All the energy faults of the European Union, which has focused too much on the free market, forgetting the security of supplies. The thought of Alberto Clò, economist and energy expert, from his latest book
In his latest book – The Blackmail of Russian Gas. Reasons and Responsibilities , published by Il Sole 24 Ore – Alberto Clò, an expert on energy issues and director of the magazine Energia , criticized the choices of the European Union regarding the regulation of the energy markets, responsible, according to him, for having exacerbated the current crisis of supplies and prices.
THE OPPOSITE DIRECTIONS OF THE EU AND RUSSIA
The "primary concern of the European Commission and the Member States", he writes, was to "complete the processes of market liberalization, de-verticalise the ex-monopolists, reduce the importance of long-term contracts considered an obstacle to the deployment of full competition in the markets on the illusory assumption that there would be multitudes of companies eager to enter them. While Russia was strengthening its power by concentrating it in Gazprom”, continues Clò, “Europe moved in the opposite direction”.
THE FAULTS OF THE ANTITRUST
The economist then writes that "no objection […] was advanced by the national Antitrust authorities – as strict internally as they are indifferent externally – while the European one, after two years of investigations into the accusation of abuse of a dominant position by Gazprom in eight European countries of Central and Eastern Europe decreed the non-suitability despite the fact that in at least five of them the Russian monopolist charged abnormally high prices”.
LIBERALIZATION AND SECURITY OF SUPPLIES
According to Clò, "the liberalizations were not in themselves capable of facing the security of supplies nor the market of pursuing public interests without caring about anything other than making profits".
“Why”, he asks rhetorically, “strengthen the interconnection of markets by increasing competition with large investments which would have benefited the system more than the incumbent? Why, likewise, strengthen the connections between Spain and France which would have allowed the whole of Europe to exploit the vast unused Spanish regasification capacity […] by reducing the market power of the incumbents in France?”.
THE OPINION OF BERNABÈ (EX-ENI)
Clò's theses were substantially taken up by Franco Bernabè , former CEO of Eni and now president of Acciaierie d'Italia, in a recent interview with the newspaper La Stampa .
Bernabè, in fact, said that the European Union proceeded to "dismantle the system of large suppliers who had guaranteed the availability and competitive prices of methane for decades". “In the 1980s and 1990s”, he argues, “the market structure was much more solid: in Europe there was a large internal production of gas and supplies from abroad were managed by three or four large buyers who were able to negotiate from positions of strength with Gazprom or Algeria”.
According to the former ENI manager, Brussels “has reformed the [energy, ed .] market by making it competitive on the demand side without being able to influence the supply side. The big buyers have been dismantled, the structure has weakened. And this situation cannot be remedied” immediately.
With the aim of creating a competitive market, the European authorities have “dismantled the integrated monopolies: Eni had the infrastructure with Snam, distribution with Italgas. At one point this didn't go well in Brussels anymore. In addition, he asked to dismantle the long-term contracts, with which ENI and the other European subjects had full control".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/alberto-clo-colpe-europa-mercati-energia/ on Sun, 15 Jan 2023 07:02:26 +0000.