Year LII, 2010, Single Issue, Page 34



The Energy Question and Europe
The Energy Problem.
As the global economy has evolved, the impact of human activity on the environment has become increasingly problematical. This parallel trend has led us to the present situation in which many believe that the very survival of our civilisation is at stake. Global public opinion and governments are particularly alive to the problem of global warming. Most experts now accept that one of the main causes of this phenomenon is the accumulation of carbon dioxide in the atmosphere as a result of the use of fossil fuels — crude oil, natural gas and coal — to produce the energy on which the global economy depends. The disruption of climatic patterns that global warming in turn produces is having very serious negative effects on the environment, on the world’s economies and on international balances.
However, although the effects of global warming are, apparently, already manifesting themselves, and attracting widespread attention, climate change and environmental degradation are not the only problems created by our society’s large-scale consumption of energy. Indeed, there is a serious risk that if we continue to consume oil and natural gas at the current rates, reserves of these fuels may well run out within the next four decades.
Throughout the development of modern civilisation there has been concern over the exhaustion of natural resources. As early as the dawn of the Industrial Revolution, Thomas Malthus, in An Essay on the Principle of Population, first published in 1798, was already highlighting the relationship between population growth and the availability of resources:
I think I may fairly make two postulata. First, That food is necessary to the existence of man. Secondly, That the passion between the sexes is necessary, and will remain nearly in its present state. … Assuming then my postulata as granted, I say that the power of population is indefinitely greater than the power in the earth to produce subsistence for man.[1]
Malthus was immediately criticised, above all for failing to take into account the role of technological innovation and government policies, both capable of favouring harmonious social development. In this regard, Ralph Waldo Emerson’s aphorism, for example, is memorable:
Malthus, when he stated that the mouths went on multiplying geometrically and the food only arithmetically, forgot to say that the human mind was also a factor in political economy, and that the augmenting wants of society would be met by an augmenting power of invention.
Around fifty years after the publication of Malthus’ essay, a certain amount of interest grew up in England around the coal question. To tackle the risk of exhaustion of the mines, which were crucial to the economy of the world’s leading industrial power, the English government began to encourage the development of technologies that would allow coal to be used more efficiently; this led, among other things, to the rise of Watt’s steam engine. William Jevons, however, pointed out that more efficient use of coal would lead to an increase in its use, rather than a decrease:
If the quantity of coal used in a blast furnace, for instance, be diminished in comparison with the yield, the profits of the trade will increase, new capital will be attracted, the price of pig-iron will fall, but the demand for it increase; and eventually the greater number of furnaces will more than make up for the diminished consumption of each.”[2]
Technological innovation, then, can be a double-edged sword: while it is true that technology combined with the market economy and astute government policies have allowed our species to achieve great things over the last few centuries, this has been at the cost of an ever-increasing use of the world’s natural resources, particularly its depletable energy sources.[3] To provide a means of taking this effect into account, economists introduced a unit of measure called “energy returned on energy invested” (EROEI), which expresses the amount of energy gained in relation to the energy expended in order to gain it. It was then noted that the EROEI for fossil fuels declined constantly over the last century: what this trend shows is that it is necessary to produce ever-increasing quantities of energy not only in order to keep the economy running, but also in order to produce the energy it needs.[4] For example, whereas in 1930 a barrel of oil had an EROEI of 100, by the 1970s the ratio had dropped to 1:23. The most recent data, relating to oil, natural gas and coal, give differing values, partly because of a lack of consensus on how EROEI should be calculated, but they are all around the 1:15 mark;[5] the EROEI estimates for non-conventional oils, like bituminous sand oil, and for the use of advanced extraction techniques are even worse. The situation is aggravated by the fact that all the alternative energy sources, from nuclear energy to hydroelectric and renewable energy, have very low EROEI factors. Of the renewable energy sources, only wind power and hydroelectric energy perform better than oil, even though the values they record are, nevertheless, under 1:20; photovoltaic and biomass energy have EROEIs of less than 1:10, while biofuels can even record values of less than 1 (in other words, the amount of energy expended to produce them is greater than the amount derived from their use). The EROEI of nuclear energy appears to be in line with that of oil, although there is uncertainty over the estimates in this case, on account of problems linked to the storing of waste and the dismantling of power stations.
In 1956, M. King Hubbert advanced the theory[6] that production of oil in the United States would peak between 1968 and 1970, after which it would, gradually and inexorably, decline. He found that the production of oil — and of raw materials generally — follows a bell-shaped curve: initially, production increases constantly until the peak is reached, which coincides with the point at which the discovery of new oil deposits is no longer able to compensate for the exhaustion of the ones already being exploited. From this point on, production begins to decline, as rapidly as it had increased. Even though the American economic and political world did not take Hubbert’s prediction seriously, energy production in the USA did indeed peak when he had said it would — 1970 in the case of oil and 1973 in that of natural gas —, after which the United States had to begin increasing its oil imports in order to compensate for the dwindling supply from its own wells. The years that followed were ones of severe global economic crisis and international instability. In 1974, the Six-Day War between Israel and its Arab neighbours caused oil prices to rise and led the OPEC countries to start using the oil embargo as a means of putting pressure on the Western powers, exploiting their dependence on this raw material. In the same decade, the Club of Rome[7] attracted the attention of public opinion worldwide following the publication, in 1972, of its report The Limits of Growth. This report, based on a computer model of the global economy, created and subsequently refined at the Massachusetts Institute of Technology (MIT), predicted that economic growth could not go on indefinitely on account of limits imposed by the availability of natural resources and the Earth’s capacity to absorb polluting substances. As in Malthus’ case, the model on which the Club based its conclusions was criticised by economists, who felt that it did not properly take into account the roles of the market and of technological innovation. Indeed, according to classical economic theory, when a commodity begins to be in short supply, its value increases, making it opportune to invest in technological research to identify a less costly alternative to it, or to find ways of using it more efficiently.
Despite the interest initially aroused by the report The Limits of Growth, the overcoming of the 1970s oil crisis fed a general conviction that the predictions of the Club of Rome would not come true and this issue was soon dropped. It is true that the ground still contains large quantities of oil that, according to some sector experts, could see the world economy through another hundred years.[8] The problem, however, is that the technologies needed to find and extract this oil are becoming increasingly costly, both in economic and in energy terms, a fact that lends weight to the idea that EROEIs are declining. Nowadays it is possible to reach oil that lies under 6000 metres of rock in seas that are 3000 metres deep; to extend the life of wells, or to extract oil that is too thick for traditional methods, it is possible to inject steam, natural gas and water, or carbon dioxide in order to push the oil to the surface; the possibility of using chemical solvents and microbes to make thick oil less viscous is being explored; fires are also lit in oil fields to render the oil more fluid, exploiting the pressure produced to drive it upwards. The devastating explosion of the BP oil platform in the Gulf of Mexico shows us, however, just how a high price can be paid for these new technologies. In short, it cannot be assumed that technological advances will automatically result in achievement of the objectives that have been set. When oil prices were sky high in the 1970s and ‘80s, huge investments were made in research into nuclear fusion, yet without producing the expected results; now, this source of energy is no longer even considered a valid alternative to fossil fuels.
We Are Running a Real Risk.
Despite the economists’ criticisms and the scepticism on the part of sector operators, data are now emerging that bear out the forecasts of the economic model on which the limits of growth theory is based: if we take the level of carbon dioxide in the atmosphere as an indicator of pollution and the prices of the main raw materials as indicators of the availability of resources, and consider the two-hundred year period from 1900 to 2100, the current values are substantially in line with the forecasted ones. Unless countermeasures are taken, and in time, the effects of the limits of growth could already be manifesting themselves in a few years’ time — in around 2020.[9]
As far as oil supplies are concerned, the data seem to show that Hubbert’s peak was reached in around 2008 and that we have now entered the plateau phase supposed to precede the decline in the availability of this resource. According to figures released by the Association for the Study of Oil and Gas, even though oil consumption is continuing to increase, for the past three decades, i.e. since the end of the last intensive period of drilling activity (the one that followed the end of the 1970s oil crisis), the amount of new oil discovered each year has been falling sharply. Added to this, the first decade of the new century saw an exponential increase in the price of oil, which rose from around 20$ a barrel in 2000 to more than 130$ in 2008, the year in which the present financial and economic crisis exploded. Even though this crisis provoked an economic recession that caused the price to tumble, it quickly started to rise again, and this rise will probably become vertical as soon as the world economy starts to pick up. The 2008 food crisis was linked to rising oil prices and to the use of corn to produce biofuels and it can be regarded as a foretaste of the dramatic global crises we could see in the future.
Thus, several international bodies and organisations have started sending out alarm signals. The International Energy Agency (IEA) recently warned that 2013 will see a crisis, due to oil shortages, worse than the one experienced in 2009: according to the IEA, when the economy starts to recover, there will inevitably be an oil supply crisis, since most oil companies, despite the fact that many important oil reserves have started to fail, have postponed or cancelled the exploration programmes and other investments necessary for continued extraction. As a result, the IEA says, oil prices are destined to rocket once again; this will stifle the nascent economic growth and produce another very serious recession.
The United Kingdom has set up a parliamentary commission to monitor the oil peak issue, while its government, on 22 March, 2010, held a meeting (kept secret) with around twenty representatives of industry and experts on this topic. All the reports presented on that occasion highlighted the extreme severity of the problem, the lack of awareness among governments and the need for immediate action. Yet the debate that ensued can only be described as disturbing, because in the face of the very real risk (recognised by everyone present) that the problems could start to manifest themselves within as little as three or four years, the proposals advanced all revolved around interventions at national and local level, it being taken for granted that the forces of the market cannot be opposed and that the role of politics is inevitably changing: from the redistribution of wealth to the dividing up of an increasingly small pie.
Certainly, even though the Western countries, being less equipped than China and India to cope with volatile prices, are bound to be more severely affected by the problem of energy in irregular and short supply, the European governments, when they are not ignoring the problem, seem resigned to playing a low-key role, which consists of merely guiding the transition towards the more sober models of life imposed by a low-energy world, while seeking to avoid social conflict. In particular, no one seems to have any ideas on how the countries deeply indebted by the financial and economic crisis, which are major importers of energy, might find the resources to fund the major investments they desperately need to make.
The most detailed analysis of the oil peak problem to date produced by a government is the 2005 report prepared by Robert Hirsh for the US Department of Energy. After beginning by explaining that the global oil peak exposes the USA and the whole world to the risk of an unprecedented crisis, whose effects — economic, social and political — would be dramatic, the report sets out three alternative scenarios relating to the different time scales with which the USA and the world might respond to this challenge. To prevent the negative effects of oil depletion from manifesting themselves, counter-measures need to be taken at least 20 years before the oil supply curve starts to drop; if, instead, these measures are introduced 10 years late, it will still be possible to mitigate the effects of energy shortages, but the world will suffer a decade of scarcity; instead, waiting for the first consequences of the peak to manifest themselves will, instead, expose the world to two decades of crisis.
There Is Still a Long Way To Go.
Even though a clear awareness of this problem has yet to emerge at the level of governments and public opinion, it is, in practice, already possible to see two distinct but parallel lines of conduct emerging, both geared at reducing the risks linked to energy dependence: first, people are being encouraged to reduce consumption of fossil fuels through energy saving strategies and the replacement of these fuels with alternative energy sources, and second, governments are moving carefully on the international stage, seeking, in a climate of increasingly fierce competition between the states and especially between the most important ones, to ensure that the necessary supplies are constantly available.
The US and Europe, as well as striving to increase the efficiency of means of transport and production processes, are also focusing on replacing fossil fuels with nuclear energy; prominent, too, are their policies to develop renewable energy sources. At world level, we are currently in a situation in which wind, solar and biomass energy covers between just 1 per cent (Japan) and 6 per cent (Europe) of the energy needs of the most developed countries; to this we can add the approximately 8 per cent covered by hydroelectric and geothermal energy (a share that seems unlikely to increase further). The level of commitment and investment poured into the development of renewable energy sources (both in the ambit of technological research and in that of the creation of plants and infrastructures) will have to be considerable if these sources are to become a real, credible alternative to traditional fuels.
Obama, shortly after his instatement as President of the United States, stated that “the nation that leads the world in clean energy will lead the global economy”. The current drive towards renewable energy is thus strong in America and is part of the US government’s strategy to support the economy through the present crisis situation, create jobs and reduce the nation’s dependence on imports. Even though the 2009 recession put the brakes this trend, over the previous five years, the power produced by wind turbines had increased at a rate of 40 per cent a year, which is in line with the results recorded in the fields of solar energy and other energy sources, thanks above all to subsidies from both the central government and the state governments. In 2006, for example, the state of California, under the California Solar Initiative, launched its Million Solar Roofs programme, aiming to install 3 gigawatts of solar capacity (solar panels) on the roofs of homes by 2016. October 2009 saw the completion of the Roscoe Wind Farm in Texas, which covers an area of over 320 km2, has 630 turbines and cost 1 billion dollars; built by German power giant E.ON, it has a total capacity of 782 megawatts which allows it to power more than 200,000 homes.
The size of the installations is, in fact, one of the biggest problems of alternative energy sources and a main focus of technological research. One need only consider that the Roscoe Wind Farm, currently the largest in the world, barely supplies the amount of power generated by a medium-sized/large gas powered plant. In this field China is particularly active given that, thanks to the size of the Chinese state, its centralised development policies and the government’s tight control on the economy, it is in a position to channel vast financial resources into targeted projects. China indeed has some colossal projects in the pipeline, which few countries will be able to match. It plans to build a 2-gigawatt solar thermal power plant, which will be four times as powerful as the two plants that the USA is due to start building in 2011 in the Mojave Desert. In the field of wind power, China has a project for a farm 25 times the size of the Roscoe Wind Farm, and in the photovoltaic sector it has plans for a 2-gigawatt plant, which will be 33 times bigger than the one (in Spain) that is currently the largest.
The European countries are struggling to keep up with the USA and China in this field. With the 20-20-20 programme they have set themselves some ambitious targets in terms of the spread of renewable energy sources and energy saving, one of which is to meet 20 per cent of total energy demand from renewable sourcesby2020. But instead of creating a single programme and setting aside the resources that would make it possible to follow a single political direction, the European Union has opted to entrust the implementation of the programme to the member states, many of which have already expressed doubts over some of its objectives. The European states actively promote the policy of incentives for energy saving and for domestic and small-scale renewable energy installations, the only ones that can be implemented relatively efficiently at national level, whereas the larger and more important projects are left to the initiative of private industry and to the sphere of cooperation between states. One of the most ambitious European projects is the one to build, at a cost of around 30 billion euros, a large electrical energy grid (Supergrid) which will network the offshorewind turbines of the North Sea, Germany’s solar panels and Norway’s hydroelectric dams. The aim is to provide the countries participating in the project with a continuous supply of clean electrical energy. With all the energy coming from a single grid, changing weather conditions in the areas involved will not be a problem, and any surplus energy will be used to pump water into the Norwegian hydroelectric reservoirs, to be used when weather conditions are unfavourable.
In Europe, it is private companies that are behind what is, to date, the most ambitious project in the field of renewable energy: in December 2009, a group of leading banks and multinational enterprises (mainly German) operating in the energy sector created the Desertec Foundation which aims to create, in North Africa, a network of concentrated solar power plants, capable, by 2050, of covering 15 per cent of Europe’s electrical energy needs. The plan is to use around 80 per cent of the electricity generated by this network to meet local demand, exporting the other 20 per cent to Europe. The idea underlying the project is actually even broader — to link up the solar power plants with a series of offshore wind farms along the Atlantic coast of Europe and Africa and with hydroelectric power stations and photovoltaic and biomass installations located within European territory. The foundation is currently carrying out lobbying activities and feasibility studies in a bid to draw new companies into the project, generate political will in the states involved, secure the necessary investments, and modify the laws and regulations that impede the project. The foundation estimates that it would take 45 billion euros to produce 100 gigawatts of energy, a sum that is within the capacity of the enterprises and states involved: considering that the cost would be shared among 30 states and spread over 10 years, each state would only have to invest around 150 million euros a year. The Desertec consortium has achieved a first important objective, getting the project included among those promoted by the Union for the Mediterranean (so important to Sarkozy), but the chances of this project — already highly ambitious — succeeding are jeopardised by the climate of distrust currently dominating relations between Europe and the countries of North Africa, a climate fuelled by talk of terrorism and by the political instability of North Africa and the Middle East, and further aggravated by the political weakness of Europe.
The Problems of Electricity Grids.
One of the merits of the Supergrid and Desertec projects is the fact that they have highlighted the problems linked to the major changes that will have to be made to electricity grids if they are to be able to cope with the demands placed on them by the new models of production and consumption of electrical energy. The present grids were created over a very long period of time, from 1800 onwards, on the basis of a hierarchical model in which electricity is produced by large centralised generators in order to exploit factors of scale, and distributed to users via a dense and extensive distribution network; for this system to work, a very strict control mechanism must be in place to regulate the amount of energy produced, ensuring that it always corresponds, exactly, to the amount consumed: if the level of consumption exceeds the production capacity, due to unforeseen peaks in demand or problems with plants or power lines, the grid collapses, leaving vast areas without electricity. Unfortunately, the new sources of renewable energy, like the wind and the sun, cannot be regulated and their availability is difficult to predict. If the percentage of energy produced from these sources becomes significant, it will be even more difficult to regulate production levels in such a way as to ensure that production always corresponds to demand (wind turbines, for example, are sometimes deactivated even when it is windy, precisely in order to avoid overloading the grid). The present electricity grids, therefore, are not ready for a future in which recourse to wind and solar power will be constantly on the increase.
Furthermore, the growing trend to produce energy from renewable sources is having the effect of modifying the topology of electrical energy production and distribution systems. Whereas the production of electrical energy is currently concentrated in few places and entrusted to large-capacity power stations, the growth and spread of renewable energy will increase the number of “producers” (companies and families) of electrical energy: this will result in a meshed rather than a hierarchical network, in which energy can be generated and consumed locally, as well as collected and distributed over large distances.
On the electrical energy consumption side, too, new requirements are emerging and, together with those of production, throwing the current organisation of distribution networks into disarray. Industry and governments today see electric cars as the main means of reducing pollution and saving energy. The Electrification Coalition, an association of business leaders including Nissan, Cisco Systems, PG&E and Johnson Controls, created in the USA to promote policies and initiatives that will facilitate the spread of electric vehicles on a mass scale, recently issued a report[10] highlighting not only the challenges faced in relation to technology and industrial reconversion, but also the changes that will have to be made to the infrastructures in order to allow 75 per cent of cars to be electric by 2040. There can be no spread of electric cars without a radical overhaul of the current electricity marketing models and without a dense and extensive network capable of delivering the high power levels needed to charge vehicle batteries quickly.
If both energy demand and the quantities of energy produced become difficult to predict, it will clearly become impossible, in the future, to control and manage grids using the current systems. The answer is to introduce intelligence into the systems (there is, indeed, talk of “smart grids”), creating networks of sensors and computers whose distribution matches the distribution of the points of energy production and consumption. To achieve this, projects are under way throughout the world to replace traditional meters with intelligent meters that can be read and monitored through the telecommunications network, thereby making it possible to collect highly detailed information on levels of demand and production capacity. The subsequent step will be to develop the information infrastructure necessary to regulate both energy demand and energy supply. It will also have to be made possible to apply complex pricing policies, with prices differing according to the availability of energy and the different uses, even to the point of being able to charge for the electricity supplied by a single plug. To maximise the efficiency of the system, the network should also be capable of distributing energy automatically between the production centres and the points of consumption.
In Europe, the European Commission is striving to promote the regulatory reforms and technological innovation necessary to safeguard the leadership of European companies in this sector.[11] Among these, ENEL, for example, is playing an important part: it was one of the first utilities to replace all its customers’ traditional meters and it has launched a 77 million euro pilot project to install new-generation medium-voltage substations in the electricity distribution network. However, in this field, too, it is the USA and China that are setting the pace: on 27 October, 2009, Obama announced a 3.4 billion dollar smart-grid programme that takes to 7.1 billion dollars the total spent by the USA Department of Energy on modernising the country’s electrical energy network. According to a Bloomberg report on 26 May, 2009, China’s expenditure on extending and modernising its state grid could reach 10 million dollars a year; in 2012, when the current five-year economic plan comes to an end, China will have a system of sensors and meters covering the whole of the country;[12] furthermore, its main electricity distributor, China State Grid Corp., plans to build a national smart grid by 2020.
Europe and the Question of Secure Supplies.
The United States is currently the only major power capable of acting at world level in order to secure its oil and natural gas supplies. Control of the oil fields, particularly those of the volatile Middle East, is perceived by the USA as crucial to the success of its policy to reaffirm its role as the leader of the international community in the wake of the Bush era. Meanwhile, China, for its part, is entering into agreements with Russia, and with oil producers in the Middle East, Africa and South America, in order to guarantee its supply of the energy on which its growing economy depends; in this context, China is able to exploit its vast financial resources, offering to invest in the infrastructures and economies of countries ready to supply it with energy. By contrast, Europe’s capacity for action is woefully inadequate. The EU member states, despite together forming the world’s second largest economy and despite their great dependence on imported fossil fuels, have still not managed to create a common energy policy. Furthermore, the European Union does not carry enough weight on the international stage to guarantee its own energy supplies.
The situation is particularly critical with regard to natural gas. Europe has always been a net importer of energy and in particular of natural gas. Whereas it can choose from a number of suppliers of oil, which is transported by sea, in the field of natural gas Europe depends on its supplies from one country, Russia, which is also the main threat to its security. In 2007, gas imported from Russia covered a quarter of Europe’s total gas needs, and accounted for a hefty three-fifths of the total imported. If, instead, we consider the absolute values, we find that these, too, are very high and are destined to go on increasing in the future, in spite of the trend towards alternative energy sources.
Even though liquefied natural gas (LNG) can be transported by sea, the tankers that carry it and the systems used to load and unload it are based on sophisticated technologies and demand large investments; therefore, when gas has to travel distances of less than three or four thousand kilometres, it is more economical to transport it via high-pressure gas pipelines, which, however, can only connect the wells with the specific consumer basins for which they were built. Whereas, on the one hand, this favours the establishment of long-term supply contracts, which guarantee, in terms of quantities and prices, more stable supplies than are possible in the case of oil, on the other, these supplies are much more inflexible and greatly influenced by the policies of the producer, of the consumers, and also of the states through which the pipelines run. To ensure the stability and security of gas supplies, it would be in the EU’s interests to build a strategic partnership with Russia and to encourage the stabilisation of that country and of all the countries crossedby the gas pipelines that supply Europe. From the Russian point of view, too, closer links between Russia and Europe would render its energy exports more secure, and thus the financial income they bring. Instead, confusion reigns in Europe over the question of Russian gas, which is unsettling. Basically, in spite of all the declarations in support of a common European energy policy, each EU member state is still negotiating its own agreements and striving to resolve independently the problem of its own energy supplies. The incapacity of the European Union to represent a reliable partner for Russia in the energy field was clearly demonstrated by the outcome of the EU-Russia summit held in Helsinki in the autumn of2006. The European Union had been trying for years to get the Kremlin to sign a treaty that would make it easier for European companies to invest in the energy sector in Russia, and would also allow them to use Russian gas pipelines. Prior to the summit, Putin, in return, had requested that Russian companies be allowed to invest in western Europe; in addition, he had asked Europe to use its influence to get the United States to ease its restrictions on US exports of high technology, and had also requested that the treaty include measures to open up the nuclear fuel market in which Russia was investing. Putin’s intention, in advancing these requests, was to show that the two sides were dealing with each other on an equal footing, and also to increase Russia’s integration into the Western world. However, the Europeans proved unable to respond to the Russian requests. Despite this, during the summit, the European Commission, led by Barroso, nevertheless invited the Russians to sign the treaty; the Russians refused.
The weaknesses of the European Union and Russia, and their incapacity to establish stable and coherent relations with each other, foster instability in eastern Europe and give the United States an opportunity to influence, in an anti-Russian sense, the policies of the eastern European states. The Russian-Ukrainiangas crises are the most dramatic symptom of this situation, which Europe has tried to address by shouldering most of the costs of building a new gas pipeline, North Stream, which will avoid the countries of eastern Europe. The pipeline, which will become operational in September 2011, links Russia with Germany, passing under the Finnish, Swedish and Danish waters of the Baltic Sea and increasing the strategic importance of Germany in the field of gas supplies to western Europe. Furthermore, wanting to give Europe an alternative to Russian gas, the European Commission, with the support of the United States, launched the Nabucco pipeline project. This pipeline is to connect Austria with the Caucasus, where large quantities of gas have been discovered, and potentially also with deposits in Iran and the Middle East (via Turkey, Bulgaria, Romania and Hungary).
But even with these new infrastructures in place, Europe will still not be rid of its dependence on the gas supplied via the pipelines that cross the Ukraine and Belarus, which will continue to carry a large share of the gas Europe needs; neither will it be free of its dependence on Russia, which will still be able to use the threat of cutting gas supplies as a lever against Europe. Russia responded to Nabucco by deciding to build South Stream, a pipeline that will connect Russian and Caucasian gas fields to Italy via the Black Sea, Bulgaria, Serbia, Hungary and Slovenia. South Stream, furthermore, seems to be ahead in the race between these two pipelines since Russia is proving to be better than the European Commission at reaching agreements with the governments of the Caucasian states in order to reserve gas supplies; the Europeans on the other hand, wary of upsetting the Russians in the delicate ambit of energy supplies, but also of upsetting the United States by failing to support its policy to contain Russia, are being less whole-hearted in their support of Nabucco.
The Risks and Opportunities for Europe.
With regard to the energy question, the performance of Europe, weak and divided, is severely lacking on all fronts: it is failing to come up with alternatives to fossil fuels, failing to make the investments necessary to build the new electrical network that is so badly needed, and trailing in the international race to secure access to the traditional energy sources that will continue to be indispensable for a long time to come. Energy security and energy questions generally are perceived by the governments, justifiably, as issues central to the interests of their countries that, for this reason, cannot referred to the present European institutions, which, as events have clearly shown, are not the place in which strategic questions can be dealt with efficiently. The European Union, despite having long discussed this issue, has failed to draw up a common energy plan — a plan that would not only provide European society with a concrete example of a collective programme, but also allow the building of the crucial political framework of reference in which other initiatives, in the industrial, social and research fields, could also be developed and implemented. Indeed, such a programme, to be created and realised, demands instruments of government that, being typical of states, the EU institutions lack; furthermore, the single European states, even the largest ones, are simply unable to muster the level of resources, human, economic and financial, that are required. In short, neither the European Union nor the single European states currently have the capacity to unite companies, research centres and citizens in a great common effort to tackle the challenges presented by the energy question. As long as Europe continues to lack a federal state, the outlook for the Europeans will remain bleak: European enterprises will be increasingly at a disadvantage compared with their competitors from the large continental states and will lose the position of leadership that, at present, they still occupy in the energy field; the European states will find themselves ill-prepared to tackle the crises that are looming, and their citizens will be forced, more than others, to suffer their dramatic consequences.
The consequences of the absence of a European federal state are apparent not only at domestic level, in the ambit of the economic, fiscal and innovation policies necessary to rise to the challenges of technological progress in the energy field, but also at European level, in the field of energy security. In a world that is becoming multipolar and in which the United States’ role as the guarantor of international order and of free access to raw materials is no longer unchallenged, Europe is not in a position to rely, as it once did, on American support to ensure its access, at favourable conditions, to the energy market. As we have seen, the energy problem will be an enduring one and we face a future in which energy will become a more and more valuable commodity that is increasingly difficult to source. In a world of growing energy scarcity, competition between countries increasingly short of this resource will become fierce. As the history of the past hundred years confirms, the need to secure energy supplies has always been one of the most sensitive issues for modern states; as the reality of dwindling oil supplies begins to hit, we will see an increase in the forces tending to turn the current competition, governed by economic laws, into a lawless struggle in which the political weight of the rival parties will easily prevail over the rules of the free market. This tendency could even undermine the very foundations of the current global economy, and have unimaginable consequences.[13] Today it is already possible to see the premonitory signs of new international conflicts in the energy field: the decision of the US congress to prohibit Chinese enterprises from acquiring shares in American companies operating in the energy sector; China and India’s agreement to strengthen their presence in the international energy industry and to work together to gain control of the fields useful to the development of their economies; Russia’s decision to renationalise its energy sector, also with a view to using energy as a lever, to influence its relations with its European and Asian neighbours.[14] In this competitive scenario, once again, neither the European Union nor the single European states have the possibility of playing a significant role.
It is not only at the level of the world’s major powers that interests and raison d’état within the energy sector have started to diverge; this trend is even emerging within Europe. In the absence of a European energy policy, the main European states are finding themselves having to compete with each other for access to energy sources. Germany, in particular, is abandoning its old fears about acting independently on the international stage and is trying to use its economic and political weight to secure the resources it needs, even if this means openly setting itself (as in the case of policies pursued in Africa) in opposition to France. Furthermore, thanks to its economic power and its geographical location at the heart of Europe, Germany is the main collecting point for Europe’sprimary energy imports; from this perspective, the creation of the new North Stream gas pipeline is an important development. This is a role that already makes Germany well placed to become a partner to Russia and it is one that the country may in the future exploit in order to affirm itself as Europe’s main regional power. The links between the energy question and European defence have always been fundamentally important. One need only recall that the whole process of European integration began with the creation, sixty years ago, of the European Coal and Steel Community (ECSC). Robert Shuman, in his declaration on May 9, 1950, indicated both the final objective of the process that was being started — European federation — and the instrument through which it could be achieved: he spoke of the decision, taken by a group of key European states, to transfer to a “High Authority” real power capable of defusing a crisis situation that was threatening Europe.[15] Sixty years on, the problem of energy is very much to the fore again and its re-emergence has shown that the common market and cooperation between governments are no longer enough to guarantee Europe’s wellbeing and security.
The energy question is just one of the many questions that the European Union is unable to tackle due to the shortcomings in its institutional framework that the new Lisbon Treaty has failed to remedy. In this setting, Europe’s citizens have gone back to asking their own governments, increasingly forcibly, for the things that Europe cannot give them. What they do not realise is that, by so doing, they are favouring the re-emergence of the old divisions that had seemed definitively consigned to the past, and are forcing their economic and political systems to compete with those of their neighbours at a time when there is far more need for the European Union to rise, as one, to the challenges of international competition.
If it is true that intergovernmental cooperation has lost its driving force and is probably no longer able to guarantee the European Union a future, it is also true that it is no longer enough to tackle separately the challenges that the world is presenting us with, creating new “High Authorities” in specific fields and not altering the European states’ essential prerogatives. Jacques Delors, in a recent study of the energy question, proposed setting up a European Energy Community using the instrument of enhanced cooperation envisaged by Lisbon Treaty.[16] But, as this article has tried to show, the domestic and international challenges connected with the energy question are now such that only a state of continental dimensions can guarantee the necessary level of involvement of the citizens and production forces, and the necessary instruments of government. Delors recalls that “When six European states decided in 1951 to integrate two key sectors of their economies to create a Community, their purpose was to replace conflict with cooperation and antagonism with prosperity”.[17] Anyone who harks back to the example of the ECSC should, however, have the honesty to recall that that experience succeeded because the objective of the European federation was not just a rhetorical expedient, but rather the fundamental principle that made cooperation between France and Germany possible. The faltering pursuit of that objective explains the present difficulties now afflicting the European Union and the very serious risks, illustrated by the crisis of the single currency, that it is now running.
What is needed is for Europe’s leaders to appreciate the responsibilities they bear, not only towards their electorate, but also towards the future of Europe as a whole. In particular, it is up to the leaders of the European countries that led the integration process, and in which the idea of a united Europe is still alive, to exploit the opportunities offered by the crisis that Europe is going through in order to take the initiative and found the United States of Europe, restricting the endeavour, initially at least, to their countries — the only ones that can give Europe a future again.

[1] Thomas Robert Malthus, An Essay on the Principle of Population (first edition), Chapter 1, 1798.
[2] William Stanley Jevons, The Coal Question (2nd ed.), London, Macmillan and Co, Chapter 7, 1866.
[3] Charles A.S. Hall, John W. Day, Jr., “Revisiting the Limits to Growth After Peak Oil”, American Scientist, 97, n. 3, May-June 2009, p. 230.
[4] C.J. Cleveland, R. Costanza, C.A.S. Hall, R. Kaufmann, “Energy and the U.S. Economy: A Biophysical Perspective”, Science, New Series, 225, n. 4665, Aug. 31, 1984, pp. 890-897.
[5] Charles A.S. Hall, John W. Day, Jr., op. cit., Fig. 5.
[6] M. King Hubbert, “Nuclear Energy and Fossil Fuels”, report presented at the Spring Meeting of the Southern District Division of Production, Drilling and Production Practice, American Petroleum Institute, 1956.
[7] The Club of Rome was founded in 1968 by Italian entrepreneur Aurelio Peccei and Scottish scientist Alexander King with the aim of bringing together eminent entrepreneurs, scientists, intellectuals and political leaders interested in analysing the changes taking place in our society and, in particular, problems relating to limits on the consumption of resources in an increasingly interdependent world.
[8] L. Maugeri, “Squeezing More Oil Out of the Ground”, Scientific American, October 2009.
[9] G.M. Turner, “A Comparison of the Limits of Growth with 30 Years of Reality”, Global Environmental Change, 18, n. 3, August 2008, pp. 397-411.
[10] Electrification Roadmap – Revolutionizing Transportation and Achieving Energy Security, Electrification Coalition, November 2009.
[11] In 2005, the European Commission created the European Technology Platform (ETP) for the Electricity Networks of the Future (Smart Grids), which brings together all European sector operators with the aim of making the EU more competitive in the electricity networks sector. The documents produced by the Smart Grids Platform can be consulted on the official website:
[12] Panel Session: Developments in Power Generation and Transmission — Infrastructures in China, IEEE 2007 General Meeting, Tampa, FL, USA, 24–28 June 2007. Electric Power, ABB Power T&D Company, and Tennessee Valley Authority (Institute of Electrical and Electronics Engineers).
[13] M.R. Simmons, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, New York, Wiley, 2005.
[14] Uno Stato federale europeo per affrontare il problema energetico, document of the “Campagna per lo Stato federale europeo” published with the support of the Mario and Valeria Albertini Foundation,, February 2006.
[15] Robert Shuman said, in his declaration: “By pooling basic production and by instituting a new High Authority, whose decisions will bind France, Germany and other member countries, this proposal will lead to the realisation of the first concrete foundation of a European federation indispensable to the preservation of peace.” And, further on: “The essential principles and undertakings defined above will be the subject of a treaty signed between the states and submitted for the ratification of their parliaments. The negotiations… will be undertaken with the help of an arbitrator appointed by common agreement. He will be entrusted with the task of seeing that the agreements reached conform with the principles laid down, and, in the event of a deadlock, he will decide what solution is to be adopted.”
[16] Sami Andoura, Leigth Hancher, Marc Van Der Woude, Towards a European Energy Community: A Policy Proposal, Notre Europe, March 2010.
[17] Jacques Delors, “A Call for a European Energy Community”, in Towards a European Energy Community: A Policy Proposal, op. cit.

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