Economy

Drill Bambino, Drill - Italy's New Energy Policy To Double Hydrocarbon Production

Drilling the Italian soil, for a few barrels more
Drilling the Italian soil, for a few barrels more
Luigi Grassia

ROME - Italy won't be the new Saudi Arabia, but few realize that it does have its own small treasure trove of oil and natural gas, underground and under the seabed.

There is, however, one condition required to benefit from it – not saying "No, grazie!" Italians will only see the gushing of oil and gas if it gets exploited, otherwise it will be as if the treasure trove just didn't exist.

The Italian government’s new energy plan – the National Energetic Strategy (SEN) – was presented this spring to identify industry development guidelines from now unitl 2020. The plan calls for the development of alternative energy, but also proposes to boost exploitation of petroleum and other hydrocarbons.

Italy wants to increase the extraction of hydrocarbons to as many as 24 million barrels of oil per year in 2020. This would be more than double the 11 million produced in 2012. According to the SEN, doubling the hydrocarbon in eight years "will require investments of 15 billion euros, will create 25,000 jobs and will yield savings of five billion euros on the national energy bill a year."

The SEN imposes "the respect of the most elevated international standards in terms of environmental security and protection.”

However, until now, all drilling expansion requests have been rejected. In the province of Novara, one of Italy’s main historical oil extraction centers, a new potential development zone was discovered in Carpignano. However in June, the municipality of Trecate held a referendum and repealed the proposition of Italian multinational oil and gas company Eni to drill a well with an overwhelming majority (93%). In the same province, the request by the British company Northern Petroleum to extract crude oil around Borgomanero was met with a letter of protest from a group of mayors at the end of December.

And it's not just isolated cases – all around the country geologists have been rallying committees who oppose oil extraction in Italy.

Not in my backyard

Davide Tabarelli, head of energy think-tank Nomisma Energia is among the analysts in the sector who sided with the decision to drill Italian gas and oil freely with strict respect for the environment, without yielding to the syndrome known in America as "nimby" (Not In My Backyard).

"In Italy there is a backbone of oil and gas that runs from Novara, down the Appenines to Calabria and goes on to Sicily," explains Tabarelli. "In the Adriatic Sea, there is a parallel line that runs offshore from Chioggia to Gargano. In a century-anda-half in Italy, 7,000 wells have been drilled through, of which 800 are still active."

Tabarelli explains that even on the Tremiti islands, where there is resistance to the drilling, there is already a well, active since 1962, that hasn't caused any damage to the environment. The Italian production could easily double, like SEN predicts, simply drilling where reserves are already known to be. "Instead," he says. "It has all been blocked."

Tabarelli cites the case of in Chioggia: "The environmentalists there didn't want the wells because they said that there is the risk of subsidence, that is that the land would sink or give way. But it's enough to go into the basilica of Saint Vitale in Ravenna to notice that over centuries, the land has only sunk about one meter. In this zone, it's a natural phenomenon, the extraction of oil doesn't even come into it". But isn’t there a risk drilling would cause even more subsidence? "All the geological studies say no. But there is always one person who is willing to say that there is always that danger."

A potential Italian oligarch kingdom is the region of Basilicata. In 2012, this region extracted five out of the 11 million Italian barrels but has untapped resources for another 400 million. Specialists even evaluate a potential one billion barrels. Tabarelli is outraged about the fact that "in Basilicata, even a simple search for deposits was blocked by the region, an act that is potentially unconstitutional.”

Tabarelli is even more determined: "I hope that someone in the next parliament will take responsibility to draft a law that says that once issued by the ministry for the environment, which in Italy is very strict, then local authorities cannot create any obstacles, and if they do, that they will be punished."

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Green

In Argentina, A Visit To World's Highest Solar Energy Park

With loans and solar panels from China, the massive solar park has been opened a year and is already powering the surrounding areas. Now the Chinese supplier is pushing for an expansion.

960,000 solar panels have been installed at the Cauchari park

Silvia Naishtat

CAUCHARI — Driving across the border with Chile into the northwest Argentine department of Susques, you may spot what looks like a black mass in the distance. Arriving at a 4,000-meter altitude in the municipality of Cauchari, what comes into view instead is an assembly of 960,000 solar panels. It is the world's highest photovoltaic (PV) park, which is also the second biggest solar energy facility in Latin America, after Mexico's Aguascalientes plant.

Spread over 800 hectares in an arid landscape, the Cauchari park has been operating for a year, and has so far turned sunshine into 315 megawatts of electricity, enough to power the local provincial capital of Jujuy through the national grid.


It has also generated some $50 million for the province, which Governor Gerardo Morales has allocated to building 239 schools.

Abundant sunshine, low temperatures

The physicist Martín Albornoz says Cauchari, which means "link to the sun," is exposed to the best solar radiation anywhere. The area has 260 days of sunshine, with no smog and relatively low temperatures, which helps keep the panels in optimal conditions.

Its construction began with a loan of more than $331 million from China's Eximbank, which allowed the purchase of panels made in Shanghai. They arrived in Buenos Aires in 2,500 containers and were later trucked a considerable distance to the site in Cauchari . This was a titanic project that required 1,200 builders and 10-ton cranes, but will save some 780,000 tons of CO2 emissions a year.

It is now run by 60 technicians. Its panels, with a 25-year guarantee, follow the sun's path and are cleaned twice a year. The plant is expected to have a service life of 40 years. Its choice of location was based on power lines traced in the 1990s to export power to Chile, now fed by the park.

Chinese engineers working in an office at the Cauchari park

Xinhua/ZUMA

Chinese want to expand

The plant belongs to the public-sector firm Jemse (Jujuy Energía y Minería), created in 2011 by the province's then governor Eduardo Fellner. Jemse's president, Felipe Albornoz, says that once Chinese credits are repaid in 20 years, Cauchari will earn the province $600 million.

The Argentine Energy ministry must now decide on the park's proposed expansion. The Chinese would pay in $200 million, which will help install 400,000 additional panels and generate enough power for the entire province of Jujuy.

The park's CEO, Guillermo Hoerth, observes that state policies are key to turning Jujuy into a green province. "We must change the production model. The world is rapidly cutting fossil fuel emissions. This is a great opportunity," Hoerth says.

The province's energy chief, Mario Pizarro, says in turn that Susques and three other provincial districts are already self-sufficient with clean energy, and three other districts would soon follow.

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