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Making the most of Italy’s energy resources

Rome, 30/11/2016, National Interest
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At present, the world's energy mix is based to a large extent on traditional sources, and particularly fossil fuels.  All forecasts agree that population growth and improved living standards will drive an increased demand for energy worldwide, which will also entail an increased demand for oil and gas, in absolute terms.  Mankind will therefore have to resolve a real energy dilemma: on the one hand the need to meet growing demand, and on the other hand the need to limit emissions in order to protect the planet from escalating global warming. There will need to be a diversified energy mix in which the various sources can coexist and complement one another, at the end of a lengthy and complex transitional period.

In this scenario, Italy's situation must be interpreted from a European viewpoint.  The peak in energy consumption in the advanced economies is now behind us: the economic crisis and increased efficiency have gradually reduced consumption.  Nevertheless energy dependence, with its well-known consequences in terms of the burden on the balance of payments and the security of supplies, remains a priority focus for Europe, which imports twice as much energy as it produces.  Italy's dependence is no less than 76%.  In Europe, too, fossil fuels remain the backbone of the energy system: this applies particularly to Italy, where they meet 70% of demand.  Italy's extraction industry performs a strategic role in this context.  Though national output meets only 10% of demand, the oil and gas industry creates benefits in terms of jobs, contributions to public finances, and investments.

The broadest possible approach must be adopted to the country's energy resources, and therefore their exploitation.  Attention must be paid to both natural energy resources and human resources, and especially technological innovations and research.  There must be a growing focus on the role of consumers, which has changed considerably in recent years.  Though there is no shortage of innovation, technology, and resources, to maximize our energy resources we also need a vision, a strategy, and confidence, which Italy now lacks.

Energy is the basic raw material on which a country's economic and industrial development can be built. A new national strategy on the subject, the availability of energy itself, and access to it at an acceptable cost will yield essential competitive advantages.  It is impossible to imagine how Europe (and Italy) can achieve their reindustrialization without access to low-cost energy.  At the same time, any kind of energy planning must keep in mind that the worldwide shift away from carbon must be pursued to the fullest extent.  Very close attention must be paid to the time variable in the struggle against climate changes, without however falling into the trap of interpreting the energy transition phase as a kind of inertia travel that will have no impact on lifestyles or consumption.

It will be essential to adopt an approach that can avert and manage potential conflicts.  However, this crucially important approach in the mature democracies will be possible only if the institutions' respective roles are clearly defined.  In this important exercise it will be essential to reduce the fragmentation of decisionmaking power.