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Future energy. New sources and new markets for the US and Europe

    Presentation of Aspenia 67
    • Rome
    • 20 January 2015

          The panel discussion for the launch of Aspenia 67 focused on the – if not insurmountable, then certainly worrying – energy gap that has arisen between the United States and Europe. On one side is the United States, which has almost achieved energy self-sufficiency thanks to its growing production of shale gas, and on the other is Europe, a sluggish continent which lacks coordinated infrastructure and a common regulatory framework, and which is exposed to serious geopolitical risks to the East (Russia and Ukraine) as well as to the South (the Maghreb and the countries of North Africa). This – it was argued – gives rise to a need for strong political action at the European level in order to rationalize the sector and to respond to the competitive challenges posed by China and Asia in general.

          The OPEC meeting in November 2014, which contrary to past practice left the determination of crude oil prices to the market, was viewed as having only further attested to a crisis that is not merely economic but also geopolitical in nature when it comes to the oil sector. Indeed, price volatility has resulted in fluctuating financial markets and other associated effects that are not very readily manageable, with experts anticipating that this volatility is set to remain a constant in the coming years, spelling bad news for investment as uncertainty often discourages any gamble on the future.

          At the same time, it was acknowledged that low-cost oil is a positive factor for European competitiveness and growth. In light of recent crude oil prices, it was deemed inevitable that the International Monetary Fund will have to revise its recent forecasts upwards. Moreover, neither are the Americans complaining about the low price: however much the revenues of major US corporations might have been affected by it, there is not a politician in Washington who could conceive of proposing an increase in the price of gasoline without stirring up a hornet’s nest of controversy. Indeed, no one has any intention of doing so.

          Besides which, it was felt that the energy gap between the US and the EU is not as fraught a topic today as it was in the past. In order for Europe to rise to the challenge it must – in addition to crude oil – also focus its efforts on gas, by coordinating its installations and overhauling transportation networks, as well as amending current legislation. It was suggested that only in this way, with an emphasis on revisiting regulatory constraints, will the necessary conditions be created for launching Italy and Spain as possible hubs of a new energy strategy.

          In pursuit of this goal, sights are now firmly fixed on the inevitable next step, namely, Africa, and especially sub-Saharan Africa, which has all the potential of shaping up as the big surprise of the next few years. Characterized as a continent with great energy resources and still little demand for them, it was highlighted that Africa boasts countries experiencing growth at a rate of more than 5% a year, with more than 300 million people soon to reach middle-class status. Energy demand was also expected to rise owing to the phenomenon of increasingly more widespread urbanization, due in turn to the good economic performance.

          Rounding off the debate was an acknowledgement that while these are points in favor, certain hurdles and concerns remain. First and foremost is a lack of leadership up to the task of not only providing long-term vision, but also the good governance needed to fight corruption and address the bureaucratic quagmire in which many innovations and best practices become mired. Even so, it was recognized that a clear ineluctable trend is today emerging, with many energy strategies being increasingly redesigned and realigned along a North-South rather than the more traditional East-West axis.

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