Energy CEO calls out Europe’s ‘foolish’ dependence on natural gas

Date:

Enel’s Francesco Starace photographed at the World Economic Forum in Switzerland on May 24, 2022. During an interview with CNBC on Friday, Starace said reliance on gas was “foolish.”

Jason Alden | Bloomberg | Getty Images

The CEO of Italian energy company Enel told CNBC on Friday that Europe’s reliance on natural gas was “foolish” and argued that reduced reliance on fossil fuels would be a better option in the long run.

“I think we’ve finally understood how addicted we were to gas, how foolish this dependence is and how we can fix this,” said Francesco Starace, who spoke with CNBC’s Steve Sedgwick.

During an interview at the Ambrosetti Forum in Italy, Starace was told that, according to some, oil and gas would be crucial for energy over the next 25 years, a statement he disputed.

“I don’t agree at all, because this is an opinion that comes from, say, 15 years ago,” he said. “Was that wrong then? No, it wasn’t. Now it’s wrong.”

“The economy can work much better, much less dependent on fossil fuels than people think,” he added. “It might be another two years before everyone understands that — but we’re here.”

Read more about energy from CNBC Pro

Despite this optimism about the future, today’s reality is a huge challenge.

The current situation in Europe, where many countries are trying to rid themselves of Russian energy after the invasion of Ukraine by the Kremlin, illustrates the crucial role fossil fuels still play in society.

As the colder months approach, European countries have sought to strengthen gas storage in an effort to ensure security of supply.

Looking ahead, Enel’s Starace expressed confidence that Europe had prepared for the coming winter.

“In terms of storage, Europe … did the right thing,” he said, noting that most countries were “pretty full.”

“Now the question is what will happen if the gas from Russia is cut off altogether,” Starace continued. “Well, we’re almost there, the cut is actually almost there.”

“We have an opinion, and there are many studies showing that with some sacrifice, [such as] two steps lower in temperature, and a little attention to gas consumption… Europe can survive the winter.”

“The question is when will we get to spring” [of] 2023 with fully depleted reserves, and still no gas flowing,” he said.

“Can Europe restore the storage, with all the backup from floating regasifiers and energy from other parts of the world? I think that’s going to be the big challenge.”

The Enel Group – whose main shareholder is the Italian Ministry of Economy and Finance – has said it will stop gas production by 2040. It also plans to exit the retail gas market in 2040.

European concerns

Starace’s comments came on the same day that EU climate chief Frans Timmermans stressed the urgency of the situation facing European economies in the face of rising energy prices and supply concerns.

“We must do everything we can to face this energy crisis and make sure that we do everything we can to lower prices so that our citizens can afford to heat their homes this winter,” said Timmermans, who spoke to Silvia from CNBC. Amaro at an event in Bali, Indonesia, said.

He also stressed the importance of Member States being “in a position to address the issue of unexpected gains, if necessary”.

“So we will do everything we can to ensure that our energy markets operate and function in a way that addresses the issues we need to address.”

Timmermans was asked whether “doing everything” means that the EU agrees to impose limits on the price of gas and electricity in the short term.

“Well, nothing is off the table now,” he replied. “We’re all preparing for that, but we need to make sure what we’re doing doesn’t do more damage than it helps us address the problem.”

“So we have to be extremely careful. It has taken us 30 years to build the energy markets, so we have to make sure we tackle today’s problem without causing long-term problems.”

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Popular

More like this
Related