Top decision makers and internationally renowned experts came together to share their insights and perspectives on current and future gas prices at the latest CEO Roundtable held by the Al-Attiyah Foundation. At the event, held on the 12th of September in Doha and moderated by the acclaimed broadcaster, Eithne Treanor, captains of industry discussed the reasons behind the jump in gas prices and the events that could see them come crashing down in the future.
The roundtable, titled ‘Looking at the Supply of Gas in the Short to Medium Term’, featured distinguished speakers; Hiroshi Hashimoto the Head of Gas Group at the Institute of Energy Economics Japan (IEJ), Anne-Sophie Corbeau a Global Research Scholar at the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs, Jeffrey Moore the manager of the Asian LNG Analytics Group at S&P Global Platts, and Giles Farrer the head of LNG and Gas Asset Research at Wood Mackenzie.
The COVID-19 pandemic caused a huge drop in demand for all fossil fuels, in 2020. The cost of a barrel of oil, for a brief moment, fell below zero because storage tanks were full due to the lack of demand. However, towards the end of the year and into 2021, the prices started to rise as offices and industries reopened and holiday makers started to travel again.
Prices surged in February this year, after the Russian invasion of Ukraine. European governments looked for ways to import less energy from Russia, which had previously supplied 40% of the gas used in the European Union. Prices for alternative sources of gas went up as a result.
In addition to the pressures of ending reliance on Russian gas, there have been parallel short-term fears that Russia could further restrict or even stop gas supplies, in retaliation for military assistance to Ukraine. Further pressure comes from Gazprom, Russia's mostly state-owned energy provider, which has suspended gas deliveries to Bulgaria, Finland, Poland, Denmark and the Netherlands over non-payment in roubles.
European gas prices are now about 10 times higher than their average level over the past decade. In February 2021 UK gas was trading at 0.38 GBP per therm (a measurement of gas consumption). In August 2022, it reached 5.37 GBP per therm.
Despite soaring electricity and heating bills for consumers across the world, experts at the CEO Roundtable speculated that the war in Ukraine could accelerate the clean energy transition and reduce the dependence on imports of natural gas in the coming years, pushing prices down.
In March, the EU said it would cut its dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies well before 2030. To do this, it drafted the REPowerEU, an ambitious 210 billion EUR plan to “speed-charge” the Green Deal, as European Commission president Ursula von der Leyen said at the May launch of the blueprint. Under the plan, renewable energy should make up 45% of the EU’s energy needs by 2030, up from around 22% in 2020. To achieve that target, the approval process for wind and solar farms will be accelerated, ending bureaucratic delays that can sometimes stall projects.
His Excellency Abdullah bin Hamad Al-Attiyah, Chairman of the Board of Trustees at the Al-Attiyah Foundation and former Minister of Industry and Energy of Qatar said the CEO Roundtable topic was timely and highly important for the global population.
“It was wonderful to see so many distinguished individuals at the third Al-Attiyah Foundation Roundtable of 2022 to discuss such a pertinent issue. The spike in gas prices has dominated news stories this year and to gather insights from experts and key players in the industry was eye-opening to all that attended the event.”
“The current situation highlights the need for greater trust and cooperation between producers and consumers. With more productive dialogue between all parties, we can ensure a stable market policy is maintained and, consequently, the supply of gas is further secured going forward.”
To learn more on the rise and potential fall of gas prices and to keep up to date with the latest energy and sustainability news visit the Al-Attiyah Foundation website at http://www.abhafoundation.org.