The Potential Contribution of Natural Gas to Sustainable Development in South Eastern Europe

ii The contents of this paper are the author's sole responsibility. They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members. This publication may be reproduced in part for educational or non-profit purposes without special permission from the copyright holder, provided acknowledgment of the source is made. No use of this publication may be made for resale or for any other commercial purpose whatsoever without prior permission in writing from the Oxford Institute for Energy Studies. PREFACE The South East European region does not receive much attention from the European gas community except in relation to transit pipelines. This is probably because – with the exception of Romania – there are few large gas markets in the region. But with Bulgaria and Romania now European Union member states and many others which are parties to the European Energy Community Treaty, we felt it important to commission a study to address the issue of whether and how gas could contribute to sustainable development for the countries in this region. This paper fills a gap in the gas literature by addressing this issue in two respects: how markets themselves might develop, and how transit infrastructure could facilitate (or impede) well-functioning markets and sustainable development. Some of the conclusions may be surprising to some in that they focus on non-conventional, small scale, region-specific approaches to market development featuring new technologies such as CNG shipping. This emphasis on niche applications goes against the conventional approach of large scale power generation development which is characteristic of most EU gas market analysis. Some other conclusions in respect of transit pipelines also run counter to conventional wisdom. This is the OIES Gas Research Programme's first publication on south east Europe and can be seen as filling an important geographical gap in our work between Yesim Akcollu's study of Turkey, Philip Wright's book on the UK and Heiko Lohmann's study on Germany all published in 2006. We were very fortunate to have persuaded Aleksandar Kovacevic to write this study for us. His intimate knowledge and enthusiasm for the countries of the region, their energy systems, and potential energy technology development, is clear on every page of the study. The case which he makes for a " turnaround " towards sustainable energy development is difficult to dispute.