Three paths to energy security and Italy's future energy perspectives

This thesis aims to investigate whether a reduction in Russia’s gas supplies to Italy, in accordance with the EU’s energy supply diversification strategy which materialises in the soon-operational “Southern Gas Corridor” project, will effectively contribute to enhancing Italy’s energy security or have inverse consequences. In this context, this work also seeks to analyse the role potentially played by Central Asian countries, as well as alternative markets for Russia’s energy supplies in the event of significantly reduced EU imports of Russian gas. Ultimately, this thesis aims to inspect the feasibility of Italy’s ambition to become a major European energy hub.
This dissertation begins with an analysis of the concept of energy security, intended both as security of supply and security of demand, and of its current major challenges. Subsequently, it analyses the energy outlook, the energy strategy and the foreign energy policy of three case studies, linked by a relationship of mutual interdependence in the energy sector, namely, the Russian Federation, Central Asia and Italy (within the broader EU framework). Indeed, Moscow heavily depends on the revenue from its energy exports to the EU and the EU heavily relies on Russian energy supplies for meeting its energy demand. Italy, in particular, is the EU’s second largest consumer of primary energy, especially natural gas, most of which it imports from the Russian Federation. Nonetheless, Moscow’s rising tensions with Ukraine, where most Russian gas destined to the EU transits, pushed the latter to elaborate a peculiar energy strategy, adopted by Italy as well, aimed at reducing its dependence on Russian gas supplies by increasing gas volumes imported from other suppliers, with the purpose of enhancing its own energy security. In this context, Turkmenistan, which ceased energy relations with Russia in 2016, seeks to supply its natural gas to the EU via the Trans-Caspian pipeline project, while Kazakhstan maintains good energy relations with both the EU and Russia, namely, its top energy export destination and the main transit country for its oil exports to Europe, respectively. Given that this work focuses on Italy’s future energy prospects, the first two case studies are more broadly examined, while a more in-depth analysis is devoted to the third one. In addition, this thesis concentrates on Russia’s, the Central Asian Republics’ and Italy’s held, produced and imported/exported oil and gas resources, with only some marginal reference to renewables, due to the former’s role as the primary source of global energy consumption.
On such grounds, this work will demonstrate that the EU’s and, particularly, Italy’s energy security cannot be enhanced by reducing Russian gas supplies for three main reasons. First, due to the fact that in the current international energy scenario there are no alternative gas suppliers able to compete with Russia’s enormous gas production capacity and, thus, able to compensate for a remarkable reduction in Russian gas supplies to Europe. Second, given that Italy’s other top gas suppliers are at least as unreliable as the Russian Federation, if not more, whether as a result of internal instability or of declining domestic upstream activities. Third, because it is practically inconvenient for the EU and, especially, for Italy, to purchase more expensive gas (including LNG) coming from faraway countries, albeit highly stable. In fact, the only possibility for Italy to effectively enhance its energy security would be to achieve its ambition to become a major European energy hub, realistically feasible in the long run and which, in any case, cannot exclude Russian gas supplies. Meanwhile, the diversification of Russian gas export routes to Europe, currently fostered by Moscow, could significantly reduce the risk of gas supply disruptions.