Market forces undermine Czech gas security goals
Security of supply of natural gas is one of the Czech Republic’s and EU’s main energy priorities. But a recent conference in Prague has shown up some worrying signals about how market forces might be undermining that target.
Never again was the response of various countries and the EU and they pored over the building blocks needed for greater gas security. The first obvious one is to diversify supplies of gas so that not all of it is sourced from Russia. Then the supply channels, or pipelines, can be diversified or increased so that the shutdown of one pipeline does not automatically mean an end of deliveries. And finally, gas storage can be increased so that reserve capacity can perhaps tide over a country through the worst winter months.
That’s the theory. But the reality appears a little less rosy for the Czech Republic. Most of new pipelines talked about to diversify European supply, such as Nabucco, and tap gas fields in the Caspian region or further afield have not happened. Meanwhile, Russia talks about ending gas supplies through Ukraine and boosting the existing Nord Stream pipeline under the Baltic. The last two moves together would represent bad news for the Czech Republic.
Looking at gas storage too, the signals from the conference were hardly upbeat either. The simple fact is that while the Czech Republic boasts an enviable amount of gas storage capacity, the companies offering it warn that the business is now loss making. One manager of the Czech Republic’s second biggest gas storage company, MND, says gas storage is this year in the red and the short term signals are not good.
The scenario thus appears to be one of those ironic ones where market forces are undermining political goals. The gas companies say it’s for the politicians to start coming up with some answers.