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The Mediterranean Option in Energy

The dramatic energy crisis exposes a severe weakness in European and Italian politics, totally unprepared to an external shock. Moreover, decarbonization must be gradual; otherwise, the social and productive system will collapse. While renewable energies are insufficient to totally replace fossil fuels, gas will continue to be essential for the foreseeable future, but its price will remain high.

However, geopolitical trouble exists. Gas – like wheat[1] – is a significant component of Moscow's foreign policy. Europe seeks to limit Russia, which still sees itself as an imperial power - the post-Soviet space is precarious - but it lacks the independence to fight on equal terms. Italy imports over 40 percent of gas from Russia (30 billion cubic metres every year).

The war in Ukraine and the ensuing sanctions push precious Russian gas into new markets. As a result, Russia, China and even Iran are getting closer. Moreover, the Russians would like to impose only ruble payments for gas, bypassing sanctions and devaluation. The old "Heartland" is closing ranks.

For this reason and more, Mediterranean gas infrastructure is strategic : TAP[2] and Levantine reservoirs are even more valuable. Therefore, Italy must work to diversify energy sources (gas, old and new generation nuclear, renewables, and hydroelectric) and diversify the supply sources of each, starting with gas. However, it will take at least three years[3] to replace Russian gas.

A Constant Fibrillation

The fossil model resulted in extreme pollution and is undoubtedly on its way out, but it provided stability, reduced social distance, and provided a welfare state. After being devastated by war, Italy has become a permanently democratic country where well-being continues to be the foundation of democracy for a large part of the population. 

Now, societies’ energy foundations and democratic foundations are at stake. With a just fragile social system coming under constant threat from the quick and unthinking replacement of energy sources, instability is perpetual. Exorbitant costs force consumers to reduce consumption and create a widespread sense of uncertainty, whereas a production block is concrete. In essence, the old – and so hated – fossil system made human life more worth living or at least made it to those generations of Italians who are oblivious to the sufferings of life in the fields and emigrations. There will come a day when we will be able to reflect on what it means to reduce man to a mere destroyer of ecosystems.

The European Taxonomy

The situation forced UE to revise its strategy towards decarbonization, which, until now, had not taken into consideration many factors: rising social instability, job losses, supply disruptions, and blackouts. By including gas and nuclear power in the European taxonomy, it opens up new opportunities for private investment in the most stable energy sources and promotes greater energy autonomy. The Commission choose a gradual way for ecological transition. European societies have relied on the energy security of fossil sources, which they have tried to abandon too hastily. By now, the evolution of events forces Europe to try every way to break the dependence on Russia. The transition, moreover, requires investments and time: progressiveness and gradual corrections are always correct choices.

Italy Re-discovers Energy Policy

After an initial phase in which it buffered losses, especially for families, the Italian government unblocked national gas production, simplified procedures for renewables and favoured self-consumption of energy for small and medium-sized enterprises. There is still no practical framework for energy policy, but progress is being made.

Italy has enormous gas resources in Adriatic Sea but must accelerate investments after years in which ideological vetoes and NIMBY actions blocked them. There is often a need for improvement of infrastructures. Some wells have been decommissioned but can be reactivated. The road to Italian gas is just marked, but it will take time, and the large reserves cannot cover the needs.

In an audition to the Chamber of Deputies, the Minister for Ecological Transition, Roberto Cingolani, re-launched the proposal of the energy mix because “renewables will not be enough”, noting that Italy need to start thinking in the long term.[4]

The energy model based on fossil fuels has not been critically examined over the years, nor have the technologies to replace it, as well as their benefits and disadvantages. Rather, vetoes and environmental ideology have further complicated matters. The strategic TAP, which will be in full service by the end of 2023, has also been severely opposed; meanwhile, Massimo Nicolazzi, an energy expert, suggests the usefulness of doubling[5] the TAP (it will take time and agreement with the other parties).

A “Syrian scenario” is expected, so the crisis will continue for a long time[6]: As the demand for gas in Europe and China grows to replace coal and nuclear (in Germany), prices will remain very high and the cost of dropping energy will increase. Today Italy is the most vulnerable country. Gas consumption reaches its peak in summer. Hence, the energy mix is a correct countermeasure.

Italy must find a way to deal with the continual and predictable rise in gas prices, which drives food prices upwards while many sectors, including hauliers and steelworkers, are too close to a blockade. Besides the increase in extractions mentioned above, the government is increasing storage; strategic gas reserves (4.5 billion cubic meters) could also be used.

Mediterranean Gas

The complexity of a globalized world and the ever-frequent tensions require a flexible energy policy. Currently we face ongoing crises: gas and wheat today, rare earths yesterday, water tomorrow (now). Getting out of the energy crisis is neither immediate nor straightforward: gas prices will remain high and volatile at least until 2023. An overall review of policies and instruments is fundamental.

In order to stay competitive, Italy needs to develop all technologies: renewable energy, if the atavistic limits and discontinuities are exceeded, nuclear power of the next generation (as in the start-up Newcleo[7]), which works on innovative reactors; Italy has a thriving tradition in atomic research. A versatile energy mix will make it possible to shelter from new crises, but gas remains the cornerstone of any energy strategy today. Gas is reliable and has significantly lower emissions than coal and oil.

Off the coast of Italy, especially in the Adriatic Sea, gas is very present. Similarly, there are very substantial reserves in the eastern Mediterranean. Admittedly, the extras are minimal compared to the global ones and the states' current needs, but they can be helpful. Historically, Italy imports gas from Algeria, but no new fields have been discovered there, and the demand from the Algerian domestic market and beyond is always greater.

Italy has lost its meticulously constructed presence in the Mediterranean after the last war, so it does not have many cards to play when it comes to Middle Eastern gas, and other regional powers have risen in the void. The Turkish government has taken on a regional role by revitalizing its millennial history, as well as by becoming a hub for the passage of gas infrastructures, beginning with TAP, which flows into Southern Italy. It may not be easy to access those massive gas resources, but it is one option for getting out of Moscow's gas-and-wheat yoke. Otherwise, there’s no alternative to a new energy strategy.

 

[1] “Ukraine: le blé, unearme diplomatique pour la Russie”, Interview with Sébastien Abis, Director of Club Démeter, Pour l’Éco, 23 February 2022.https://www-pourleco-com.cdn.ampproject.org/c/s/www.pourleco.com/environnement/ukraine-le-ble-une-arme-diplomatique-pour-la-russie?amp=1

[2] M. Kenderdine, The importance of natural gas to Turkey’s energy and economic future,Turkish Policy Quarterly, (27 November 2018).http://turkishpolicy.com/article/934/the-importance-of-natural-gas-to-turkeys-energy-and-economic-future

[3] Italy needs at least 3 years to replace Russian gas imports, minister says”, Reuters, 16 March 2022.https://www.reuters.com/business/energy/italy-needs-least-3-years-fully-replace-russian-gas-imports-minister-2022-03-16/

[4] Stephen Jewkes, “UPDATE-1 Ukraine Crisis shows need for change in Europe’s Energy Markets,” Reuters, 23 February 2022. https://www.reuters.com/article/italy-gas-minister/update-1-ukraine-crisis-shows-need-for-change-in-europes-energy-markets-italy-minister-idUSL8N2UY4OI

[5] M. Nicolazzi, “Il gas russo arriverà ancora. E Putin proverà a finanziarsi la guerra con i nostri soldi,in Il Foglio, 25 February 2022.https://www.ilfoglio.it/economia/2022/02/24/news/il-gas-russo-arrivera-ancora-e-putin-provera-a-finanziarsi-la-guerra-con-i-nostri-soldi-3731486/

[6] A.Clò, 3 lezioni dalla Grande Crisi in Rivista Energia, 16 February 2022. https://www.rivistaenergia.it/2022/02/3-lezioni-dalla-grande-crisi/

[7] https://www.newcleo.com/

CONTRIBUTOR
Lorenzo Somigli
Lorenzo Somigli

Lorenzo Somigli is a journalist and press officer who works for industries, factories, and Italian institutions. Also, he founded the blog Il Tazebao, which analyses the confusing contemporary scenarios.

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