«On gas and oil, we pay for the mistake of the privatizations of 30 years ago»

“We need a geopolitical reading to understand the mechanisms that regulate the energy market”.
This was stated by Gianni Bonini, senior fellow of the think-tank Il Nodo di Gordio, former president of the Craxi Foundation and with long managerial experience in the energy sector behind him.
We reached him to discuss the energy issues affecting our country, while at an international level the debate is heating up on the possible sabotage of the Baltic Connector which connects Finland with Estonia.
A year has passed since the start of the gas crisis: we decided to renounce Moscow's one to implement differentiation, relying on countries like Algeria.
How is the situation one year later? Let's start with a first consideration.
Let's dispel the myth that the energy issue is a problem of technical skills.
Energy, particularly for Italy, is a geopolitical problem.
If it were a problem of skills, we would not find ourselves today, as reported by Startmag, in the situation in which Snam and GSE have accumulated capital losses of around 4 billion euros.
Caught up in the frenzy, we purchased gas, understandably so, in order to respond to a demand which has decreased in recent years and which stands at under 70 billion cubic metres.
We offered our site to the Amsterdam Stock Exchange and bought methane gas at 300 euros per megawatt hour (MWh).
We made a wrong forecast, compared to industry demand, and were surprised by the Amsterdam stock market.
Which between the one with whom we bought the methane gas and the one with whom we resold it, played a big joke on us.
It's money – 4 billion euros – that we have to repay with our taxes.
In short, obviously something went wrong.
This highlights a difficulty in geopolitical reading of the situation.
We do not believe we can easily replace Russian gas with other countries in the Mediterranean area, with which we also have very strong historical relationships.
With Moscow, the first contract was signed two days after the Piazza Fontana massacre, on 14 December 1969, when the agreement with the Soviet Union was launched for the methane pipeline that would have guaranteed us cheap gas for our industry.
This is reported in the beautiful book Italy in oil.
Mattei, Cefis, Pasolini and the broken dream of energy independence by Giuseppe Oddo and Riccardo Antoniani, published by Feltrinelli.
Enrico Mattei had gotten there first with the oil agreement.
We connected with a long-term contract with Russia, which was then followed, in the 1980s, by the famous Transmed, which then connected us to Algeria.
We were a leading regional medium power in the Mediterranean: the relationship with Russia was born in the wake of an Italian Ostpolitik.
And the Tap? It has transport capacity of approximately 10 billion cubic meters of gas per year.
We always talk about maximum capacity, which can be reached under certain conditions.
The TAP is a pipeline linked to long-term Take or Pay contracts, but these are situations that may present other variables.
When we talk about these we must consider the overall geopolitical situation, so much so that the Greenstream from Libya now has a very limited capacity.
Not just for the war: I don't see why the Turks and Russians should help us.
Meanwhile, BlackRock, the US investment giant with 8 trillion assets, is ready to make its entry into the regasification of the Adriatic.
In addition to the fact that it is in pole position to win control of the Porto Levante regasification terminal (Rovigo).
It seems that the Americans are gaining quite a bit from (our) giving up Russian gas.
It is clear that with the eastern limes in flames and the Ukrainian situation we have reversed our energy supply policy.
Energy policy has always been anticipated by foreign policy, it is a dependent variable.
I don't want to make judgments on the merits: Italy is dramatically obliged to do this after thirty years in which we have lost pieces of sovereignty.
However, if we cut supplies from the East, we cannot think of replacing everything lightly by depending on other countries, which are geopolitically allied to Russia.
Counting on Libya is madness, but so is betting everything on Azerbaijan.
Energy has now become an instrument of deterrence at best, and at worst, an instrument of war.
So what about the regasification terminals? Are they an answer? Well, they can be.
On two conditions: that they be done, and that they be done differently.
Liquefied natural gas is different from what comes via pipe.
Remember that it is a more complex and expensive procurement process.
Not even in the Gulf of Mexico are they able to respond to the increased global demand: because the East, especially the Far East, supplies itself with LNG.
We have replaced energy that arrives at low cost, based on long-term contracts, with LNG that goes where the wallet takes it, even at the last moment.
So, we are in full laissez-faire.
Those ships even change route, based on the transfer facility in Amsterdam.
It is a stock exchange mechanism, this logic should not have been allowed in a strategic sector such as energy.
It is a mistake made 30 years ago, with the privatization of Eni.
When you allow funds like BlackRock to get into these energy companies, they severely affect their governance.
It's all left to the Amsterdam Stock Exchange.
In the case of GSE's capital loss, it was somehow exposed to speculation.
Which is always in the bag.
It is inherent to what Giulio Tremonti rightly defined as "mercantism".
And then there is speculation, of course.
We are prisoners of a global market from which it is very difficult to escape, because it is a concatenation of situations.
The large funds dictate the law, even more so if you replace fixed, long-term, Take or Pay contracts with spot contracts.
Due to the very strong global demand, LNG is unlikely to be willing to be locked into long-term contracts.
Also because once you are hooked to the Amsterdam stock exchange, it is the latter that determines the prices.
We have relied on the ferocious mechanism of the relationship between supply and demand, no longer controlled by states and public interest.

Author: Hermes A.I.

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