added.
Walters was echoed by Peter Voser, CEO of Royal Dutch Shell, who said that gas is "affordable and abundantly available" and spoke of reserves that could last 250 years.
Furthermore, conference participants argued that the rise of unconventional gas is changing the dynamics of the sector by bringing more options to the table. In the US, shale gas production has been seized upon as a means of securing domestic supplies, but experts yesterday suspected that it would be more difficult to sell such unconventional technology to Europeans.
"We're at the beginning of a trial period," said EU Energy Commissioner Günther Oettinger. He argued that shale gas would complement natural gas but not replace it, pointing to high extraction costs and significant difficulties in persuading the European public to accept it.
Indeed, Shell's Voser predicted that securing permits would be much more problematic in Europe than in the US. He said Americans were used to having large energy infrastructure projects in their backyards, but suspected that Europeans would be less accommodating.
"I think permitting is going to be an issue and therefore we don't see [shale gas] as a major part of [the energy] mix," he said, adding nevertheless that the market would grow further in the US and China.
Gazprom calls for more gas pipelines
Alexander Medvedev, deputy head of Gazprom, spoke in ironic terms about the future of shale gas in Europe and pointed to the environmental damage caused by the industry, which he said had so far been underestimated.
Medvedev was adamant that Europe's growing demand should first and foremost be met with traditional supplies of natural gas. "A very conservative calculation shows that the gap between indigenous production and demand in Europe will be half a trillion cubic metres per year. Even if we have all together the capacities of Nord Stream. South Stream, Nabucco and ITGI, there will still be a gap. It's necessary to invest now," he claimed.
"If there is no stimulus to invest in infrastructure, the infrastructure will not simply appear," Medvedev warned.
Meanwhile, the European Parliament at large and environmetalists in particular are calling for renewable energies to form the basis of Europe's future energy supply. They are hoping that the EU's target of sourcing 20% of its energy from renewables by 2020 will be increased to close to 100% in upcoming 2050 scenarios.
However, speakers from oil and gas companies argued that while renewable energies will certainly be a key pillar of the EU's energy supply, all options should be kept open, including carbon capture and storage (CCS) technology, which can trap CO2 straight from smokestacks and bury it underground.
They stressed that the market should be allowed to determine the most competitive energy mix. A strong carbon price would make sure that carbon footprints remain low.
"We need some realism in what we can achieve in the next ten years," said the Shell CEO, pointing to problems of scale in renewable power generation.
"We know that to achieve 1% of global market share in this complex energy market, you need 25-30 years from the moment you start R&D until you enter the market," he said, pointing out that many renewable technologies still have to a long way to go before they mature.