blue fuel

gazprom.com

blue fuel

coNteNt

01

02

03

04

05

the eNviroNmeNt:

oNe of our priorities

Alexei Miller. Chairman of the Board, OAO Gazprom

eNsuriNg a secure, reliable

aNd “greeN” supply of the

blue fuel

Alexander Medvedev. Deputy Chairman of OAO Gazprom Management Committee

and Director General of OOO Gazprom Export

gaZprom group:

coNcerN for ecology

Aleksandr ISHKOV. Doctor of Chemistry, Professor. Deputy Head of OAO Gazprom’s Gas Transportation,

Underground Storage and Utilization Department and Head of the Energy Conservation and Ecology Department

carboN tradiNg as a tool

for low carboN solutioNs

aNd the role of gm&t

Vitaly Vasiliev. Chief Executive Officer of Gazprom Marketing & Trading London

eNviroNmeNtal protectioN

policy – ecoNomic

structural policy

Klaus Töpfer. Professor and Honorary Doctor of Science

06

07

08

09

10

11

12

13

Natural gas, the ideal fuel

to help develop reNewable

eNergy sources aNd eNable

coNstructiNg buildiNgs

with very low fuel use

Marc Florette. Research & Innovation President Gaz de France

New busiNess

growth opportuNities

for statoilhydro

Margareth Øvrum. Chief Executive Vice-president for the Technology & New Energy business area

the geopolitics of gas

iN europe

Philippe Copinschi. French Expert

the baltic sea: aN ecosystem

uNder pressure

Olof Lindén. Professor Sweden

fiNaNcial turmoil

aNd the impact oN eNergy markets

Coby van der Linde. Clingendael International Energy Programme (CIEP), The Netherlands

italy: some 570,000 Ngvs iN 2008:

a europeaN record iN the Natural

gas vehicles market that will

be iNcreased iN 2009–2010

Sergio A. Rossi. Italian analyst

why are so maNy italiaN

motorists switchiNg to gas?

Angelantonio Rosato. Italian journalist

ecology aNd oil-aNd-gas

productioN iN the arctic

Anatoly Dmitrievsky. Academic at the Russian Academy of Sciences (RAS), Director of the Oil and Gas Research Institute of the RAS

Vyacheslav Maksimov. Deputy Director of the Oil and Gas Research Institute of the RAS


the

eNviroNmeNt:

oNe

of our

priorities

Alexei Miller

Chairman of the Board, ОАО Gazprom


As one of the world’s largest energy companies, Gazprom

not only strives to attain the highest production efficiency, but also to use

natural resources wisely in order to protect the long-term sustainability

of the environment. One of Gazprom’s firm priorities is to preserve the

environmental sustainability.

We have a wide-ranging number of environmental goals, including

being particularly attentive to the environment in areas where our

gas industry operates, and using natural resources in a sustainable manner.

We work hard to ensure a safe environment for hydrocarbon exploration,

transportation and storage, as well as creating a safe and healthy

working environment for our employees.

With natural gas being the most environmentally-friendly

fossil fuel available, Gazprom has a minimal impact on the environment.

We nevertheless continue our efforts to decrease this impact even further.

We implement energy-saving and environmentally-friendly technology

annually and are constantly improving our environmental management

system. This requires substantial financial investments. In 2007,

Gazprom spent more than twelve billion rubles on environmental protection.

That same year, capital investment in environmental protection was

1.5 billion rubles.

This large-scale financial backing allows us to fulfill our

goals in an efficient manner, carry out short-term and long-term plans

while abiding by internationally-recognized regulations and rules for rational

natural resource management and environmental protection.

Gazprom’s environmental management system took many

years to create. At present, it unites more than two thousand environmentalists

working in practically all research and development areas. In

2007, Gazprom created an ecological inspection group and a committee

for coordinating environmental protection issues in order to enhance the

existing system. An independent audit of Gazprom’s environmental management

system, completed in 2007, endorsed the efforts made to abide

by environmental legislation. The conclusions of this audit confirm that

Gazprom continues to perfect its environmental management system in

order to be certified as compliant with the standards set by the International

Standardization Organization (ISO) 14001.

Gazprom’s environmental protection measures are monitored

through a system for industrial environmental controls. Control

gauges installed on emission sources record information that is consoli-

dated and analyzed together with the pollution data from the surrounding

areas where the company’s operations are located. This allows us to be

extremely confident in naming the causes for higher-than-usual amounts

of pollution and in determining the source(s).

Efforts to save energy around the world are a part of Gazprom’s

general policy. Increasing the efficiency of using natural gas,

electricity, thermal energy and various types of fuel during production

helps achieve energy conservation.

Energy saving is a relevant issue, primarily because of the

significant volumes of fuel resources used for gas extraction, transport,

processing and storage, due to the fact that production has to

be moved to areas which are increasingly further away from consumers.

Energy conservation, particularly with regards to decreasing gas

usage and loss during processing, will allow us to significantly lower

emissions.

The Gazprom Energy Conservation Program 2007–2010 is

testimony to the importance of the environment within the company’s operations.

Through this program, we aim to save 9.3 billion cubic meters of

natural gas, 1175 million kilowatt hours of electricity and 1294 thousand

Gcal of thermal energy in three years. The program will cost 8.5 billion

rubles but will allow savings of 16.4 billion rubles.

Gazprom does not stand at the sidelines, but gets actively

involved in other sectors too. Automobiles are known as one of the main

sources of environmental pollution. For Gazprom, a supplier of the most

environmentally clean fossil fuel available, not to address this problem

would just not seem right. Natural gas is currently the best-placed energy

source to replace gasoline. Natural gas has numerous advantages

compared to gasoline, the main ones being that it is clean-burning and

affordable.

Today, a fleet of over 9.5 million cars run on natural gas

which constitutes just a fraction of the total transportation fleet. Gazprom

is making efforts to increase this figure, amongst other by coordinating

a program called Developing the Network of Natural Gas

Gasoline-Stations and Cars Running on Natural Gas 2007–2015. This

program calls for building 200 gasoline stations which would offer

compressed natural gas, equipping all gasoline stations on federal

and regional roads with natural gas fuel supplies and thus decreasing

CO 2 emissions by 960 thousand tons per year. We welcome inter-

8 9


national efforts like the Blue Corridor project in Europe, designed to

help having freight transferred on vehicles that run on compressed

natural gas.

Just as in any other sphere, people working on ecology issues

must be professionals. Systematic educational courses for managers

and specialists aiming to increase their qualifications in the environmental

fields seem the way forward to ensure an adequate skill

level. Gazprom is also doing its part in this area. Gazprom’s continuous

vocational education system includes the scholarly research center for

advanced training at the Gubkin Russian State Oil and Gas University in

Moscow, the Industrial Research and Development Training Center in Kaliningrad,

and the Gazprom Corporate Institute.

Gazprom takes an open approach to working on environmental

sustainability. We are willing to share our knowledge and achievements

with anyone who may find them interesting or useful. We are active

participants in Russian and international fora, conferences and exhibitions

where we present the environmental aspects of our work and aspire

to learn from our colleagues.

In 1995, we were one of the first in Russia to adopt our own

environmental policy. In 2008, an amended and advanced policy was approved.

Gazprom’s responsibilities on preserving the environment and

on environmentally-safe production, along with its ecological and social

obligations, are becoming ever more important as the company grows internationally.

There is a direct correlation between our company’s stable

growth and new ways of using natural resources and preserving the environment

for future generations.

10


eNsuriNg

a secure,

reliable

aNd “greeN”

supply

of the

blue fuel

Alexander Medvedev

Deputy Chairman of OAO Gazprom Management Committee

and Director General of OOO Gazprom Export


Natural gas is the cleanest hydrocarbon fuel known today.

At Gazprom, we are dedicated to ensuring that natural gas is produced

and transported in an environmentally-friendly and reliable way.

It has been the cornerstone of our business for nearly 40 years, and

is central to our long-term goal of securing the world’s energy and

environmental future.

According to the International Energy Agency (IEA), European

imports of natural gas are expected to “rise continuously to

more than two-thirds by 2030.” With regard to the United States, the

Department of Energy estimates that natural gas consumption in the

U.S. could increase from 634 billion cubic meters in 2004 to 733 billion

cubic meters by 2015, a jump of over 15%.

Our company is prepared to meet this growing demand.

Russia possesses one third of the world’s known natural gas reserves,

and currently one-quarter of the world’s production. Gazprom is the largest

Russian company in the natural gas industry, with 60% of Russia’s

proven reserves, 85% of its production, and 98% of its gas transportation

network. Under Russian law, Gazprom has the exclusive right to export

gas, which makes it responsible for one quarter of world gas exports.

In producing and exporting gas to our customers in over

20 countries, we are committed to living up to our ecological responsibilities.

The main objective of Gazprom’s strategy is to ensure stable

economic growth while preserving the natural environment everywhere

our facilities operate – all the while constantly assessing the effects of

our projects on the environment.

In 2007, Gazprom spent more than 12 billion RUB to protect

the environment, an 8.4% increase from 2006. We have set up an

Environmental Inspectorate whose goal is to improve the efficiency and

mitigate the carbon footprint of companies in the Gazprom Group. In

2007, water consumption, water removal and waste of Gazprom subsidiaries

were reduced by 2–3%. Pollutant emissions slightly increased

by 1.6%, but above-level emissions were reduced by 70%.

Our work does not end here. As Gazprom expands into

new markets and diversifies its business activities, our focus will always

be on continuing the reliable, secure supply of natural gas, and

ensuring that the “Blue Fuel” is as green as possible.

14


gaZprom

group:

coNcerN

for

ecology

Aleksandr Ishkov

Doctor of Chemistry, Professor.

Deputy Head of OAO Gazprom’s Gas Transportation,

Underground Storage and Utilization Department

and Head of the Energy Conservatio

and Ecology Department


In September, 2008, the Management Committee of OAO

Gazprom adopted a new ecological policy for the company.

Gazprom has always contributed to the improvement of

the ecological situation not only in Russia, but also in European countries.

The large city of Moscow as well as many major industrial cities

of Russia experienced a dramatic improvement in the 1980s when they

switched from coal and fuel oil to natural gas.

The first supplies of gas to Germany resulted in a significant

decrease in hazardous emissions from thermal stations and power

plants, and then in a decrease in greenhouse gas emissions. Today, it

is impossible to imagine the cities of Germany, Austria, Italy and other

countries with a high quality of life without Russian gas. We’ve always

thought of ourselves not only as a supplier of energy, but of cleaner air

as well. This is why Gazprom declares the principle of sustainable development

as its basic operating principle.

The basis of our company’s strategy may be briefly described

as follows: dynamic economic development alongside optimal

rational use of natural resources and the maintenance of a favorable

environment for future generations.

Cost-effective resource use and energy efficiency are the

main components of Gazprom Group’s ecological policy. Every year, the

company reduces its own use of natural gas for its technological needs

and the losses of gas during its extraction and transportation by 3–5%.

After the ratification of the Kyoto protocol, Gazprom was among the first

Russian companies to begin tracking greenhouse gas emissions. We

adopted a specific energy-saving program which will make it possible to

decrease greenhouse gas emissions by 165 mmt until 2012.

It will allow an additional annual export of 55 bcm of Russian

gas to European countries, which will increase the share of natural gas

in the energy balance and will be a significant help to Europe in meeting

its obligations under the Kyoto protocol. The Nord Stream project is the

most environmentally friendly way to supply Russian gas. Transporting

gas to Germany through the underwater pipeline will produce only 1.47

mmt of СО 2 compared with 2.06 mmt if it were transported overland or

14.48 mmt if it were transported in LNG form.*

The parameters for the planned South Stream sea pipeline

are similar. Alongside renewable energy sources, using Russian gas

transported through a system of pipelines is in effect the only way to

implement the ambitious plans to decrease greenhouse gas emissions

in Europe by 2020.

Beside the energy sector, the ecological situation is

greatly affected by the transport sector. The Gazprom Group is actively

working towards the conversion of various types of vehicles to natural

gas. In Russia, the price of gas for automobile transport is 2–2.5 times

lower than the price of petrol. Gazprom’s program envisages the construction

of 200 gas filling stations in Russia, which will make it possible

to decrease emissions of toxic substances by almost 1.5 mmt,

while automobiles using natural gas will reduce greenhouse gas emissions

by 25%.

In June, 2008, Gazprom Management Committee’s Chairman

Mr. Alexei Miller proposed to European shareholders of OAO Gazprom

a project to create a large-scale network of automobile gas filling

stations in Europe. The first stage may be the project of the “Blue corridor”

from Rome to Helsinki intended for the use of natural gas (see the

map below).

In the future, it will be possible to create such corridors

alongside European highways. This may become one more factor in

cleaning up European transport, primarily with view to trucks and buses.

As part of our ecological strategy, we constantly decrease

the negative influence of all the factors of economic activity upon the

environment. OAO Gazprom is the leader in the realization of ecological

programs in Russia.

Annual expenditures on environmental protection measures

in the extraction and transportation of natural gas amount to

about €250 million. In new projects, environmental protection measures

constitute up to 5% of their total cost.

* Taken over an operating life of 50 years, transporting gas to Germany throudh the underwater

pipeline will produce 200 million tonnes less CO 2 than if it were transported overland.

Sourse: Wintershall, 2009, Nord Stream Eco-Efficiency Analisis, January 2009, page 12

18 19


FLORENCE

BERLIN

MUNCHEN

ROME

WARSAW

HELSINKI

KALININGRAD

MINSK

ST. PETERSBURG

MOSCOW

Large-scale gasification programs for Eastern Siberia and

the Far East will make it possible to decrease the consumption of fuel oil

in these regions and reduce greenhouse gas emissions by 25–30 mmt

a year by 2020. The planned decrease of toxic substance emissions is

very important for the delicate and unique ecological systems of Siberia

and the Far East.

By 2011, OAO Gazprom and its associated companies

(primarily its subsidiary OAO Gazprom Neft) will increase the use of associated

petroleum gas and low pressure gas to 95%, thus nearly ending

the practice of gas flaring.

The Gazprom Group has established a special company to

tap the gases of the Kuzbass coal beds, which will significantly improve

the ecological situation in the region through the use of the extracted

gas in public utilities and the transportation sector.

Gazprom employs a lot of ecological experts. We place

great importance on cooperation with Russian and international nongovernmental

organizations. All of Gazprom Group’s projects are sub-

ject to public consultations on different levels. During the earliest design

stages, the opinions of international and regional ecological organizations

are taken into account.

By combining the economic and ecological advantages of

natural gas, OAO Gazprom strives to become not only a global energy

company but also a leader in the quest for sustainable development.

20 21


carboN

tradiNg

as

a tool

for low

carboN

solutioNs

aNd

the role

of gm&t

Vitaly Vasiliev

Chief Executive Officer of Gazprom

Marketing & Trading London


Growing scientific evidence of the impact of human activities

on climate change and a high economic price which may be

paid by communities for inaction led governments to come up with

an international regime aimed at combating the adverse conditions

of climate change. Resulting carbon trading activities prompted the

development of a new environmental market, which is expected to

be valued at €400 billion by 2012.

The Kyoto Protocol, which established the market rules,

came into force in February 2005. The major feature of the Protocol

is that it sets mandatory emission reduction targets for signatories,

ranging from -8% to +10% of countries’ 1990 baseline emission levels.

These targets aim to reduce overall emissions by 5.2% below

the baseline during the first commitment period from 2008 to 2012.

The Kyoto Protocol incorporates three market-based

mechanisms aimed at providing flexible means of complying with

carbon reduction targets. These are: i) International Emissions Trading,

ii) Clean Development Mechanism (CDM) and iii) Joint Implementation

(JI). These mechanisms were designed to help identify

the lowest-cost opportunities for reducing emissions by allowing

investment into countries where abatement costs per tonne of CO 2

are cheaper than in industrialised countries.

CDM helps developing countries to achieve sustainable

development by permitting industrialised countries to finance

emission reduction projects in developing countries. JI works in a

similar fashion, except the investment is made in a country that has

a binding emission reduction target. Additionally, a JI country willing

to participate in carbon trading activities should fulfil certain eligibility

criteria to ensure accurate calculation and recording of all

carbon emission reduction units. Those units are recorded in the

national registry and deducted from a JI country’s assigned amount

units (AAUs).

eu ets and PoweR sectoR

Demand for carbon credits is largely driven by the European

Union Emissions Trading Scheme (EU ETS), which is the

largest cap-and-trade system worldwide. A large proportion of the

most carbon intensive installations corresponding to 45% of total

CO 2 emissions in the EU have received a free allocation of allow-

ances (EUAs) which consequently cap the amount of CO 2 that may

be emitted into the atmosphere. Given that energy production and

consumption is responsible for just over 80% of total EU-25 greenhouse

gas emissions, the power sector shows the highest need for

offsetting emissions, either by switching to a lower carbon fuels

such as natural gas, or introducing energy efficiency measures at

installation, reducing energy consumption and, hence, CO 2 released

into the atmosphere.

Alternatively, they could purchase additional emission

reduction units to fulfil their compliance up to the limit permitted by

each Member State. Generally speaking, carbon prices are affecting

investment decisions by power generators going forward both

in terms of wanting to burn clean fuel efficiently and diversifying the

technologies used.

Russia and the Kyoto PRotocol

Ratification of the Kyoto Protocol by Russia has so far

been the biggest milestone in world action against climate change

and is by far the most significant achievement of modern environmental

politics, economics and law. To come into force, Kyoto needed

to be ratified by developed nations that account for at least 55%

of global greenhouse gas (GHG) emissions. After the USA pulled out,

that figure could only be reached with the support of Russia, which

accounts for 17% of world GHG emissions. Ratification by Russia was

therefore critical in making the aspirations of Kyoto legally binding.

Russia’s individual target under Kyoto is to maintain

GHG emissions at 1990 levels up until 2012. However, years of economic

decline and collapse of the USSR has resulted in Russia’s

current emissions being lower than 1990, creating a surplus of AAUs

more commonly known as “hot air”.

Russia’s surplus, without any further measures and policies,

stands at 5.4Gt over the Kyoto period. It means that if Russia

continues emitting more GHG that it currently does, it is still likely

to comply with 1990 levels by 2012. However, this surplus could be

quickly “eaten up” by the developing economy, leaving no room for

manoeuvre in the future. Given that energy use per unit of GDP in

Russia is estimated to be at least three times greater than for EU-15,

Russia should be promoting energy savings and creating economic

24 25


incentives for Russian businesses not to waste energy resources.

Therefore, financial resources should be attracted to Russia through

the JI mechanism as they would promote implementation of low carbon

technologies and environmentally friendly industry practices.

the Russian Ji PRoJect PiPeline

On 28th May 2007, the Russian government adopted

the first set of provisions able to allow approval of JI projects and

trading of carbon credits. However, those set of provisions have not

been put into practice so far as no approval has been granted by the

Russian government to a JI project. As of June 20, 2008 Russia has

fulfilled eligibility requirements for trading carbon emission reductions.

However, without an operational approval system no trades

can be completed.

Despite those hurdles, the Russian pipeline now consists

of 84 projects expected to reduce emissions by 135 million t

of CO 2 e by 2012. Given the global role Russia has as the dominant

global gas supplier, it is not a coincidence that the majority of projects

both by number and by volume are gas related. Methane avoidance

at distribution pipelines tops the list with other types such as

associated gas flaring, fuel switch from coal to gas and energy efficiency

projects contributing to infrastructure upgrade and promotion

of energy saving technologies.

If 1.5 billion t CO 2 e of project-based emission reductions

are transacted on the international carbon market, the Russian

industries may receive up to 30 (billion Euro) in carbon revenues.

The carbon market players, including GM&T are closely overseeing

the development of JI market in Russia. We are certain that the Russian

government will capitalise on the opportunities offered by the JI

Mechanism and undertake all necessary steps to support and nourish

this emerging market.

GM&t’s Role in caRbon MaRKets

GM&T, as a trading arm of Gazprom, aims to maximise

the value of the supply portfolio by delivering competitive and innovative

products to our energy customers in liberalising markets.

Through our UK retail business we were the first company to offer

our customers carbon neutral natural gas. The strength of our underlying

gas portfolio provides the platform to trade across all energy

commodities. We are continuing to build a multi-commodity trading

desk offering gas, LNG, power, carbon and oil, which will boost

our competitive edge.

GM&T has a unique position to bridge carbon positions

of its customers in Western Europe and upstream CDM and JI

project opportunities, which GM&T could derive from the Gazprom

Group carbon project portfolio as well as Gazprom’s business partners

across the globe. A combination of a natural position in the

biggest JI market along with well-developed customer networks in

the countries of high Kyoto compliance demand puts GM&T in an

advantageous position to become the leading carbon market player

in the world.

We pay a great deal of attention to the development of

post-2012 negotiations, with firm belief that a consensus between

the developed and developing world will be found in order to safeguard

a sustainable future for generations to come.

26 27


eNviroNmeNtal

protectioN

policy –

ecoNomic

structural

policy

Klaus Töpfer

Professor and Honorary Doctor

of Science, Germany


1. Environmental policies, and in particular those policies

which focus on concrete and effective measures to tackle climate change,

have finally become a topic of discussion in the most important circles – they

now form part of negotiations and decision-making among heads of state

and government.

If one had to name all the spheres of German life to be declared

a “matter of national importance” in recent years, it would be a long list. Of

course the development of pensions and healthcare system spending, the

minimum wage and the availability of kindergarten spaces are all key challenges

for the future of an aging and shrinking population, which is becoming

ever more heterogeneous as a consequence of globalization and worldwide

migration flows.

But what about environmental policy? In a best case scenario, it

represents a wonderful topic of discussion for the ministers of natural resources

and economics experts, accompanied by scepticism from ministers of the

economy, business communities and even trade unions. Again and again, either

directly or indirectly, questions arise whether an environmental protection policy

might hurt a region’s industrial competitiveness. Does it not result in restrictions

for the nation’s citizens? But there is a call to only take action once all the world’s

nations become equally involved in the process, without any emphasis placed on

their dramatically diverging initial conditions. According to this populist demand,

every country represented in the United Nations must restrict its CO 2 emissions

by equal levels – regardless of whether it has spent years or even decades releasing

enormous amounts of CO 2 into the atmosphere for free, and continues

to release 20 tons of CO 2 per capita per year, or whether its per capita emissions

stand at no more than three tons per year, or whether it pollutes the atmosphere

with just one ton of CO 2 per capita per year. The above figures are the exact

actual data for the United States, China and India. One may thus conclude that

it is the emerging nations, including India and China, that keep bringing us back

to the principle adopted at the Rio de Janeiro summit in 1992: “A common, but

differentiated responsibility” which called for a global, yet locally differentiated,

approach to tackling climate change.

2. The developed nations’ argument was severely hurt by data

from the Intergovernmental Panel on Climate Change. Open to scientists

from across the world, this scientific research association, which was created

to study the causes and factors affecting climate change, presented powerful

evidence that CO 2 and other gases contained in the atmosphere are the

real cause of global warming. Global average temperatures were shown to

have risen by about 0.8°C. There is striking evidence that this relatively small

global warming has already had severe effects on the environment. This

suggests that if we are unable to halt this process, a rise of 2°C will result in

significant changes to people’s living conditions. Glaciers melting, a sharp

reduction in the amounts of polar ice, changes in vegetation, desertification,

violent weather that will become ever more frequent and severe – these are

the measurable consequences of the climate change that is already proven

to be caused by mankind.

3. Moreover, the latest scientific data confirms that the degree

of warming we have seen so far does not reflect the true extent of climate

change that has already been caused. There are also reports that air pollution

caused by particles contained in the aerosols, primarily in Asian countries

(China and India), has resulted in a slowdown of the climate change process.

Therefore, the successful clean-air policy that is so urgently needed to ensure

the health of these regions’ populations would simultaneously result in

an acceleration of the warming process itself. Taking this effect into consideration

it becomes clear that the world is already facing harmful climate gases

that may cause temperatures to rise by more than 2°C.

4. These scientific findings clearly show that the so-called

“three D strategy” is completely irresponsible:

“Deny” the facts;

“Delay” specific actions and measures;

and, consequently, “Do nothing.”

People across the world can no longer accept this strategy,

which would lead to the climate change process crossing that threshold at

which we will be able to tackle it with economically justifiable costs and technical

ability. In a detailed study commissioned by the British government, former

World Bank Chief Economist Sir Nicholas Stern calculated the critical

cost of a climate change process that has gone out of control. However, it is

essential to be conscious of the following fact: some of the damage caused

by climate change is already irreparable and needs to be minimised. The developing

nations, which are bearing the brunt of this unavoidable change,

have neither the financial nor technical means to correct it and, justifiably, are

expecting support from the industrialized nations.

5. This is evident: we cannot afford any further delays in implementing

an effective climate change policy. Certain economic difficulties cannot

warrant the delay or substantial weakening of an environmental protection

policy. However deep the effects of economic crises and critical times may be,

they are rectifiable, albeit with significant negative consequences for many

people. As we see today, an almost deliberately ruined global financial system

is being rescued with the help of the guarantees of billions of dollars. But we will

30 31


never be able to regain control of a ruined planet or a climate change process

that has gone beyond its ‘tipping point’. The effects that climate change will

have on future generations are unpredictable. Climate change will lead to the

destabilization of societies and substantial migration flows across the globe.

On those grounds, an effective and credible environmental protection policy is

a crucial instrument of preserving peace in our time.

6. A successful and consistent environmental protection policy

is necessary to safeguard people’s living conditions and their peaceful development.

An energy policy that provides the utmost support to an environmental

policy represents a highly profitable investment in the future. An increasing

demand for energy from a growing world population and global economy – an

economy that simply must undergo internal reforms that are urgently needed

to overcome poverty in the world’s emerging nations – can no longer be met by

fossil fuels such as coal, oil and natural gas alone. However at this stage more

than 70% of the world’s energy demand is met by fossil fuels.

Recent years have shown that the surging demand for energy

is significantly outpacing supplies. The latest changes in fossil fuel prices cannot

hide the fact that this correlation between supply and demand will become

even more acute in the future. This will substantially affect energy security and

competitiveness in various economies. For this reason, further global economic

growth will need a diversification of energy sources and an almost revolutionary

improvement in energy efficiency. Achieving this will be only possible with the

introduction of progressive technologies to our energy markets. Accordingly,

investment in the development and utilization of non-fossil fuels – in particular

renewable energy sources – is a prerequisite of any environmental policy. This is

equally the case for intensive research into ways to increase energy efficiency.

The focus of these studies must include energy transportation,

particularly on ways to transmit electric currents. New solutions in the area of

high-voltage direct current transmission technology are opening new prospects

for the transmission of electricity over great distances, which is currently

inefficient. Decentralized power generation places different demands

on power grids than those they have to meet today. Further, it is necessary to

increase substantially the volume of research conducted into energy storage,

particularly in batteries as well as the storage and utilization of hydrogen. In

addition, there is an emerging need to establish a direct link between the consumers

and producers of energy by using intelligent IT solutions. So-called

Smart Grid research and development projects are now a priority. They have

already reached a development level that permits large-scale pilot projects.

Their universal implementation will help save energy and cut costs while creating

new opportunities in the job market.

7. Environmentally friendly and low-carbon energy supplies, as

well as the efficient utilization of our growing energy demand, offer tremendous

prospects for the German economy. The introduction of new energy

products to the market and taking a leading role in the development of energy

saving technologies will create new areas of production and additional jobs.

The promotion of such a modernization in energy policy, focusing on supply

and demand, is an effective tool for overcoming economic crises – which will

also be of crucial importance on a global scale. It is clear that a tremendous

wealth gap still exists between people in the world. Ever since the days of

the Rio de Janeiro Summit in 1992, the ‘Rio Principles’ include the “right to

development” that applies to all societies and people across the globe. It is

essential to eliminate poverty and existing wealth inequalities if we want to

ensure our planet’s peaceful development. “Development is the new name of

peace,” Pope Paul VI prophetically noted in his “On the Development of the

Peoples” (“Populorum Progressio”) address.

The Nobel Laureates invited by Doctor Schellnhuber to the Potsdam

Institute for Climate Impact Research had every right to emphasize particularly

this two-fold challenge. It is essential to prevent further climate change,

without hindering the development of a major part of the world’s population.

Combining these two goals is the fundamental challenge for our world.

8. In order to achieve the transition from energy supplies, which

are over 70% based on fossil fuels, to low-carbon supplies, the individual energy

sources must make different contributions. It is undeniable that, of the

fossil fuels, natural gas is the most favourable in terms of the CO 2 emissions

involved in power generation. It is therefore rational to explain how carbon emissions

may be reduced by using gas in highly efficient power generation installations.

Close cooperation between the power generation industry and builders of

power plants is crucial. A transition to new levels of efficiency has already been

achieved. Further efficiency improvements are possible through the introduction

of new technologies, mainly by a consistent use of tri-generation. It should

be further stressed that in its material application, gas plays an important role in

the value creation – especially in the chemical industry. For this reason, investments

in a reliable gas supply system and the efficient utilization of energy – in

both its power generating and material use – are key to an environmental policy

in times of transition to a sustainable energy supply structure. At the same time,

gas can clearly gain added significance for clean coal technologies. The utilization

of clean coal will, if only because of its availability in fast growing developing

nations, require significant research and the development of practical technologies

in the industrialized nations. At the same time effective use of the various

fossil fuels could make an important contribution to the transition phase of our

environmental protection policy and help ensure world economic stability.

32 33


Natural gas,

the ideal fuel

to help develop

reNewable

eNergy

Marc Florette

Research & Innovation

President Gaz de France

sources

aNd eNable

coNstructiNg

buildiNgs

with very low

fuel use


In France, buildings consume 42.5% of the total energy

volume and account for 23% of greenhouse gas emissions. The housing

construction sector has a huge potential in reducing energy consumption,

and politicians are putting high stakes on reducing demand

for energy resources to provide Factor Four.

New construction is already regulated by stricter and

stricter thermal requirements, however, these requirements have only

recently begun to be applied to old buildings.

The market for repair works has especially great potential

value, as it represents 99% of stock, and 3/4 of buildings. However,

technical specifications are most essential to already existing objects,

as it is a question of not only replacing systems, but also about

strengthening building’s insulation, while simultaneously preserving

good ventilation.

Increasing building efficiency demands development of

pioneering global concepts for new construction or modernization.

In this context, Gaz de France is promoting a “bioclimatic concept”

which optimally adapts a building to its environment and promotes a

decrease in heating energy consumption and optimization of comfort

during the summer periods.

This global concept includes interaction of all building

construction chain factors which did not exist before.

The situation becomes more complicated because the

variety of energy sources existing in a building will increase. Hence it

will not only be gas and electricity, but also solar energy, that is more

and more in demand, and photoelectric solar energy to be used for

the production of electricity. All these energy sources should coexist,

reduce the cost of investments and provide good returns. If

at present, the construction of a building with very high power efficiency

means a rise in cost of 10–15%, the cost will be partially

compensated during its life cycle (i.e. construction, operation and

demolition).

An advantage-trio – meaning a building corresponding to

bioclimatic criteria, with good insulation, equipped with a highly effective

gas heating system, combined with renewable energy sources

provides an answer to forthcoming changes in French energy policy

suggested by the Grenelle Environment Round Table.

GRenelle enviRonMent

Round table PRoPosals:

a bReaKthRouGh in new constRuction

and unPRecedented scale of theRMal

ModeRnization of existinG buildinGs

Ambitious proposals of Grenelle Environment Round Table in

the field of decreasing the energy use in buildings should be realized taking

into consideration the comfort and quality of air inside the building. This

will be achieved by means of effective ventilation (in particular a dual air

stream recuperating heat from expelled air) and also acoustic qualities of

the building. Finally, it will be necessary to provide inhabitants with simple

and practical control facilities aimed at optimizing the operational cost.

There are also other requirements to support the efforts of

those involved. The regulation for thermal specifications of already built

buildings will be officially applied to areas exceeding 1000m 2 and with

modernization work exceeding 25% of the total value of the building built

since April 1998. However since July 2007 this decision concerned only

the replacement of power supply systems.

Diagnostics of energy savings are also added at the time of

the sale or rent of the real estate object. This are good means to stimulate

the tenant or to allow him or her to evaluate his building in terms of energy

savings, and also a way to supervise the level of building legislation application.

However, two conditions are added to this: updating these means

on a scientific basis with the purpose of understanding the real power efficiency

of various systems, and training how to use these various systems.

natuRal Gas: the Most efficient fuel

in teRMs of co 2 in coMPaRison with otheR

non-Renewable eneRGy souRces

In this context, natural gas provides efficiency which is required

from various points of view. First of all, this is the fuel producing least

greenhouse gases among all types of mineral raw materials used for power

generation, and it directly challenges heating by means of electricity.

Indeed, heating with natural gas generates less greenhouse

gas emissions than direct electric heating. This in fact produces a corresponding

amount of electricity generated by the French or European thermal

power stations which emit a lot of СО 2 . These power stations emit from

36 37


400g СО 2 per kW/hour (the most effective, with a combined gas cycle) and

up to almost 1000g СО 2 , in the case of coal-fired power stations.

The contents of СО 2 per kW/hour of electricity produced for

provision of the electric heating corresponds to approximately 600g СО 2

per kW/hour of electricity. For comparison, we can say that natural gas

used for heating emits approximately 230g СО 2 per kW/hour.

In addition, natural gas allows evolutionary solutions which

will take various forms in the future: condenser boilers and mixed systems

using thermal sun energy with natural gas are already widespread on the

French market; combined heaters – electric generators and gas thermal

pumps provide the opportunity for innovative solutions with a notable

increase in energy savings. All these solutions are intended for efficient

supply of energy needs at existing buildings, and simultaneously provide

answers for ambitious aims of achieving a level of efficiency proposed

within the framework of the Grenelle Environment Round Table.

condenseR boileR:

it is alReady a hiGhly effective

solution to PRobleMs in PReseRvinG

the enviRonMent

The condensation technology provides an efficiency increase

of 10–20% in comparison with traditional boilers and allows the

achievement of a very high level of standards namely HPE (High Energy

Performance), THPE (Very High Energy Performance) and even BBC (Low

Energy Consumption). The last standard was put forward by the Grenelle

Environment Round Table for year 2012 (50kW/hour/m 2 per year).

This technology, whose market share is naturally increasing

every year, answers the growing demands of consumers who are

more and more concerned with environmental problems. Its development

will not slow down in the coming few years, especially if one combines

a condenser boiler with an individual solar hot water panel for

the production of hot water for sanitation needs. Indeed, condensation

combining renewable energy sources with solar energy in particular

is very effective These technical solutions are already available on

the market. Over 300 000m 2 thermal converters of solar energy were

installed in 2006, of which 220 000 in France; this is a growth of 83% in

comparison with 2005 (source: EU-Observer) and proves the dynamic

development of the sector.

However, despite the fact that condensation technology is

already quite developed today, it needs technical improvement in two key

aspects. First is the concept of modulating heat at a lower capacity to

decrease energy use of buildings, and secondly, perfection of technical

solutions in removing combustion products in re-erected and existing

collective buildings.

electRic GeneRatoR heateR:

soon to aPPeaR on the individual

consuMeR MaRKet

Development of technical solutions with the use of natural

gas will allow moving further down the path of constructing buildings

with very low energy consumption levels. An electric generator heater,

capable of providing very effective heating with simultaneous production

of electricity is one specific example of production that will be developed

in the next few years.

The heater designed for the private market, with an electric

generator and Stirling motor develops 1kw of electricity (kWe) per 14 or

28 watt of heat (kWth). It would cover, 100% of heating and hot water supply

needs, and also a part of electricity needs for standard habitation.

Such heating devices can be wall or floor-mounted, and

provide the user with significant financial savings, allowing a reduction of

10–15% of an energy bill. As for condenser heating devices, they provide

excellent efficiency, and remain in the range of traditional tariffs and parameters.

For even greater increase of efficiency, they can be combined

with solar energy converters for the production of hot water for technical

purposes.

Two or three manufacturers have already begun this development.

They will present their models at the next international exhibition

(Interclima 2008), before releasing them on the French, German or

Dutch markets in 2009. Gaz de France heartily supports this technology

and promotes it at demonstration events. Of forty installations intended

for practical tests during the winter 2007–2008 period, eight have already

been put into operation and the clients are very satisfied.

In the long-term future, these heating installations could also

be equipped with a fuel element. This is a very effective technology however

it is still underdeveloped n in terms of costs and operational life.

38 39


Gas theRMal PuMPs: systeMs usinG

fRee-of-chaRGe eneRGy fRoM the enviRonMent

The thermal gas pump (PAC gaz) is a heating solution providing

comfortable temperatures at home, partially owing to the use of

free-of-charge energy, recuperated from the environment. This advantage

gives it first class power efficiency, with high efficiency in primary

energy, from 1.2 to 1.6, which corresponds to sizes from 3.1 to 4.2 in

efficiency equivalents of electric thermal pumps (PAC). Therefore they

will play their role in technical solutions of the future, aiming at more

power efficiency.

These products are already available in the market for public

buildings, services and the housing sector and their capacity is 20–80kw.

These products are usually reversible, and also allow comfort during the

summer period if required. Certainly, an optimized concept of a building

should include this compatibility.

As for private houses, thermal gas pumps of small capacity

– no more 10kw – are in the stage of development. They will provide an

energy saving of 20–30% in comparison with a condenser boiler. Some

builders are talking of industrial production prospects by 2010, and Gaz

de France is working on releasing these products on the French market

as soon as possible.

Unfortunately, the fact that research in the field of traditional

energy sources, carried out by power engineers and equipment manufacturers

allows significant improvements in power efficiency that results

in big savings for the consumer is not publicized often.

In particular, this research allows gas technology to derive

maximum advantage of the environmental qualities of this type of energy

accessible on the broadest scale. This brief overview of technology for

building construction shows a variety of solutions offered when using

natural gas at the time when France and the European Union have started

their fight against climate change.

40


New

busiNess

growth

opportu-

Nities

for

Margareth Øvrum

Executive Vice-president for the Technology

& New Energy business area

statoilhydro


StatoilHydro has decided to increase its efforts regarding

renewable energy sources. We already see our natural gas position

as an important bridge to provide a cleaner energy future. By

entering into renewables the main aim is to support StatoilHydro’s

growth ambition by building a profitable and scalable business also

within this energy sector.

Such engagements both leverage our competencies

and positions from the oil and gas sector, and can provide added

value to our oil and gas position by broadening and deepening our

market presence as energy producers in key consumer regions.

Renewable energy development should not be regarded

as a defensive measure, but rather as a business opportunity which

is being enlarged by the climate change challenge. It is also a fact

that the growth in the renewable energy sector has outperformed oil

and gas stocks over the last five years.

StatoilHydro’s renewable energy engagement can be

grouped into the following main categories:

Renewable power production

Sustainable fuel production

Our main emphasis is built around the areas:

Wind and offshore renewables

Sustainable biofuel

The emerging nature of many new energy opportunities

makes it difficult to “pick the winners” of the future. In order to build

our capabilities and a long term portfolio we also develop some options

in other selected areas like hydrogen, solar and geothermal.

why focus on Renewable eneRGy

The attractiveness of the renewable industry is increasing

due to its large growth potential, increasing environmental concerns

(especially related to the climate challenge and local air quality),

high fossil energy prices and concerns related to security of

supply. Even though renewable energy sources still account for a

small amount of the total global energy mix, it is a fast growing industry,

with significant value creation for investors, and also providing

an increasingly important contribution to combat climate change.

Some of the drivers for new energy – climate change,

security of supply and local pollution – also pose challenges to StatoilHydro’s

oil and gas activities. We would like a strong company

for the future realising material oil and gas developments, as well as

growing renewable energy as a new growth area – creating value for

the shareholders.

can Renewable eneRGy

oust fossil fuels?

Most new energy forms require some form of premium,

or incentives, to be cost competitive for consumers today. However,

the most developed forms of renewable energy, such as onshore

wind and bio power, are already competitive with the expected costs

of coal and gas power in many regions.

Questions have been asked about whether a “subsidised”

market is by nature inefficient. This challenge is important

to consider, but it is often a question of how much time it takes

to bring new technologies into a commercial market position. As

technology is improved and market volumes increase we have realised

strong cost reductions within both wind, bio power and solar.

As for most other industrial sectors a certain innovation stimulus

has also been required for renewable energy. Needless to say, the

cost of CO 2 will also have an effect on the relative competitiveness

of renewable energy.

The countries with most efforts within renewable energy

today are countries within the European Union as well as the US, with

a combination of strong political ambitions, mandatory targets and

a range of government incentives to bring forward the alternatives

to fossil fuels.

It should also be noted that fossil fuel markets are upheld

by heavy regional subsidies at the consumer end. Still, in order

to close the gap between cost of fossil-based energy and renewable

energy, renewable energy need to become less capital intensive

and more cost efficient (the energy cost is however normally

free!). Focus will therefore be on achieving economy of scale, technology

improvements, increased capacity of the installations, as

well as improved solutions for operation and maintenance.

44 45


consideRations

foR Renewable PoweR PRoduction

The global power demand is anticipated to grow further.

The power sector is commonly considered as the sector with the

largest opportunity to reduce greenhouse gas emissions at the lowest

possible cost, mainly due to its large single point sources of CO 2

output, with potential for both increased energy efficiency and introduction

of renewable energy.

Some of the key considerations for introduction of renewables

into the power sector includes assessments of what renewables

are available resources for the particular region – e.g.

such as wind, solar, geothermal or other? Other important issues

to consider are whether the renewable sources provide base load

or peak load energy, whether grid capacity is sufficient and at what

cost the renewable source can be phased into the energy portfolio

over time. There is a wide variation in sources and potential, and

today we can see countries like Denmark and Spain being supplied

by more than 15–20% renewable energy from onshore wind production,

whereas other countries like the UK and US have strong

growth ambitions from a small initial renewable position.

Offshore wind energy has a large potential and is a rapidly

growing business. It is expected to be one of the most important

tools for achieving Europe’s goal on CO 2 emission reductions in the

power sector. The main challenge to offshore power production is to

bring the costs.

StatoilHydro’s ambition is to become a leading offshore

renewable energy provider based on a unique technology

position. Offshore power production is based on our core offshore

competence.

sustainable

biofuel PRoduction

The transport sector is among the largest sources of

CO 2 emissions, with few alternatives to cut emissions than simply

reduce driving. There is a political push for alternative fuels, partly

driven by climate concerns, but also to a large extent by a desire for

energy security and to support regional agricultural industry.

StatoilHydro aims to build a business on sustainable

biofuel production. At the same time, we wish to position ourselves

for longer term growth in low cost next generation biofuel technology

as well as hydrogen technology for the transportation sector.

Biofuel provides an attractive business growth opportunity

based on a large political demand for biofuel in transportation.

Biofuels based on appropriate feedstock also represent a clear CO 2

reduction opportunity within the transportation sector being achievable

in the short to medium term.

Ethanol produced from tropical sugar has a production

cost competitive with gasoline. However, tariff barriers protecting

agricultural interests in the US and EU represent a real economic

challenge in moving these products into the market.

Significant criticism has been raised regarding the sustainability

of biofuels. This scepticism is a challenge to the business.

StatoilHydro has developed internal policies for sourcing and production

of biofuels to address these concerns and has a clear target

of only entering into sustainable biofuel production. Development of

new second generation biofuel technology is also expected to mitigate

many of these challenges.

46 47


the

geopolitics

of gas

iN europe

Philippe Copinschi

French Expert


Gas, eneRGy of the futuRe

Even though for many years, storage difficulties and high transmission

costs have seen gas largely abandoned in favor of oil and coal, natural gas has

reached its zenith today. Although gas still faces competition from other energy

sources, the global consumption of natural gas has been steadily on the rise over

the past 30 years or so. At the moment, gas is responsible for 20% of the overall

global consumption of primary energy sources, compared to 16% in 1973. According

to the International Energy Agency (IEA), the share held by gas will continue

to grow and reach 24% by 2030. This trend is even more clearly pronounced in

Europe. Alongside renewable energy sources, gas is one of the energy resources

whose usage is growing fastest of all: European gas consumption has doubled

over the past 30 years, while that of oil has remained almost at one level over the

same period. Natural gas is primarily used in sectors requiring the production of

thermal energy: the housing sector and commerce, to provide heat for premises

and for kitchen use, in industry and electrical power production.

The current rise in demand for gas is explained by a number of advantages

enjoyed by this primary source of energy. First of all, the global reserves of

natural gas are substantially greater than those of oil: at the current rate of production,

the world has enough gas reserves to last for at least 60 years. In comparison,

this figure stands at around 40 years for oil. Second of all, gas is a considerably

less polluting source of energy than the other fossil fuels. Gas does not emit any

dust or sulfur oxides when burning. And most importantly, it emits a substantially

smaller amount of greenhouse gases than either coal or oil do. Thirdly, gas is perfectly

suited for the combined production of electric power and heat: the energy

efficiency of gas-fired power plants stands at about 60% for combined cycle power

plants. In other words, their efficiency is substantially higher than that of traditional

coal-fire power plants (45% at best) and nuclear power plants (just 35%). This ratio

approaches 90% at co-generating plants that use natural gas to simultaneously

produce both electric and thermal power. Fourth of all, the construction cost of

gas-fired power plants (per kilowatt of installation) is relatively low in comparison to

other types of power plants. Finally, the development of liquefied natural gas (LNG)

technology is now permitting gas to be transported in tankers over great distances.

This, in turn, is leading to the diversification of markets, for both the producers and

the customers.

euRoPe and Russia, histoRical and PRivileGed PaRtneRs

For all these reasons, gas is an energy source that Europe will

require in ever-greater amounts if it wants to achieve its political, economic

and environmental goals: in other words, to reduce its greenhouse gas emis-

sions while at the same time ensuring that its economy is supplied with reliable

and cheap sources of energy. A number of European Union nations are

producing natural gas on their territories, including the Netherlands, Britain

and Denmark (three exporting nations), as well as Italy and France. The

European Union’s domestic production provides for about 45% of its total

consumption. The remainder is imported, primarily from Russia, Norway and

North Africa (Algeria and Libya).

Holding the largest gas reserves in the world (around 30% of global

reserves), Russia is for obvious geographic reasons a historical and privileged

supplier for Europe. Despite the increased competition with other suppliers bordering

Europe – countries such as Algeria, Libya and Norway (which do not, however,

have considerable reserves) – energy ties between Europe and Russia are

of strategic importance to both partners. Russian gas deliveries to Europe, which

are based on long-term contractual relations, have never been interrupted, even

during the days of the Cold War. In return, European gas sales provided Russia

with the much needed capital ensuring its economic development.

The gradual depletion of gas reserves in the North Sea is forcing Europeans

to establish new supply routes. After all, the transmission of gas requires

the construction of heavy infrastructure – either in the form of pipelines, or in the

form of terminals for gas liquefaction (in producing nations) or regasification (in importing

ones) when dealing with LNG transports. Numerous gas terminals are currently

being built in all major countries of Europe (Britain, Spain, Italy, France, and

so on). They are meant to ensure that over time, natural gas may be imported from

more distant countries such as Qatar or the sub-Sahara nations in Africa. Eventually,

around 25% of all the gas imported to Europe will arrive in the form of LNG.

But the most strategic projects for ensuring future European

supplies involve the construction of new pipelines – North Stream and South

Stream – that will be enable the delivery of gas from fields that are currently

undergoing development. These projects are of critical importance to the longterm

reliability of supplies in Europe, whose domestic resources (primarily

those in the North Sea) are dwindling fast. It is essential that Europe ensures

that these infrastructure projects are being realised, since they will guarantee

Europe that the gas produced in Russia and Central Europe is destined for its

own needs. In fact, this type of infrastructure places both sides (the suppliers

and the customers) in a state of interdependence. On the other hand, that is

exactly where things between Europe and Russia stand now: while 25% of the

gas consumed in Europe is being imported from Russia, the gas that Europe

imports represents 75% of all of Russia’s exports. Under such circumstances,

both parties remain interested in observing their contractual obligations, just as

Europe and Russia have always done.

50 51


the

baltic sea:

aN ecosystem

uNder

pressure

Olof Lindén

Professor, Sweden


the histoRy of the baltic sea

The Baltic Sea is a relatively young part of the Atlantic Ocean.

During the last ice-age which ended only about 15,000 years ago, the entire

Baltic basin was covered with a huge glacier. During the subsequent 5,000 to

8,000 years, the area where the present Baltic Sea is situated went through

a series of developmental stages characterized by fresh water alternating

with completely marine conditions, interrupted by short periods of brackish

water. The Baltic Sea of today is a product of these dramatic changes and

we should remember that the changes continue. Therefore we have to understand

that some of the changes we witness today are in fact reflections of

these ongoing geological post-glacial processes.

the PResent baltic

The ecosystem of the present Baltic Sea is very much characterized

by the brackish water conditions. This is also what makes the

Baltic Sea unique among other marginal seas of the world. The salinity of

the Baltic proper is about 8 o/oo in the south and 6 o/oo in the north at

Åland. This is only about 1/5 of the normal Atlantic salinity. The salinity drops

further north in the Bothnian Sea and the Bothnian Bay to on 2 to 3 o/oo

in the far north. The salinity is an important ecological factor affecting the

distribution of plants and animals in the area. Most aquatic organisms are

either of marine or limnic (freshwater) origin. Few organisms are adapted

to survive in brackish water conditions and the result is an impoverished

ecosystem with a limited number of species either of marine of limnic origin.

Hence in the Skagerrak there are about 130 species of fish, several

thousand invertebrates and several hundred different algae. In the Baltic

on the other hand there is only a fraction of this number, in total about 70

including fish, marine (macro-) invertebrates and algae. If the number of

species in the Baltic Sea is comparatively low, the abundance of some of

these species is instead very high. Hence plant species such as the bladder

wrack (Fucus vesiculosus) and the eel grass (Zostera maritima) form

dense mono-specific belts covering extensive areas of shallow seabed.

Animal species such as the blue mussel (Mytilus edulis) cover practically

all shallow hard substrates in the Baltic proper.

the huMan eleMent

The Baltic Sea catchment area is about 1,720 thousand

km 2 , with a population of about 85 million.

About half of this population lives in Poland. The urbanization

rate is relatively high particularly in Denmark, Sweden and Germany with

more than 80% of the population in the drainage area living in urban areas.

The population is primarily distributed in settlements along the coast. The

population density in the whole catchment area varies considerably from over

500 inhabitants in urban areas of Poland, Germany and Denmark to less than

10 per km 2 in northern Finland and Sweden. All countries around the Baltic

Sea are considered industrialized and during the last decade the industrial

sector has grown significantly, particularly in the former East Block states.

The industrial sectors with the most harmful effects on the environment of

the Baltic Sea are the pulp and paper, chemical, mining and food processing

industries. There is however major differences in the technologies applied

in the different countries, which has an influence on how much the industrial

sector affects the ecosystem. In contrast to the industrial sector, the agriculture

productivity has decreased significantly in the last decade. The proportion

of the land area used for agriculture varies markedly from over 60% in

Poland to less than 7% in Finland. Generally non-point source pollution in the

form of nutrients and organic matter originating from agriculture is having a

very significant impact on the Baltic ecosystem.

There is no doubt, human activities have very significant impacts

on the Baltic Sea. Some impacts are more perceived than real – they

may for example be very local or cause very limited effects, while others have

direct impacts on the productivity and services provided by the ecosystem,

endangering the survival of species and may pose a threat human heath. Below

I will discuss some of the more serious problems that have a fundamental

impact on the ecosystem of the Baltic Sea, affecting the productivity and the

survival of species of the Baltic Sea. To this category I count the problem of

eutrophication, the release of persistent pollutants and large volumes of oil.

To this category we must also count overfishing which has fundamentally affected

the ecosystem of the Baltic Sea.

eutRoPhication

Eutrophication is the term used to describe the impacts of

too much nutrients in an ecosystem. The high concentrations of nutrients

result in increased production of plants plankton algae. When this

excess of plant material dies and sinks into deeper water and to the

seabed, the degradation process consumes the available oxygen in

the water, thus leading to anoxic conditions. When the levels of oxygen

approach 0 higher life can no longer survive. We have now a situation

where between 1/3 and 50% of the deep water of the Baltic Sea is with-

54 55


out oxygen. This has resulted in large areas of dead seabed to extend

East, South and partly West of Gotland, in the Gdansk Basin and around

Bornholm in the South.

The eutrophication is no doubt one of the most serious

threats to the Baltic Sea. The entire ecosystem is affected and the impacts

are clearly visible. The factors leading to the eutrophication is not

as simple as just excess release of nutrients. Marine sediments from the

seabed of the Baltic Sea show that periods of anoxic conditions have

occurred long before humans caused any significant release of nutrients.

In addition, there are clear indications that much of the situation

today was caused by nutrients and organic matter released long time

ago. The very slow renewal time of the water in the Baltic Sea and the

fact that much of the nutrients that are impacting the ecosystem comes

from remineralisation processes, means that attempts to cut the emissions

of nutrients will only show.

PeRsistent substances

The input of persistent substances such as PCBs, various

agrochemicals, and organometals (mainly mercury and tin) is a matter of

serious concern both from an ecosystem standpoint and from a biodiversity

standpoint. In addition, for some substances there is even a human

health aspect. Fortunately several of the substances that caused sever

physiological effects in seals and eagles during the last 30 to 40 years are

now decreasing.

However, we cannot say the danger is over. There are still

substances such as organotin in far too high concentrations in the Baltic

ecosystem. In addition, the environmental toxicologists are worried that

new, so far undetected substances are present in the environment causing

negative effects in various parts of the ecosystem.

oil sPills

There are hundreds of small oil spills in the Baltic Sea every

year. These spills kill on average between 100,000 and 200,000 seabirds

every winter. A potentially even greater threat to the Baltic Sea is the release

of large quantities of oil. If a spill of 10 to 50 thousand tonnes occurs

we can expect dramatic effects on for example the Baltic populations of

several different species of seabirds.

For some of these bird species, even the entire or a significant

part of the world population may be at risk. Also, the oil will contaminate

large stretches of coastline and the clean-up costs will very high.

oveRfishinG

The modern fishing is another factor of human origin which

is causing very drastic ecological effects on the ecosystem. The intensive

industrialized fishing, particularly for cod has reduced the cod-stocks to

a small fraction of what they were in the 1950’s. The cod is the most important

top predator in the Baltic Sea and the overfishing of the cod has

contributed to ecological effects such as the large algal blooms that now

occur every summer. Some of the methods used in fishing are also highly

destructive to the environment, in particular the bottom trawling.

In contrast to the factors discussed above which all are causing

dramatic negative effects on the environment of the Baltic Sea, there are a some

human activities which from an environmental standpoint have limited or no impacts

but that has given rise to a fierce debate sometimes full of emotions. In

this category we have activities like dredging and the building of offshore wind

power plants. The issue of the proposed Nord Stream pipeline has resulted in

another debate characterized more by perception than reality. Based on the

experiences from other seas where oil and gas is transported in pipelines on

the seabed, the most likely scenario is that there will be only a temporary and

local impact when the pipeline is deposited on the seabed. Some disturbance

can be expected due to turbidity (silt etc in the water). However, such impacts

are likely to be local and temporary. During the operational phase, based on

observations, for example, in the North Sea and the Gulf of Mexico, we have

no reason to expect any significant impacts of a pipeline on the seabed of the

Baltic Sea.

fuRtheR ReadinG ReGaRdinG

baltic enviRonMental issues:

The Helsinki Commission web site has a long list of publications

of relevance to the environmental situation in the Baltic Sea.

(http://www.helcom.fi/publications)

Baltic Sea – GIWA Regional Assessment 17 (Lääne, Kraav, Titova).

UNEP, Nairobi. (www.unep.org/dewa/giwa/publications/r17.asp)

Change Beneath the Surface, (Barnes) Swedish Environmental

Protection Agency, (www.naturvardsverket.se/bokhandeln)

56 57


fiNaNcial

turmoil

aNd the

impact

Coby van der Linde

Clingendael International Energy Programme (CIEP),

The Netherlands

oN eNergy

markets


With the turmoil still raging on the international financial

markets, the first impacts on the energy sector are beginning to be

noticeable. International Oil Companies, IOC’s, are already delaying

development of their marginal oil and gas projects, and other projects

are bound to follow. The cost inflation of recent years is coming

to a temporary end and with prices of almost everything, except perhaps

credit, coming down, companies are trying to renegotiate contracts

with their suppliers in order to match cost of development with

the new price reality in the market. It is very difficult to determine if

the current prices of oil and gas are reflecting the new demand and

supply equilibriums or that it is, above all, a reflection of the current

state of complete mistrust and uncertainty about the creditworthiness

of counterparties, about the impact on the real economy and

therefore demand for energy.

The current sharp realignment of the international

economy comes at particularly bad time for the international oil and

gas industry. Although some consumer countries might welcome

the easing of the energy prices after a period of increasing tightness

of the oil, gas and coal markets, the recent price collapse also heralds

the next round of price increases when vital investments in the

energy value chain are seriously delayed. The relief felt in consuming

countries can easily turn out to be very short lived, particularly

when the investments in new production capacity are faltering. New

concerns about energy security will resurface, while the ability to

calm these concerns will have diminished due to the long lead times

to adjust supply.

Much depends on the ability of companies and governments

to turn the tide of investment delays. Some producing governments

can opt to maintain investments financed from their structural

funds, but this is not a foregone course. Their integration in

the world’s financial markets have increased the call on government

assistance in other domestic sectors, and despite the long term importance

of the energy sector for their economy, priorities with social-economic

stability also apply to producing countries. The financial

crisis is seriously reshuffling the world’s energy deck of cards

and could negatively impact energy diplomacy in the years to come

if the world fails to respond level headed.

60


italy: some

570,000 Ngvs

iN 2008:

a europeaN

record iN the

Natural gas

vehicles

market

Sergio A. Rossi

Italian analyst

that will be

iNcreased

iN 2009–2010


Today, Italy is the biggest European market in terms of number

of natural gas vehicles, or NGVs. Its fleet expected to reach at least

some 570,000 vehicles by the end of 2008, with a network of some 780

refuelling stations throughout the country. In comparison, Russia hardly

reaches 100,000 vehicles, Germany 70,000, Sweden 16,000 and France

11,000 natural gas vehicles.

True, at a worldwide scale, Italy is ranking only 6th, after

Argentina, Pakistan, Brazil, Iran and India, and before China, for

number of total NGVs, but for number of natural gas passenger cars it

outranks also India, raising to the 5th place. Moreover, most of these

countries have either particular local conditions and facilities, such

as Argentina and Brazil in South America, or specific differences from

Italy in terms of quite larger populations and lower level of economic

development, together with a significantly low purchasing power of

their average consumers.

The reasons why Italy is ahead of the pack, namely among

the advanced industrialized countries, are at least three. The first, as observed

by some experts (for example Pierre Fischer, of the Swagelok Company),

is that “the Italian gas industry just made the most of easy access to

natural gas. Thanks to a pipeline running from North Africa through Italy,

gas companies saw a ‘natural’ opportunity to sell gas and they seized it”.

top 10 world countries for number of nGvs

(natural Gas vehicles)

argentina 1721,1

Pakistan 1658

brazil 1155,8

iran 826,6

india 821,8

italy 570

china 336

colombia 261,4

bangladesh 180

ukraine 120

sources: ngvgroup.com, federmetano.it, ilsole24ore.com, October 2008.

- thousands of NGVs

Actually, the first deep methane field in Western Europe was discovered by

Eni, the Italian oil and gas State Company, in June 1959 near Lodi in Lombardy

(Northern Italy), while the second field discovered was offshore, in

the Adriatic Sea, not far from the city of Ravenna. Nowadays there are offshore

platforms in the Ionio sea near Crotone (Calabria Region), where Eni

extracts 15% of the national consumption of gas, both for domestic and for

industrial use, while the rest is imported, mostly from Russia and Algeria.

number of nGvs (natural Gas vehicles) –

top 10 world countries

64 65

Country

NGVs Total

(thousands)

Of which Cars/

LDVs

Refuelling Stations

(RS)

RS under construction

Monthly

consumption

Mln. m3 1 Argentina 1,721.1 1,721.1 1,784 n.a. 227,6

2 Pakistan 1,658.0 1,599.9 1,923 200 n.a.

3 Brazil 1,155.8 1.155.8 1,654 n.a. 222,6

4 Iran 826.6 823.9 519 680 n.a.

5 India 821.8 315.2 325 60 52,

6 Italy 570.0 566.5 700 80 49,0

7 China 336,0 95.5 561 n.a. 193.3

8 Colombia 261.4 179.3 377 n.a. 45

9 Bangladesh 180.0 46.6 229 13 21,3

10 Ukraine 120.0 7.0 224 n.a. 46,0

sources: ngvgroup.com, federmetano.it, ilsole24ore.com, October 2008

The second reason is that the Italian gas industry companies

started quite soon the production of methane gas and Gpl tanks, equipments

and Kits, so that even private citizens, besides small auto services

and repair stations, could install them in existing petrol fueled cars, converting

into NGVs. And all this, with sizable savings on the current price

of normal car petrol. Also the Italian automobile industry followed suit,

although with some delay, starting to produce the first dedicated cars for

natural gas, methane or Lpg fuels, or, as it is very trendy now, dual-fueled

(petrol/gasoline and natural gas) cars, that may be switched instantly

from one fuel type to another, and vice-versa. 86% of new methane fuelled

cars in Italy are produced by the Fiat company of Turin, and particularly

popular has been the natural gas version of the small Panda model.

Well over 40,000 natural gas fuelled Pandas were sold only in 2007. In


addition to new NGV sold, it must be underlined that in 2006, the number

of conversions of used cars, switched from petrol/gasoline to methane,

was 38,400 and in 2007 it went also beyond 40,000.

For what concerns particularly savings, today in Italy, according

to data by Federmetano (the Italian Federation of companies

distributing and transporting methane gas), for the same amount of km

covered by a normal petrol/gasoline-fuelled car, a methane fuelled car

will save up to 65%, while savings will be up to 45% in comparison to Gpl,

and up to 50% on diesel powered engines.

A third and very important reason, is a whole range of State

and regional incentives for drivers who will prefer to buy NGVs. And this

because methane fuelled cars are judged today to be the most ecological

type of vehicles, with the exception of the electrical propelled cars. Current

codified incentives in Italy for methane fuelled cars include a bonus

of 2,000 euros for buying vehicles with CO 2 emissions below 120 grams/

Km. This sum is lowered to 1,500 euros if the car emissions are higher

than the above mentioned level.

Moreover, regional laws, for example in Piedmont, decree

that methane fuelled vehicles of categories Euro 2,3 and 4, will be freed

from the automobile property tax for a five-years period, while “converted”

or “transformed” vehicles will be free of tax for a 3 years period. This

incentive is limited to cars with engines up to 100 Kw (136 Hp), but it will

be available to car owners who have installed and certified the natural gas

kit since November 2006.

An additional reason to switch from petrol/gasoline to methane,

is that this type of vehicles is and will be currently exempted from

several energy-saving and ecological measures that are often taken by

central and regional authorities, such as Sunday bans of circulating in

metropolitan cities or cities centers, alternate weekly days of allowed circulation

for even or odd car number plates, etc.

One of the problem to be solved for the further development

of NGVs in Italy is the still inadequate national network of refuelling

stations. While it has taken some four decades to build in Italy the

about 700 stations now operating, in less than three years Germany has

installed 800 refuelling stations (as October 2008) on its territory, serving

a fleet of natural gas vehicles that is eight times smaller that the Italian

one. Moreover, the present network of refuelling stations for NGVs is

rather unevenly distributed on the national territory, and it is concentrated

more than 51% in Northern Italy, mainly in the regions of Emilia-Romagna

(Bologna), Lombardy (Milan), Veneto (Venice, Trento) and Piedmont (Turin),

followed by 31% in Central Italy, mostly in Marche (Ancona), Tuscany

(Florence) and Lazio (Rome). Only 18% of refuelling stations are in the

South, mainly in Campania (Neaples), Sicily and Puglia (Bari).

Since 2007 however, pushed by the new boom of NGVs

sales, construction of new refuelling stations has been somewhat accelerated,

with Federmetano claiming that the pace of construction has

reached 2 new refuelling stations per week in 2008, with a forecast of

reaching 780 stations by end-December.

number of nGvs (natural Gas vehicles) –

top 20 european countries

66 67

Country

NGVs Total

Cars/ LDVs

Buses

Trucks

Other

Refuel-ling Stations

Under

Cons-truction

Monthly

Consum-ption

Mln. m3 1 Italy 580,000 576,500 2,234 1,166 – 700 80 49,00 Oct.08

2 Ukraine 120,000 7,000 30,500 29,500 59,000 224 n,a. 46,00 Dic.07

3 Armenia 101,352 69,971 9,831 19,626 1,924 214 8 23,80 Mar.08

4 Russia 95,000 18,000 8,000 35,000 34,000 222 5 24,00 Dic.07

5 Germany 64,454 50,620 1,444 11,900 490 804 n.a. 10,76 Sept.08

6 Bulgaria 40,255 40,000 200 20 35 56 15 7,00 Dec.07

7 Sweden 15,474 14,278 808 388 – 118 n.a. 4,90 June 08

8 France 10,150 7,500 2,000 650 – 125 15 n.a.

March

07

9 Switzerland 5,830 5,638 138 54 – 97 6 0,66 Dec.07

10 Belarus 5,500 5,500 – – – 25 n.a. 3,00 Dec.07

11 Moldova 5,000 5,000 – – – 14 n.a 1,00 Dec.07

12 Turkey 3,056 2,564 492 – – 9 1 0,40 July 08

13 Georgia 3,000 3,000 – – – 4 n.a. n.a. Dec.07

14 Austria 2,980 2,950 25 5 – 164 35 1,00 July 08

15 Spain 1,846 200 845 758 43 42 n.a 2,00 July 08

16 Poland 1,470 800 240 430 – 28 5 0,76 Dec.07

17 Czech

Republic

1,153 880 215 35 23 33 8 0,31 Aug.08

18 Netherlands 858 740 95 15 8 16 10 n.a. June 08

19 Latvia 500 30 10 187 273 4 n.a n.a. Dec.07

20 Greece 416 0 416 0 n.a. 1 n.a. n.a. Dec.07

sources: ngvgroup.com, federmetano.it, ilsole24ore.com, October 2008

Last Update


PeRsPectives

Perspectives for a further growth in Italy of the NGV market

look promising. A first confirmation is that in 2008, a year of a worldwide

and European economic and financial problems, overall car sales in Italy

declined some 10% in the first 9 months, but sales of NGVs, on the

contrary, increased by an estimated 30%, with specific sales of natural

gas commercial vehicles soaring more that 50%.

In mid-October 2008, Fiat has introduced the Grande Punto

Natural Power, a new dual fuel (gasoline / natural gas) model, with a

1.4-liter 8v Fire unit, Euro 5 compliant. Range from its 84-liter natural

gas tank is 310 km (192 miles), but the 45-liter (12 gallon) gasoline tank

extends that to a total range of more than 1,000 km (620 miles). With

natural gas, fuel consumption is 6.4 m 3 /100km, with CO 2 emissions of

115 g/km. On natural gas, power delivered is 70 hp (51 kW), and top

speed is 156 kph (97 mph), instead of 77 hp and 162 kph (100 mph)

under gasoline.

According to company sources, during the period January-August

2008, Fiat sold approximately 43,000 natural gas vehicles

in Italy, compared with 33,000 during the same period in 2007. That

means a projected sales level by Fiat of some 64,000 NGV by December

2008, and an overall Italian NGV sales figure of some 74–75,000

new NGV. But for 2009, Fiat forecasts it is ready to sell some 100,000

NGVs, which means over 110–115,000 vehicles of total Italian sales.

In this way, Italy will approach fast, if not already overcome, the objective,

supported at the II Word Fair of NGVs, of a national target according

to which the clean fuel market share will be 6%, enough to

consider NGV as a traditional fuel and not an alternative one. In fact,

already in 2008, the share of NGVs in Italy (new sales plus converted

vehicles) should reach for the first time at least 5.3–5.4% of the total

yearly number of cars, with a share of some 53,3% for gasoline and

41,3% for diesel cars.

68


why are

so maNy

italiaN

motorists

switchiNg

to gas?

Angelantonio Rosato

Italian journalist


PeRsonal exPeRience

For many years now, I have been driving a bi-fuel car powered

with gasoline and methane. I can say from personal experience that I have

found several advantages of this car. The first benefit is the economy that derives

from the substantial fuel savings. Then there is the advantage of moving

freely in Italy’s major urban centers like my home-city Rome, where driving a

petrol-powered car is very complicated. Driving gas-powered cars is possible

even under the frequently-imposed traffic limitation days or on “ecological

Sundays” when the circulation of other cars is banned.

There are some who say that all of these advantages are offset

by the lower MPG and power of gas-powered cars, especially in the winter

months. But I can reply with certainty that the difference in the performance

of gas and petrol-powered cars is marginal, especially when compared to the

great savings on fuel prices.

As for the winter argument, some people say that methanepowered

cars work poorly during the cold season because of low temperatures.

In reality, every Italian motorist who regularly uses a gas-powered car

during the winter can testify that this is not relevant as Italy is known for its

mild winter temperatures. In addition, bi-fuel models that operate on gasoline

and methane have gasoline ignitions, so there are no serious problems when

starting a car even at very low temperatures. The fuel supply automatically

switches from petrol to natural gas once the engine warms up.

But the most common stereotype is that methane is highly explosive

and makes cars with such installations dangerous. Although methane

is economic, ecological and has many others advantages it has to be stored

in a particular way which creates certain fear among people. Some even think

that a car with a methane installation parked in the sun is a ticking bomb!

Some also believe that natural gas should be stored following certain and

very expensive standards, while others still believe that parking of methanefuelled

car in the underground garage is prohibited.

In reality, however there is no particular risk of explosion comparing

methane-fuelled cars with normal petrol-powered ones or those equipped

with catalytic exhaust silencers. For many years now, methane-fuelled cars

have been accepted at both underground parking lots and on ferries.

In case of methane leakage in a ventilated room, such as garages

or ferries, the gas disperses into the environment without forming explosive

mixtures because it is lighter than air. If methane is stored in steel or light-alloy

cylinders, the maximum allowable pressure is 200 atmospheres. As an extra

measure of precaution these cylinders are tested at much higher pressures every

5 years. So even if the vehicle catches fire, the methane inside the tank will

warm up increasing the pressure, but the strength of the cylinder will prevent

the gas from exploding. Moreover, the cylinder valve automatically closes as

the engine shuts down. In conclusion, methane is not only an ecological and

economical, but also is one of the safest fuels for Italian motorists.

Over the first five months of 2008, the registration of new methane-fuelled

cars in Italy increased by 26.5% compared to the same period for

the previous year. How can this growing interest be explained? Why are more

and more Italian motorists switching to methane gas? The explanation lies in

the combination of rebates and incentives which benefit the Italian consumers

when they purchase a new car. For example, state incentives for methane-fuelled

cars, incentives for reutilisation and manufacturers’ or dealers’ discounts

add up to savings of up to 30% off the purchase price.

But these incentives are not the only reason behind the boom

in methane-powered car purchases, according to Italy’s Methane Auto trade

magazine. Among a list of other advantages enjoyed by Italy’s consumers, two

in particular stand out. The first is that methane is the cheapest fuel available,

which is certainly a matter of crucial importance. The second is that methane is

also the most environmentally friendly fuel on the market today, which benefits

both the environment and the motorists, who now enjoy the additional advantage

of avoiding traffic limitations that are being imposed in a growing number

of Italian cities.

the final framework of incentives for 2008 is enclosed below

Under a Financial Company incentives package that went into effect on January 1, 2007, individuals and

legal entities who switch their cars to LPG or methane within three years of their car’s registration date

receive a 650 EUR subsidy. The amount is sent directly to the workshop or a concessionaire. This category

also includes new vehicles purchased from concessionaires that are already equipped with LPG or methane

installation but which have not been approved by the manufacturer to run on gas. As of January 12,

2007, a person has also been able to receive a government subsidy who convert their Euro 0 and Euro 1

vehicles to methane or LPG fuel. The subsidy amounts to 350 Euro for each conversion. Both subsidies,

will be available until the allocated government fund runs out. In 2007, the fund had around 52 million Euro

reserved. To access the money, one needs to apply for conversion at a workshop or a concessionaire who

have agreed to join the program. The latter should do all the paperwork. The list of documents required is

available from ECOGAS (toll-free tel. number 800 500 501). There is also an incentive available for people

who purchase new cars – automobiles and trucks – that have been approved or even exclusively made for

LPG or methane use. Drivers can benefit from a 1,500-Euro discount that is paid directly by the concessionaire.

That discount grows to 2,000 Euro if the vehicle produces less than 120g/km of CO 2 . These benefits

apply to sales contracts signed between 3/10/2006 and 31/12/2009. The cars must be registered

before 31/03/2010. Both the 650-Euro equipment contribution and the 1,500-Euro discount for cars that

meet certain requirements are added to the reutilisation incentive.

72 73


Methane-PoweRed caRs:

a list of cars and their gas supplies

available to buyers in italy

[without bi-fuel GPl and lPG models]

CARS Price (Euro)

Citroen Berlingo 1.4 Multispace Methane 18.711

Citroen C3 Elegance Bi Energy M 16.801

DR Motor Company Dr5 1.6 16V (price stated at the sale point) 17.051

Fiat Panda 1.2 Natural Power Dynamic 13.861

Fiat Panda 1.2 Natural Power Climbing 15.651

Fiat Punto 1.2 Natural Power 5P 15.361

Fiat Dobl 1.6 16V Natural Power Active 17.471

Fiat Multipla 1.6 Natural Power Active 22.171

Fiat Multipla 1.6 Natural Power Dynamic 24.321

Fiat Multipla 1.6 Natural Power Emotion 25.631

Methane- and Gas-PoweRed caRs

New Nissan Qashqai 2 more space, 7 seats www.nissan.it/Qashqai

CARS Price (Euro)

Mercedes E 200 NGT Bi-Power Classic 47.301

Mercedes E 200 NGT Bi-Power Elegance 49.218

Mercedes E 200 NGT Bi-Power Avantgarde 51.561

Opel Combo 1.6 CNG Methane Club 17.868

Opel Combo 1.6 CNG Methane Enjoy 18.948

Opel Zafira 1.6 16V ecoM Club 21.701

Opel Zafira 1.6 16V ecoM Enjoy 23.601

Opel Zafira 1.6 16V ecoM Cosmo 26.081

Renault Kangoo 1.6 16V Comfort B/M 18.206

Renault Kangoo 1.6 16V Luxe B/M 19.276

Tata Indica 1.4 GLX Bi Fuel Methane 11.149

Tata Indigo 1.4 GLX Bi Fuel Methane 15.163

Volkswagen Caddy Life 2.0 Ecofuel 21.304

Volkswagen Touran 2.0 Conceptline Ecofuel 23.751

Volkswagen Touran 2.0 Trendline Ecofuel 26.076

Volkswagen Touran 2.0 Highline Ecofuel 27.826

There are few models in total but they range across all vehicle types, including economy and singlevolume

cars. Fiat leads by number of offers, followed by Tata and Volkswagen. The price list ranges from

just over 11,000 Euro for a Tata Indica to almost 28,000 Euro for a Volkswagen Touran Highline and over

50,000 Euro for a Mercedes E-Class.

Below, I include an example of an ad from one car company that

advertises the advantages of gas-powered cars (prices as of today): XXXXXX

model cars (Methane): This is a message for intelligent travellers: XXXXXX is

now available for those who want to save money and drive even when traffic

limitations are valid. It has an extraordinary boot space due to methane tanks

located under the floor. The dual gasoline-methane fuel supply allows drivers

to cover large distances without refuelling (310 km extra-urban cycle with a

full tank of methane). Also, the car is environmentally-friendly because it reduces

emissions by 23% and helps you to save money because of lower gas

costs. So think, wouldn’t it be a pity not to have it?

featuRes: / Engine volume 1242 cm 3 / ecological level: Euro 4 /

Maximum power ce:

gasoline 44 kw (60cv) at 5000 cycles/min Methane 38 kw (52cv) at 5000 cycles /min

Maximum engine torque ce:

gasoline 102 Nm (10.4 kg-m) at 2500 cycles /min Methane 88 Nm (9.0 kg-m) at 3000 cycles /min

Maximum speed:

gasoline 148 km/h Methane 140 km/h

fuel consumption, directive ce 1999/100:

gasoline (l/100 km) Methane (kg/100 km)

urban 7.9 / Extra-urban 5.2 urban 5.3 / Extra-urban 3.5

combined 6.2 combined 4.2*

co 2 emissions:

gasoline 146 g/km Methane 114 g/km

* – autonomy 270 km

Turnkey (base) car price €13,910.00 (with fog lights, air conditioner,

etc. = €14,810.00) + IPT (local taxes) = €196.00

Total payable = €15,006.00

The final price is calculated after the deduction of a €2,000.00 state subsidy

for the purchase of a methane-fuelled car.

74 75


ecology

aNd

oil-aNd-gas

productioN

iN the

arctic

Anatoly Dmitrievsky

Academic at the Russian Academy of Sciences (RAS),

Director of the Oil and Gas Research Institute of the RAS

Vyacheslav Maksimov

Deputy Director of the Oil and Gas Research

Institute of the RAS


Nowadays, the word “Arctic” evoces a feeling of contained

but stabile optimism among specialists involved in oil and natural gas

production as it points to one of the potential directions of the sector’s

development.

At the same time, nobody in Russia turns a blind eye to the

apparent difficulties in developing the enormous natural wealth of this

still virgin region of the planet, nor to the potential risks for the environment.

Gazprom deals with these problems very seriously, reconciling its

plans with the recommendations of scientists.

We present a short review of the ecological component of

oil-and-gas production in the Arctic prepared by two leading Russian scientists

who are specially engaged in solving these problems.

The evolution of civilization will be inevitably accompanied

by even more intensive intrusion into the world of sea waters and oceans.

The development of oil and gas fields will proceed especially actively. Offshore

fields account for 35% of the world’s oil production and 32% of the

world’s gas production, and these shares will increase.

However, one cannot rule out a negative impact on the water

environment caused by humans: e.g., as a result of deviations from operating

practices, organizational malfunctions or as a result of the naturally

existing risk of equipment damage during the exploration, prospecting

and development of oil and gas fields as well as the transportation and

processing of oil and gas.

Ecological risks are exacerbated by some natural phenomena.

In this connection, it is necessary to consider the geodynamics

of regions, to identify areas with low-density deposits taking into

account the increased avalanche danger in these regions.

The creation of a uniform system for geo-ecological monitoring

and simultaneous efforts underwater, underground, aboveground,

above-water and from space is envisaged. Such monitoring

work can be performed by equipment ranging from high-orbit technical

complexes to mid- and low-orbit, aero-altitude, medium-altitude

and helicopter complexes to above-ground, above- and underwater,

and underground measuring points. Most of the information is received

from aerospace subsystems. Above-ground, underground and

above- and underwater researches are carried out on reference sites

and their results are used in the testing of remote information.

New theoretical, methodological, organizational and technological

solutions serving as the basis for geo-ecological monitoring

allow real-time collection of representative and trustworthy information

about all significant changes in objects under study. Systematic organization

and streamlining of the work helps to decrease total expenses of

time and money, ensuring the efficient collection of informative data.

Dynamic ecological models that can register a great number of

factors in their interrelation and remote damages of influences in the framework

of existing scientific knowledge should become the basis for ecological

monitoring of the sea environment. The construction of such models requires

real-time monitoring of a significant number of factors, intimate knowledge

of biological processes, and an integrated approach to the ecosystem. As

practice shows, prospecting and development of gas fields on the continental

shelf usually involve the development and creation of regional ecological

monitoring systems that can take into account the features of the given region.

Therefore we need extensive databases on specific regions, as well as

appropriate research technologies and equipment.

The proposed approach on the basis of a new technology

for continuous geo-ecological monitoring of water areas and the results

of mathematical modeling makes it possible to assess the state of the

ecological system alongside the development of the oil-and-gas complex,

analyze ecological risk and calculate its dynamics.

The Arctic Ocean and the Arctic shelf occupy a special place

among the oceans of the Earth because of their extensive submarine permafrost

zone, which is defined by two main factors: the negative temperature

of benthonic layers of water (modern conditions) and the deeply

frozen ground developed over past geological periods (Paleolithic conditions).

The permafrost zone can be frozen (ice-containing) and unfrozen,

marked by cooled mineralized waters and materials.

The “cooled” sediments occupy the central, northern and

southeastern parts of the sea surrounding Novaya Zemlya. The contours

of this zone almost coincide with the zero isotherm annual temperature of

the seabed. The Shtokman field, like many others, is situated in the zone

of ground deposits with negative temperatures.

In the Pechora Sea, the submarine permafrost zone coincides

with the lenses of the residual degrading long-term permafrost at

depths of 40–100 m below the sea bottom. The permafrost is discontinuous

in character.

78 79


In terms of engineering and geology, the frozen and gas

carrying hydrate deposits represent a category of materials of a special

structure, condition and properties and require a specific approach for

the development of the oil and gas resources of the Arctic water areas.

In particular, these features should be considered when solving such

important practical questions as building fixed, ice proof platforms on

the Arctic shelf as well as building and operating pipelines and other

facilities. It is also necessary to take into account possible disturbances

of the natural thermal conditions in the top sedimentary cover during

well drilling and operation.

One of the possible risk factors and negative consequences

of the development of gas deposits is surface subsidence

above the field as a result of decreasing initial formational pressure

in the producing layers and their deformation, which is well studied

in world practice. Surface subsidence is also possible due to the unfreezing

of benthonic gas hydrates.

Estimating the extent of seabed surface subsidence is especially

important since the requirements for the conservation of earth

resources as well as the reliability of well operation, sea platforms and

underwater modules are stricter for offshore fields.

All this shows the need to thoroughly study and forecast

possible human caused complications from the point of view of the safety

of offshore drilling rigs on the Arctic shelf. Russian scientists and technical

experts are deeply engaged in tackling this issue.

80


127006, Moscow, Strastnoy Blvd., 9.

Telephone: +7-499-503-6161, Fax: +7-499-503-6333.

E-mail: info@gazpromexport.com; post@gazpromexport.com

http: www.gazpromexport.com

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