Energy CEO slams Europe’s ‘insane’ reliance on natural gas

Energy CEO slams Europe’s ‘insane’ reliance on natural gas
Energy CEO slams Europe’s ‘insane’ reliance on natural gas

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

Jason Alden | Bloomberg | Getty Images

The CEO of Italian energy company Enel told CNBC on Friday that Europe’s dependence on natural gas was “insane” and argued that reduced dependence on fossil fuels was a better long-term option.

“I think we’ve finally figured out how addicted we are to gas, how insane this addiction is, and how we can fix this,” said Francesco Starace, speaking to CNBC’s Steve Sedgwick.

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

“I strongly disagree, because it’s a view that dates from, say, 15 years ago,” he said. “Was it wrong at the time? No, it wasn’t. Now that’s wrong.

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

Despite this optimism about the future, today’s reality on the ground is extremely difficult.

The current situation in Europe, where many countries are trying to wean themselves off Russian energy following the Kremlin’s invasion of Ukraine, illustrates the crucial role that fossil fuels still play in society.

As the colder months approached, European countries sought to boost gas storage in a bid to ensure security of supply.

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

“As far as storage goes, Europe… did the right thing,” he said, noting that most countries were “pretty full.”

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

“We have a point of view, and many studies show that with some sacrifice, [such as] two temperature notches less, and a little attention to gas consumption… Europe can get through the winter.”

“The question is when do we get to the source [of] 2023 with reserves totally depleted, really, and the gas still not flowing,” he said.

“Is Europe capable of restoring storage, with all the backup of floating regasifiers and power from other parts of the world? I think that is going to be the big challenge.”

Enel Group, whose main shareholder is Italy’s economy and finance ministry, said it would exit 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 hammered home the urgency of the situation facing European economies amid rising energy prices and concerns regarding supply.

“We need to do everything we can to deal with this energy crisis and make sure we do everything we can to bring prices down so our citizens can still afford to heat their homes this winter,” Timmermans said. , who spoke to CNBC’s Silvia. Amaro at an event in Bali, Indonesia, said.

He also underlined the importance for Member States to be “able to address the issue of windfall profits, if necessary”.

“So we’re going to try everything to make sure that our energy markets work, and that they work in a way that addresses the issues that we need to address.”

Timmermans was asked if “doing it all” meant that the EU agreed, in the short term, to impose caps on gas and electricity prices.

“Well, nothing’s on the table yet,” he replied. “We’re preparing for all of this, but we have to make sure that what we do doesn’t create more damage than it helps us solve the problem.”

“So we have to be extremely careful. It took us 30 years to build the energy markets, so we need to make sure we deal with today’s problem without creating long-term problems.”

. CEO energy denounces addiction senseless europe gas natural

. Energy CEO slams Europes insane reliance natural gas

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