Energia/ Nabucco e South Stream? Dovrebbero fondersi

The second reason is that gas demand growth is not just driven by a cyclical bounce-back from recent lows. It is a secular trend. One day, alternative energy sources will perhaps replace fossil fuels. But until that happens, gas is the best way we have of combining economic development and environmental preservation - including tackling climate change. Gas is by far the cleanest fossil fuel, emitting 50% less CO2 than coal and 30% less than oil when used to generate one KW/h. Gas can also complement renewable energy; given the intermittent nature of wind and solar power, gas-fired power plants are ideal for providing the necessary swing capacity. ? And finally consumption growth is only one side of the equation.

Low prices are also having an effect on gas supply, causing investment in production and infrastructure to more or less dry up. Gas projects are being postponed all over the world and all along the value chain. All this means that, in the not too distant future, gas will come full circle and we will need to prepare for a tight market, higher prices and concerns about security.

That will not be much of an issue in North America, which will be largely selfsufficient thanks to the shale gas. It will however be very much an issue in Europe and Asia. Just think – in 2009, demand fell by 7% in Europe and 5% in Pacific OECD countries, knocking something like 50bcm off consumption, or, if you prefer 5bcf per day off consumption. Those are coming back – possibly as soon as 2012, assuming the economy recovers. After that, we will see further growth. Overall, between 2009 and 2020, we estimate that Pacific OECD countries will consume an additional 50bcm a year – which will need to come from imports. Meanwhile, China and India will also have to import an extra 60bcm of natural gas as demand growth outstrips production growth. Last but not least, Europe will need to import an extra 180bcm a year, driven by a 100bcm increase in consumption and an 80bcm decline in domestic production. Add this all up, and we are looking at something not far from 300bcm – almost 30bcf a day- of additional import flows to Europe and the Pacific region by 2020. Let’s now take a closer look at Europe, where I would like to focus for a moment because of its importance both for global energy markets and world politics.

What should Europe do to prepare for the next wave of gas demand? Reading the headlines of major international newspapers, one might thing that Europe’s key objective should be to reduce its dependence on Russian gas. But that rather misses two important points. The first is that Russia has been a reliable supplier for over four decades - a period which included the Cold War – and there are no reasons why that should change. The EU and Russia are mutually interdependent, with the EU accounting for two thirds of Russian exports. The second point is that Europe’s reliance on Russia is much smaller than it was twenty years ago. 80% of the growth in European gas imports since 1990 has come from countries other than Russia, Norway, Algeria, Libya, Nigeria and the Middle East. That has resulted in Russia’s share of EU gas imports declining sharply, from 75% in 1990 to just over 40% today. We at eni have contributed to this diversification, being the European company with the most diversified supply portfolio.