On April 17, 2016, Italians have been called to vote on a referendum on the duration of existing oil and gas exploitation and drilling concessions in territorial waters. The aim of the supporters was clear: they held that the referendum could stop the drillings and interrupt the search and extraction of oil and gas within the limit of 12 nautical miles off the coast, i.e. the territorial waters. The intent was explicit and it was based upon several issues: the Italian energy policy, even in consideration of its commitment to limit greenhouse gas emissions, which modify the world climate, and its industrial policy, in order to figure out whether to bet on the few gas and oil fields in Italy, or to concentrate more on other resources such as tourism, agriculture, cultural heritage, environmental protection.
Italians have been asked whether or not to abrogate a clause in the 2016 budget law which allows companies operating in oil and gas fields to keep on with the production until all resources will be extracted. These sort of grants have usually been given for thirty years, and at the end, the company could ask for a first extension of ten years and other two of five years each. The 2016 budget law, however, mention the terms ‘useful life’ of the deposit, which means that a grant can be stretched indefinitely. If “YES” had won, the current active platforms would have continued to work until the end of the legal grants or extension of that, but no further extension would have been given.
In Italy there has been given 94 drilling concessions, 69 within 12 miles, 25 over the 12 miles, the latest were not affected by the referendum. 44 concessions are placed under investigation, of which 30 are specifically owned by Eni, 5 by Edison, 5 by Adriatica Petroli, 5 by Ionio gas. Of all these 39 extract gas, 4 oil and 1 both of them. The total amount of platforms is around 131, of which only 90 involved in the referendum because located within 12 miles from the coast. Moreover, the extraction wells are 726, half of which still do not deliver, but only 484 are affected by the referendum. As for the country’s gas requirements, 88.4% of it is imported, the remaining part is about 11.6%, of which only 3% is coming from platforms within 12 miles. Turning to the domestic oil demand, it is satisfied for a 90.3% with foreign stocks and 9.7% from national stocks of which only 1% comes from within 12 miles.
With regard to the regions affected by the concessions, 6 of the total 8 concessions are the one concerned by the referendum in Veneto, however none of this 8 is currently productive. In Emilia-Romagna there are as many as 31 licences, of which 20 are concerned, but only 18 productive; in the Marche region 14 are the franchises, of which only 5 concerned and all unproductive. Abruzzo has 5 concessions, 3 within 12 miles but only 1 productive. Molise has only 1 concession affected, while in Calabria 5 are concerned,but only three productive; Sicily has 4 licence all within 12 miles, but only 3 productive. Finally, Puglia has only one concession, which is however not affected by the referendum.
So let’s see what the future holds, since the quorum has not been reached. Everything remains as before, the rule governing the activities of research and extraction within 12 miles does not change. Only the platforms that have already been authorized may continue the oil and gas extraction without any time limit. The only limitation is the real reserves of hydrocarbons present beneath the platform. Moreover, authorizations already granted remain valid also for the search of hydrocarbons, but need to be exercised with respect for safety and environmental protection.
The referendum was intended to prevent the renewal of concessions. Another question to ask is whether the failure of the referendum will allow new concessions and drilling over 12 miles. There will be no generalized concessions, since the referendum was only related to the already existing ones within 12 miles, interesting the Adriatic Sea, Ionian Sea and the Strait of Sicily. Only platforms that were already authorized may continue to pull from their fields of competence until to the complete exhaustion of hydrocarbon reserves. As for researches and extraction in marine protected areas, new concessions are still prohibited within 12 miles from the coast, according to the prohibition already present before the referendum without being questioned.
Moreover, even if the referendum would have exceed the quorum, it would not have changed the legal regime in force for the extractions over 12 miles or on land, both cases were not in fact provided in the scope of the referendum. It is therefore rightful to say that the referendum in question had entirely no sense, as long as really few things would have changed, should the outcome have been “YES,” and since most of the questions had already been dealt with by the Stability Law. Moreover, the remaining question was too technical to be subject to a referendum, above all because it would hardly been fully understood by those citizens who should have voted. In addition to that, already in 2014 the “Sblocca Italia” imposed severe restrictions on the environmental impact and the Stability Law tried was already to meet many of the requests from the Presidents of the regions, interested by the concession.
Complains about touristic repercussions, especially like in the case of Emilia-Romagna, seems to me unfounded, because touristic volumes have always remained stable, excluding the peak of the economic crisis, that hit Europe; moreover,there are 4 concessions on the Adriatic coast, many of which date back to the seventies and eighties.
In conclusion, perhaps the failure of the referendum has been an announced failure, but on the other side, a further restriction on drilling and research activities could have been a further reason to limit even more the investments in the country made by foreign oil companies. It should instead be revised the method of redistribution of royalties to the regions, still too low and that could be, if appropriately negotiated, an excellent and constant revenue for regions, such as Basilicata that is one of the largest terrestrial deposits in Europe.
Antonciro Cozzi
Master’s degree in International Relations (LUISS “Guido Carli”)
References
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