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Italy’s drilling referendum may send three large oilfields into early retirement

by Jacopo Giliberto

In 2015 Italians increased their oil consumption. But they might soon be given a chance to vote in a referendum against drilling in territorial waters. If the quorum is reached and if those promoting the referendum win, operations in three large oilfields will stop soon.

Guendalina (Eni) in the Adriatic Sea; Rospo (Edison) in front of Abruzzo region; and Vega (Edison) in the Sicily Channel are the three oilfields at risk from the possible referendum.

Instead, whatever is the result of the referendum, it will not affect other oil investment programs like Sicily's oilfields Argo and Cassiopea (in front of Gela), whose development is related to Gela's petrochemical industry, nor future researches in the deepest area of the Ionian Sea or off Sardinia's coast where, according to the geologists, there could be significant amounts of oil.

These oilfields are in the Italian economic area of interest, but also in international waters (more than 12 nautical miles from the coast).

It is very unlikely that the government will resort to a change in the laws in an attempt to avoid the referendum. More likely, the date for the referendum will be chosen carefully, maybe coinciding with next spring's administrative elections or with the constitutional referendum that should take place next fall.

From a practical point of view, the government's intention seems to be the blocking of all drilling authorization open requests, through their rejection (starting with the discussed Ombrina Mare oilfield, a few kilometers far from Abruzzo's coast).

In the medium-term, the issue will be solved by the debate the so-called “Titolo Quinto della Costituzione,” which gives Regions the power to decide on energy projects. The need for a referendum on the use of national oil and gas fields arises because of the different points of view of the government and the Regions about energy strategies.

Last year's “Unblock Italy” law reshuffled the “jurisdiction cards” and increased the central government’s power on national resource exploitation.

Among other things, the law introduced an environmental strategic planning (very innovative) to identify along with the citizens and their representatives (Regions, local authorities, associations…) those areas of our country which deserve to be exempted by subsoil resource exploitation. Good heavens.

Ten Regions got furious and last fall presented their request for a referendum.

The referendum question is weak in its content, but very powerful in political-emotional terms. The question put to voters is: “Do the Italian people want the oil and gas fields in their territorial waters to be closed once their concessions expire even if there are still resources in the subsoil?”

The main theme is the concessions' duration. In accordance with the Stability Law, operating oilfields within 12 nautical miles from the coast will have their concessions extended until the exhaustion of gas or oil.

Many oilfields are still full of gas and oil but they were created years ago, when technology was less efficient. With a new authorization and investments in modern technologies those oilfields could be an interesting resource. And these are the projects put at risk by the referendum, the historical oilfields Guendalina, Rospo and Vega which still have useful resources but are very close to their planned early retirement age.

How much oil is there in Italy?

Italy has plenty of energy resources still underused: renewable sources, like geothermy, using earth's internal heat. Italy also has 106 oil platforms in its seas; 113 authorizations for the research of undiscovered oilfields and 202 operating concessions. It imports most of its energy.

But it seems that in the country there is a hidden treasure which could allow not to buy oil and gas from countries where environmental rules aren’t that strict. The national energy strategy, a 2013 political and technical document, establishes that “the total amount of potential hydrocarbons resources is around 700 MTEP”, meaning 700 million equivalent tons of oil.

It means that we could be completely independent in terms of oil for five whole years. Or, if we continue to import oil and gas at today's pace, our oilfields will last more than half a century.

From an absolute point of view, we will benefit from the use of our oilfields both environmentally and economically. Better mining technologies, less transport and emissions affecting the climate, less dangerous tankers in front of our coasts, more wealth.

On the other hand, the exploitation of national oil and gas fields could increase the risk of serious incidents on the field. So far there have been just a few of them: 1950, Cortemaggiore, Piacenza, gas; 1994, Trecate, Novara, oil.

But even if it is just a remote possibility, its consequences would be devastating.