Energia/ Nabucco e South Stream? Dovrebbero fondersi

Di Paolo Scaroni*

Good evening ladies and gentlemen,

I am pleased to be here tonight and thank Daniel Yergin for inviting me to address such a prestigious audience. Around the world, energy and political leaders know how important CERAWeek is and the unique role it plays. A year ago, at CERAWeek, the big issue for the industry would have been oil price volatility: on the 8th of March 2009, oil was trading at 44$ a barrel, less than a third of its precrisis peak.

A year on, oil seems to have settled down quite nicely, between 70 and 80 dollars a barrel, through a combination of supply management from OPEC and the fact that the global economic system has escaped meltdown and shows signs of recovery. The big issue today is no longer volatility in oil, but volatility in the natural gas market. That leads me to my theme this evening. Natural gas is going to be an increasingly important part of our energy future. We believe that at eni, and it is central to our strategy. But we have to understand both what is changing and what the trends are. The gas market has undergone something of a revolution.

On the one hand, the emergence of shale gas has dramatically reduced the need to import gas into the US, freeing up a lot of supply for the rest of the world. On the other, global demand has collapsed owing to the economic crisis and recession. The net result is that, where we used to see a tight market, we now have a world which is awash with gas. Where we used to see gas prices rising year after year, we have now seen them roughly a third compared to their peaks. And where we used to see investment in import infrastructure, we now see almost idle LNG terminals in the US and partly empty import pipelines in Europe. Add this all up, and it looks like concerns about supply security are a thing of the past. But there are three good reasons to believe that supply security will climb back on the global agenda before too long.

The first is that low prices, coupled with the economic recovery, will stimulate a bounce-back in gas demand. Just think - it is now cheaper to generate electricity using gas rather than coal, which clearly provides an incentive to switch to gas wherever possible. In the US, for instance, in the context of a 5% decline in total electricity generation in 2009, gas-fired generation grew by 4%. We can see the same trend everywhere we look: in the UK, for example gasfired electricity production rose by as much as 9% last autumn.