By Gunther Patzig
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Any reductions will depend strongly on price reforms and cuts in power demand growth. The target for natural gas actually projects an increase in its share, to just over 8%, with oil remaining relative stable, at around 18%. Natural gas consumption is supported by positive commercial and policy drivers, and oil consumption will be driven by increases in gasoline and diesel demand as a result of more vehicle purchases. With regards to non-fossil fuel energies, the Plan foresees that 11% of primary energy consumption will come from these sources by 2015, as part of the move to diversify energy supplies.
However, this is related to the goal of eliminating the country’s small refineries with capacities below 40,000 b/d. The elimination of very small refineries could also take place in Russia. 5 mb/d of cumulative additions will be needed by 2035. a. The underlying reason for this trend is that non-crude supplies increase faster than demand, and thus, as a proportion of total supply. It means that less incremental refining capacity is needed per barrel of incremental liquids demand. 5 15 0 1 2011 2012 2013 2014 2015 * Potential: based on expected distillation capacity expansion.
The first, and perhaps most pressing issue, is the euro-zone crisis. While Greece’s complete default has so far been avoided, sovereign debt issues remain at the heart of the euro-zone’s worries. A number of other countries, many bigger, have become potential candidates for support, and many peripheral countries still face serious challenges. It appears that the euro-zone has been pushed to the edge in its ability to finance further sovereign debt fall-outs. It seems likely that, if any one of the bigger economies within the euro-zone saw their situation worsen then the repercussions could be severe as the sovereign debt holdings of the European banking sector are considerable.