The World Energy Council is launching a new Global Gas Centre in St. Petersburg on 6 October in collaboration with gas companies ENGIE, OMV and Swissgas. These companies have all recently left another gas organisation, the Gas Centre of the UNECE (United Nations Economic Commission for Europe), out of dissatisfaction. In St Petersburg, the Global Gas Centre wants to sign up new members, particularly Gazprom, the current Chair of the UNECE’s Gas Centre. Karel Beckman has the inside story on the jostling going on in the international gas lobbying circuit.
Is it a coup? Is the World Energy Council, a long-established global network of energy stakeholders, with strong roots in the electricity sector, on the point of expanding into the gas sector, and trying to elbow out the UNECE’s Gas Centre? Or are the two clubs – the World Energy Council’s Global Gas Centre (GGC) and the UNECE’s Gas Centre (GC) – “not competing” with each other, as executives from both sides insist?
Certainly the Global Gas Centre, officially founded earlier this year, is the initiative of a group of disaffected members of the UNECE  Gas Centre. René Bautz, the CEO of Swiss midstream company Gaznat, and the first Chairman of the Global Gas Centre, says that the founding companies involved – ENGIE, OMV and SwissGas, who have more recently been joined by Fluxys, the Belgian gas transmission system operator (TSO), and NIGC, the Iranian national gas company – were “unhappy” with the functioning of the UNECE’s Gas Centre. “The main reason they were not happy with the Gas Centre”, he says, “is that UNECE is focused on European topics. We want a global organisation with a worldwide perspective.”
“We are talking to Gazprom and hope they will join us. There will also be many Asian companies at the event that we will invite on board”
The UNECE’s Gas Centre was founded in the early 1990s after the collapse of the Soviet Union,essentially to help companies from the FSU and Eastern Europe to operate in the new market context they were faced with. The member companies originally were from both the “West” and the “East”, but many of the Western ones, such as Shell and Gasunie, the Dutch TSO, have left in recent years. The remaining members are: Gazprom (currently the Chair), BOTAS (Turkey), EDF (France), Gas Natural Fenosa (Spain), KazMunaiGas (Kazakhstan), Naftogaz (Ukraine), Plinacro (Croatia), Romgaz (Rumania), Socar (Azerbaijan), Srbjagas (Serbia) and STEG (Tunisia).
According to Bautz a new Global Gas Centre is needed because “the energy world is changing. We can no longer look at the gas sector in isolation. This is why we have formed the Global Gas Centre, to better understand the shifting dynamics of the energy sector and the place of gas within this wider context.”
Trilemma
The World Energy Council offers the ideal environment for this, says Bautz, because it is a global network with diverse participants: energy leaders from the private and public sector sector, policymakers, regulators and academic researchers. “I have seen at first hand how the World Energy Council is able to bring together industry, policymakers, economic organisations and regulators. Therefore it was natural that we developed this project with the Council and its Secretary General, Christoph Frei.”
Bautz praises the quality of the work done by the World Energy Council. “The Council is developing really good content with the World Energy Trilemma, the World Energy Issues Monitor, and the World Energy Scenarios. Working with them will enable us as gas industry to be involved in this work and benefit from it.”
“We need a full-fledged engagement with the private sector, with those who have the skills, capacity and resources to support the various transitions that need to occur”
Bautz notes that this is a critical time for the gas sector. “We are faced with crucial regulatory changes, plans for new market designs. Climate policies are coming to a head.” He says the industry is “convinced gas has a role to play in a future low-carbon world, not just as a transition, but as a destination fuel. The gas industry can work together with renewables. We can link electricity with gas networks. We can develop concepts like power to gas.” But these possibilities are “currently not sufficiently taken into account by policymakers. Countries are developing new energy strategies and we would like to see natural gas considered more as an option for the future.” He sees the World Energy Council as the ideal platform to discuss the role of gas with other stakeholders.
In St Petersburg, the Global Gas Centre should become what its name promises: a global organisation. “We are talking to Gazprom and hope they will join us. There will also be many Asian companies at the event that we will invite on board.” The Global Gas Centre had talks with Shell in the previous months, but so far the Dutch-British energy major has not signed up to the Global Gas Centre. “They are in a drastic cost reduction programme, so they have put off a decision.”
Interface
However, success is not yet guaranteed for the Global Gas Centre. Certainly the UNECE has no intention of quietly going away. “We’re in the middle of re-inventing the  Gas Centre”, says Scott Foster, Director of the UNECE Sustainable Energy Division, under which the Gas Centre falls.
Foster explains the changes that the UNECE’s Gas Centre is going through. He notes that the UNECE consists of 56 member states, not just from Europe, but also Canada, the US, the countries from the Former Soviet Union, Turkey and Israel. It is one of five similar regional UN organisations in the world, although the UNECE coordinates activities for all of them, says Foster. By contrast, the Gas Centre was established by private companies. “Our Member States have told us they don’t think it’s appropriate anymore for these private companies to discuss matters under the UN flag with the old mandate. So we need to revisit the mandate.”
Foster has been given the task to “re-invent” the Gas Centre, he says. What he aims to do is “create a structure that will provide an interface between governmental processes at UN level and the gas industry.” For the UN this is important, he says, because “we are in a critical period. We need to agree on climate change, on sustainable development goals. This means we need a full-fledged engagement with the private sector, with those who have the skills, capacity and resources to support the various transitions that need to occur.”
“Through the World Energy Council, the Global Gas Centre has direct access to political decision-makers all over the world”
Concretely, the UNECE Gas Centre has four working groups looking at specific topics that affect the gas sector: reduction of methane emissions, best practices for LNG, natural gas vehicles, and cooperation between gas and renewables. “We are looking at these topics with the industry because we believe gas has an important role to play in the future.”
Foster says that he hopes UNECE Member States will complete a plan for the re-invented Gas Centre (it will most likely get a different name) by December. He stresses that the new model should be global in outlook, not just European. If successful, this could then become a model for other industry sectors. He notes that “our executive secretary has made a clear offer to the gas companies that if they want to continue collaborating with us, they are welcome.”
Although Foster says UNECE is not in competition with the Global Gas Centre, he notes that what UNECE offers the gas sector is different from what the World Energy Council can offer. “We provide an interface to link with the UN system. Right now we are writing the rules about how markets will function in the future. If the World Energy Council wants to say their platform is a great one, fine, but it’s still the World Energy Council. It’s not an intergovernmental organisation, it is a conversation place.”
Sectoral organisation
Whichever Gas Centre will win out – and maybe they will both have a future – a key question is how they will relate to the International Gas Union (IGU). This body after all has represented the global gas sector for many decades, since 1931 – just 7 years after the World Energy Council was founded (although it was named the World Power Conference then).
The IGU has some 140 members – companies as well as associations – representing over 95% of the global gas market, according to its website. They are by far the largest gas lobbying organisation.
But both Bautz and Foster note that the IGU is different from their initiatives in that it is a “sectoral organisation”. It consists only of gas industry representatives. In fact, they both say they are eager to work with the IGU by providing it with a broader platform for discussion.
“I am in discussion with the IGU to find out what kind of model would be most effective for engagement between the gas industry and the UN system”, says Foster. “The IGU has said to me that this is absolutely essential for them.”
Bautz too says “we have very good relations with the IGU. The World Energy Council scenarios say that gas is going to play a big role in the future but there are numerous issues that need clarification. Through the Council, the Global Gas Centre has direct access to political decision-makers all over the world. We expect to gather as many leaders as possible during the World Energy Congress that will take place in October 2016 in Istanbul and address key messages. So this fits well with organisations such as the IGU and others who represent the gas sector.”