Winter is coming

Marta Bernardi
Current events

The matter, therefore, appears even more critical than the oil crisis of the 1970s […] there are only two ways out of this crisis: either the EU and its members work together in solidarity, or each looks after their own backyard, without the slightest regard for those bordering it.

Fans of the high fantasy series will have immediately recognised the quote from the House of Stark’s motto. This is the only familiar motto to stand as a warning to everyone in G.R.R. Martin’s books as it is, unfortunately, to all of us today. Indeed, winter is coming and we are not ready to deal with the effects it will have on our lives. 

The situation is serious, there is no point in skirting around it. The possible scenarios range from problematic to absolute catastrophe. The war in Ukraine and its consequences stress Europe – but not just Europe – giving way to the beginning of a harsh, harsh winter. The supply of Russian natural gas to Europe and Italy at the beginning of 2022 is enormous and is supplied by both inland and offshore pipelines (the much-talked-about Nord Stream and Nord Stream II). When these arteries are no longer usable, both the European Union and individual states will find themselves desperately struggling to cover the needs of their citizens. In Italy, natural gas accounts for about 40% of the country’s energy demand. This is followed by oil (33%) and renewable sources, especially hydroelectric power (20%). Therefore, it is fair to say that Italy runs mainly on natural gas, a resource that largely comes from abroad. In fact, of the 71 billion SCM (the unit of measurement for gas, which stands for standard cubic metre) consumed by Italians in 2020, only 4-5 billion come from Italy, while the remainder are imported. But where from? Holland, Norway, Libya, and Azerbaijan. A portion is imported in liquid form by sea, the so-called LNG, Liquefied Natural Gas. A large portion comes from Algeria, but the largest share, 38% of all imports, is from Russia. The lack of access to this type of energy source is extremely worrying, to say the least.

In an attempt to limit the problem – because we are talking about limiting and not solving, at least not in such a short timeframe – there are two ways to act, necessarily used in tandem: from the supply side and the demand side. The jargon is economic but the interests intertwined with the issue go far beyond the language of the market and are instead geopolitical. Taking action from the supply side implies diversifying both the types of energy sources as well as domestic gas imports by turning elsewhere and, essentially, increasing direct imports from some countries and LNG imports from others. A solution that at first glance seems quick and painless. Sadly, it is far from being so. First of all, gas is not an infinite resource. Increasing imports into a country lead to the diversion of supplies from another source, both in the case of natural gas that is imported through pipelines as well as in the case of LNG. This implies considerable commercial and geopolitical negotiations, plus a steep increase in the price of the raw materials, given their high demand. On this last issue, a commercial limit on the price of gas (and oil) is being discussed in Europe, the results of which, however, are by no means guaranteed mainly because most producers are outside the European scene. 

Secondly, an increase in imports – especially of LNG – implies the necessity to have infrastructures handling this surplus. This is where a sensitive question arises: time, or rather, the lack of it. Building, or adapting existing facilities to make them ready to handle a higher gas input than usually, requires a time frame that is far from short. In fact, of the two floating regasification platforms purchased by the Italian government, designed to handle the increase in LNG from Qatar, Egypt and Congo (and that which is potentially arriving from Angola, Nigeria, Mozambique, Indonesia and Libya, all of which are in negotiations with the Italian government for the sale of this, by now, liquid gold), the former will come into operation ‘in the first months of 2023’, which we can all agree, is not the best time frame.

That is why, at least for the nation’s immediate needs, there has been no talk of investing in renewable energy. While one of the most immediate solutions still implies a series of months of hard work to be usable, the benefits from solar, wind and water sources can only be had in years to come, given the long-term nature required for these projects. This certainly does not imply that taking the path of renewable energy is not worthwhile. Far from it. Today’s crisis should teach us a lesson on how important it is to diversify our energy sources and how vital it is to increasingly develop a renewable energy apparatus, the fruits of which, though, can only be plucked in the long term. Furthermore, as far as renewable energies are concerned, it is necessary to point out that they have a much lower energy density than fossil energies and are therefore not – at least for the time being – suitable for supporting heavy industries, such as the metallurgical industry. The same argument applies – irrespective of the more or less favourable position one may have on it – to nuclear power. The construction and commissioning of such a plant takes an extremely long time and is therefore not suitable for dealing with the current energy crisis.

So, what else is there to consider? The demand side. That is, cutting gas use through rationing and restrictions. In Italy, by means of the National Plan for the Containment of Natural Gas Consumption issued by the MiTE (Ministry of Ecological Transition), limitations and regulations have already been established on the use of thermal systems, both in the domestic sector and in offices and commerce, in addition to the measures related to supply mentioned above. These limitations should, according to MiTE calculations, lead to savings of about three billion SMC. 

In addition to the above-mentioned containment measures, there are others, including the possibility of increasing national production of natural gas – which today contributes about 5 % of Italy’s overall needs – relying on national gas storage, and maximising electricity production from fuels other than gas (bioliquids, fuel oils, and yes, even coal). The disturbing fact, however, is that the Italian government plan as a whole will provide 25 billion SCM of gas by 2025, compared to 30 billion SCM of Russian gas obtained just the day before yesterday. One does not need a particularly sharp mind to notice that the figures, especially considering the timing, do not add up. To accentuate the concerns is another undeniable detail concerning another energy source imported from Russia that could be cut from December: oil

The matter, therefore, appears even more critical than the oil crisis of the 1970s, as the resources that will be curtailed in our case are as many as two. The Head of the International Energy Agency, Fatih Birol, has stated that there are only two ways out of this crisis: either the EU and its members work together in solidarity, or each looks after their own backyard, without the slightest regard for those bordering it. A third, possible way would be to tackle the root of the problem and put an end to the war in Ukraine. The only way to do this is through serious diplomatic avenues, as Luttwak’s infamous “give war a chance” principle is not at all feasible, considering that Russia’s economic and military readiness has been unaffected by sanctions and that Ukraine keeps receiving arms and weaponry from the US.

[1] Fortune Italia. Crisi energetica in Europa: ecco quanto potrebbe essere grave. 

[4]  Adnkronos, Gas Russia, il piano del governo per l’Italia: le misure. 

[5]  MiSE, Bilancio dell’utlizzo di gas naturale 

[6]  Geopop. Crisi energetica – Cosa potrebbe fare l’Italia se la Russia chiudesse i rubinetti del gas? 

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