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Can The TAP Pipeline Survive The Italian Referendum Results?

Pipeline

On December 4, a referendum in Italy rejected the sweeping constitutional reforms proposed by the government, ultimately resulting in the resignation of Matteo Renzi from the prime minister’s post. One of the main proposed constitutional changes was the division of competences between the state and the regions on defining which governing body will retain the legislative power on “land-use planning” and “transport and distribution of energy.” According to Article 117 of Italy’s constitution, legislative authority on these specific issues is vested with the regions. Thus, the state was seeking to gain an exclusive legislative power on the issue of “production, transport and distribution of energy,” and therefore, on the question of launching the construction of the Trans-Adriatic Pipeline’s (TAP) in Italy. By 2020, TAP is expected to bring 10 bcm of natural gas from Azerbaijan to the coast of Italy, near the city of Melendugno in the Puglia region, via Greece, Albania and the Adriatic Sea.

The TAP Consortium has awarded Italian companies a contract for engineering and construction work for the onshore/offshore sections of the pipeline in Italy and for the pipeline-receiving terminal to connect TAP to the Italian Snam-Rete-Gas’s pipeline network. The construction of the pipeline in Greece and Albania had been already launched (EDM, June 16). The process was going smoothly, until TAP faced strong defiance from the local authorities of Italy’s Puglia region on the basis of environmental concerns. The opposition to the project came despite the fact that the Italian minister of environment had already signed the necessary decree of environmental compatibility of the project—following an extensive environmental impact study—and Italy’s ministry of economy had granted the single authorisation permit for the pipeline in 2015 (Tap-ag.com). However, under Italy’s constitution, the regional governments have a veto power over land use and prospective energy infrastructure. The national government under Matteo Renzi has strongly supported TAP. However, Michele Emiliano, the governor of Puglia, voiced opposition to the planned pipeline path along Melendugno, by accusing the government of implementing the project without the region’s consent. Emiliano demanded moving the construction to Puglia’s port city of Brindisi, where there is an available connection to the Snam’s national gas grid.

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Protests against TAP also were actively conducted by some human rights and environmental NGOs, notably the two NGOs Counter Balance (Belgium) and CEE Bank-Watch (Czech Republic). Both organizations incorporate a large network of human rights and environmental NGOs in Europe. The track-record of both NGOs demonstrates how they have been promoting a vehement anti-TAP campaign on the grounds of potential environmental damage caused by TAP in Italy, Greece and Albania. They aimed at hampering the prospect of securing financing for the Southern Gas Corridor from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) (Counter-Balance.Org, September 22, 2015; January 28).

In 2014, former Secretary General of NATO Anders Fogh Rasmussen articulated the role of certain environmental NGOs behind anti-shale gas campaign in Europe. Several of them are partners of the CEE Bank-Watch (Pri.org and Natural Gas World, June 20, 2014). The anti-TAP campaign was further promoted by the protests of local authorities in Puglia and by the anti-TAP rhetoric of the ‘Five-Star Movement, a Euro-sceptic political party in Italy (Bankwatch.org, February 17, 2015; Viniciopeluffo.it, December 6, 2013). The anti-TAP campaign is conducted in a coordinated manner, implying potential third party’s involvement, a party that is evidently not enthusiastic to see the Southern Gas Corridor being successfully implemented.

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Despite protests, “TAP continues to make progress in its construction across the three host countries, according to plan,” confirmed by TAP Consortium’s media advisor Luigi Quaranta. As Puglia’s local authorities were concerned with the preservation of the local olive trees, the TAP Consortium obtained a permit to move 231 olive trees in order to save them. The digging of the micro-tunnel for onshore/offshore installation started in January 2016 and will end in the fall of 2017. The underground micro-tunnel will not pose environmental risk to the Adriatic Sea, the Melendugno beach and the fishing areas. Italy’s Snam’s CEO, Marco Alvera, whose company holds a 20 percent share in the project, had told Il Sole 24 Ore newspaper that “the company was not concerned about its investments” due to the referendum in Italy (Italy24, November 24; Natural Gas World, December 1).

If Italy fails to come up with a solution for TAP, the Italian segment of the pipeline might be replaced with the planned Ionian Adriatic Pipeline (IAP) towards the Western Balkans. In August 2016, Azerbaijan’s SOCAR signed a memorandum of understanding (MoU) with Croatia, Albania, Bosnia and Herzegovina and Montenegro for the construction of IAP through these countries. This followed on the 2007 Declaration of Intent signed by Croatia, Montenegro and Albania to connect IAP and TAP in Albania’s territories. A fall-through on the project to build TAP would deprive Italy of the opportunity to become an energy hub and cause a tremendous loss of investment in the country’s local infrastructure (Azertag.az, August 27; Ilsole24ore.com, September 14; EDM, October 19). Meanwhile, Macedonia’s state-owned company, Macedonian Energy Resources (MER), has requested to join the TAP project. The request followed shortly after MER signed a MoU with Greece’s DESFA (the country’s gas transmission system operator) in mid-October to construct a pipeline between the two countries, which will enable Macedonia to connect its gas network with TAP (Intellinews.com, November 6).

The failure of TAP in Italy will pave the way for the construction of the Poseidon pipeline, a proposed offshore leg of the Interconnector Turkey-Greece-Italy (ITGI) pipeline under the Ionian Sea, which was previously designed to transport Azerbaijani gas. In February 2016, Russia’s Gazprom, Italian Edison and Greece’s DEPA signed a MoU to carry Russian gas across the Black Sea [via the prospective Turkish Stream pipeline from Russia to Turkey] and then through Greece to Italy by using the ITGI/Poseidon (EDM, August 2). However, the Poseidon pipeline may face almost identical obstacles from the local authorities in Italy. The Melendugno city council reportedly stopped a Russian conglomerate, which wanted to buy the land, where the TAP pipeline was supposed to be laid; otherwise TAP’s construction would have faced yet another new challenge (Thedailybeast.com, October 12)

By Ilgar Gurbanov via Jamestown

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