How Italy should move on gas. Speak Bessi
Not only Ukraine: all the geopolitical and energy intertwining for Italy on gas. Start Magazine conversation with Gianni Bessi, PD councilor in Emilia-Romagna and author of Post-Merkel and House of Zar
The political and geopolitical scenarios that were opened by the transition to a green economy were the themes at the center of an event organized by the PD of London starring the essayist and director of the PD to the Emilia-Romagna Region Gianni Bessi . At the event Geopolitics at the time of the energy transition , this is the title of the event conducted by Lorenzo Ammirati and Luca Montalti, he explored various aspects related to current events, from the political and military tension between Russia and Ukraine to the energy crisis and the price of gas.
Startmag asked Bessi to deepen the central passages of his speech for the Pd of London in which, starting from some key elements of his Post-Merkel books. A void that only Europe can fill and the House of Tsar. Geopolitics of energy in the time of Putin Erdogan and Trump , he analyzed the main current geopolitical issues, with a particular focus on the causes of the energy crisis.
The hypothesis of a war between Russia and Ukraine is also putting the whole West in serious difficulty.
“Yes, but not all in the same way. European countries are in more trouble to the point that Josep Borrell, the EU's high representative for foreign affairs, has gone to meet both the US administration and some LNG producers to find out if Russian gas can be replaced. Japan has stated that it is ready to 'share' some of its LNG supplies to give Europe a hand. I don't know if it's just me worried… but every day the atmosphere of a 'state of war' becomes more and more heavy and also the language that accompanies it ».
Meanwhile, with the surge in energy prices, we risk losing competitiveness.
«Of course, a competitive advantage has been created for the industrial system of the United States, because their electricity costs much less. The competition is played out between macro areas, between complex systems and the 'US system', as I told in House of Tsar , has become energetically independent. Not to mention China. In some sectors, German and also Italian companies, after all we continue to be the second largest manufacturer in Europe, will find themselves at a disadvantage towards American and Chinese competitors ».
What he assumes is a global challenge.
«Exactly, which is played out between land powers, China-Russia, and the maritime powers of the Anglosphere, with Europe finding itself in the middle. If I had to summarize the situation in one word I would use 'complexity'. At this moment it is good to be wary of those who present simple solutions to solve complex dynamics such as those of electricity production or the energy needs of a country or a continent ".
The competitive disadvantage you mentioned is not limited to the industry though.
"At all. Energy needs are not just electricity because, for example, in agriculture there is a large use of hydrocarbons which are not only used to operate tractors or threshers, but for example to produce pesticides and fertilizers ».
And the demand for energy continues to increase.
«The record in gas consumption of the last year is destined to be beaten: let's remember that the world's population is growing inexorably and per capita income is growing in many areas: this increases the demand for consumption and services, both social and health. And so the demand for energy rises: it is not a trivial thing because it means that complexity increases ».
What led to the rise in the price of gas?
“Several factors. Surely the complexity I was talking about, both geopolitical and productive, especially in the Far East, but it is not the only cause, there are many. Certainly what catches the attention today is the tension between Russia and Ukraine, but also a technical accident in the Yamal peninsula north of Siberia, where there are the largest fields in Russia, which has delayed and decreased production and climatic problems. which have slowed down the supply from renewable sources, increasing the use of gas which, as I always remember, is the stabilizer of the system. This increase has caused another, that of the production of CO2 and therefore of the price of the certificates that are purchased for emissions into the atmosphere: these are costs that, obviously, have been paid by the end user, in the bill. Not to mention the drastic cut in investments in prospecting, research and its extraction worldwide ».
What is meant by a system stabilizer?
"Renewables are unstable, in the sense that they are not able to produce energy 24 hours a day: during deadlocks, therefore, another energy source is needed to guarantee the supply of energy. This source in Europe is gas, which provides around 20 per cent of the energy required in the EU. And given that we want to rightly abandon coal, its role becomes even more crucial ».
Then there is the markets factor.
"When the large international portfolios moved from stable price to negotiated price trading, the whole system had an interest in transforming their contracts indexed to the Dutch TTF spot market with respect to other types of medium-long term contracts . Many thought they would make a profit: the opposite is true ».
Looking at the international situation and the prospects we may face of energy shortages, the period of austerity of the early 1970s comes to mind.
«With the winds of war that are told to us every day by the media … with gas instead of oil … yes, the comparison is not strange. After all, natural gas has become a commodity that behaves with the same dynamics as oil or has increased its portability capacity: this is because alongside the so-called gas pipelines there is a competitive market for liquefied natural gas. Furthermore, gas, like oil, has also become subject to the price variable, while for many years it had accustomed us to its stability ».
Among the solutions proposed to amortize the price increase there is also the end of the moratorium on Italian gas extraction.
“And this is good news, after the Conte government has decided on a moratorium on extractions that has lasted for three and a half years. Doubling the Italian production would be only the first step, because now we extract only 4 billion cubic meters per year billion cubic meters out of a total of over 76 billion needs ».
The Draghi government seems to have already decided on this game.
«The idea is to activate national production at 7 or 8 billion cubic meters per year. I can only be happy with it since it is one of the solutions that is at the heart of my book 'Natural gas. The energy of tomorrow '. In the meantime, it is okay for the extractions to be released, then it would be good to try to progressively increase production to cover 10 percent of the gas we need. This is accompanied by a greater supply guaranteed by the TAP and increasing the capacity of our LNG storage system. In this way we could reach over 30 per cent of the requirement ».
That's all?
"No. On the domestic front, it is necessary to invest in the efficiency of the economic and production system, focusing for example on industry 4.0 and the circular economy, but also by changing our behavior. Technology alone is not conclusive without new cultural and educational approaches. On the diplomatic front, we must increase our efforts to achieve the pacification of Libya and establish new relations with Egypt, Algeria, Cyprus and Lebanon, which are nations willing to focus on increasing gas production. And it could also be thought of building a new regasification plant in the south. But we need a strategic vision, not a list of spot interventions: the aim is to guarantee us a sufficient supply of gas at stable prices. Or, in any case, build a strategic capacity that holds up when there are these price fluctuations. Which we should also take into account in the future ».
What about renewables?
«A system that uses only renewable electricity in the future obviously remains the point of arrival. But it is not a scenario that will materialize any time soon. How many years will it take? Still many. Furthermore, Europe's objectives are to extend the use of electricity to fields such as transport and heating, which are the largest part of a country's energy needs. The cake is therefore expanding and it is necessary to invest a lot in research and technological development to arrive at reliable solutions. It is okay to set targets even in terms of time, but first of all the efficiency and reliability of the system must be guaranteed. In the meantime, the world must move on and thinking that it does not need gas means offering oneself hands and feet to speculation and to everything we are experiencing today.
Gas is at the center of geopolitical maneuvers involving world powers and major players in the sector. As you have often repeated in your speeches on Startmag , if the future belongs to renewables, in the meantime, the Italian energy system must be stabilized thanks to gas. Today many have changed their position. Is it easier to say today, with what's going on?
“I don't know if I can claim that primacy. However, the adage always applies. Better late than never".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/gianni-bessi-gas-estrazione-italia/ on Mon, 14 Feb 2022 08:11:17 +0000.