In addition to the casualties and damage caused by wars, which mainly affect people’s lives and the environment, information must also be included among the casualties and damage caused by wars. Unfortunately, it is not uncommon to come across contradictory, fictitious or confusing news that adds anxiety and confusion to the already tragic toll of human lives in war bulletins and also has repercussions on collateral aspects of the conflict itself.
The case of the ongoing war in Ukraine, from this point of view, is particularly significant because it has given rise to a widespread message of alarm about energy supply, risks of blackouts and the transport of goods, accompanied by an unstoppable rise in the prices of raw materials and services which, in essence, would be a consequence of this war.
Prime Minister Draghi himself, in a very confusing way, has done nothing more than certify this alarm, diverting attention from other more substantial causes that are at the root of this situation. In extreme synthesis, Draghi said that:
- There is an ongoing energy crisis;
- There could be suspensions of gas supplies to some industrial sectors and to the thermoelectric sector;
- It will be necessary to import more liquefied gas from the US or Qatar;
- Increased extraction of Italian gas; 5) Increased gas supply to some industrial sectors and the thermoelectric sector;
- Increase gas supply through the TAP and Transmed pipelines (Algeria), as well as from Libya;
- Coal-fired power plants will need to be reactivated;
- Efforts will be made to calm energy prices.
Having cleared the field of spoils such as importing liquefied gas from abroad, given that there are few regasification plants in Italy (something acknowledged by Draghi himself) or increasing the extraction of Italian gas because the wells are already at their maximum, the increase in imports from Libya and Algeria seems a foregone conclusion in a situation of “crisis” such as the one denounced by Draghi. But does this crisis, or rather this supply shortage, really exist and is it related to the ongoing conflict in Ukraine?
In a statement on 26 February, Gazprom said that gas supplies through Ukraine reflected European demand and amounted to 108.1 million cubic metres per day, and that the flow of the Yamal pipeline, which brings gas to Europe via Poland, had also increased. On the other hand, it should be pointed out that the interruption of the Nord Stream 2 undersea pipeline (connecting the Russian network with Germany by sea), which has been much talked about in recent days, has no impact on supplies, as it was never operational due to bureaucratic impediments from the German government, although it was completed. This last aspect has something to do with the current situation, but not in the sense attributed to it by the dominant information. But let us proceed in order. The supply of gas to the European market is guaranteed not only by the fact that there is a large pipeline linking the European network with the Russian (or Algerian or Libyan) fields, but also by a set of large underground gas storage facilities which are absolutely necessary to compensate for any fluctuations in demand due to unforeseen causes (cold winters or increased production of certain products). These storage facilities are managed by European operators (in Italy, Eni) to optimise the quantity of gas purchased abroad with domestic demand. An error in storage forecasts can lead to a criticality in the supply to end consumers, which cannot (or not entirely) be compensated by an increase in the flow of imported gas, both because this has a maximum limit determined by the section of the pipeline, and because supply contracts are made for specific quantities of gas and suddenly renegotiating them is not so obvious. This is exactly what has happened in recent years: European gas distributors underestimated their storage forecasts and found themselves short of reserves at the end of summer 2021, so they asked Gazprom to increase supplies beyond the quantities already agreed. The Nord Stream2 project was conceived by Gazprom, with the blessing of Germany (former chancellor Schroder is a board member of the company that manages the pipeline) and other European countries, all happy to circumvent the bottleneck represented by Ukraine, which since 2014 had made strong claims (and some threats) for Russian gas transit rights.
Completed in 2021, at a cost of $11 billion, Nord Stream 2 was blocked by German antitrust authorities because of Gazprom’s alleged dominant position, something the Russian company evidently did not like, so when European operators asked it to increase supply beyond contracted quantities, it did not agree. It is not difficult to understand, at this point, that the blocking of Nord Stream2 was a political choice of the new German government (the Greens make no secret of this), in this case urged by the United States, which has always opposed it both because of its interest in exporting its own gas, and above all to strike at Russia’s interests.
The measures announced by Draghi are therefore part of this political scenario in which the issue of energy transition is dominant – and even more so in the coming years – so that, on the one hand, the allusions to the reduction of gas supply serve to create a suitable emergency climate to justify both the price increases of fossil fuels (which spills over to many other consumer products), and the use of coal by restarting power plants already closed (such as the one in La Spezia) or postponing their closure as in the case of Civitavecchia. This will have an immediate effect on the ETS (Emissions Trading System), i.e. on the cost of CO2 emitted by each country which, with the use of coal, will increase (today it already exceeds 100 euros per tonne), pushing up the cost of electricity. Will these increases be reversed once the “crisis” is over? Only in part, because the international scenarios opened up by the energy transition, if on the one hand they have led to a decrease – especially in Asian countries – in coal consumption, on the other hand they have increased the demand for gas, which has led to strong instability in demand, which in turn generates what is known in the market as “volatility” in prices. In this context, although Draghi has not mentioned it, the call to review Italy’s position on nuclear energy has resurfaced, with the argument that this energy source would make us independent (see France). Nothing could be further from the truth, because the uranium market is even more closed than the gas market, as it is 85% controlled by seven companies (for extraction) and only four for refining and enrichment services.
The energy transition has set in motion gigantic interests which in turn move irreducible forces ready, if necessary, to use any means to achieve their objectives: it is enough to think that 84% of rare earths, absolutely indispensable for renewable energies and hydrogen production, are concentrated in China and Russia, not to mention other strategic minerals which are also the object of very strong interests. It would be paradoxical if the choice of energy transition, made to save the planet and humanity, were to turn into an all-out war against humanity.