Italians vote in referendum on duration of oil concessions

Italians were voting Sunday in a referendum on the duration of offshore drilling concessions in territorial waters, as nine regional governments sought to wrestle some influence over energy policy from the central government in Rome.

Premier Matteo Renzi has said he will abstain from voting, sending a signal that could kill the initiative, which requires a quorum of 50 percent plus one to make the balloting valid.

The battle began when Renzi’s government in December extended all existing 30-year concessions within 12 miles (some 20 kilometers) of shore until their resources were exhausted, while at the same time banning all future exploration and drilling in territorial waters.

Voters were being asked if they want to revoke the extension, opposed by nine regional governments concerned about safety and the environment and wanting a more articulated renewable energy policy.

Experts say the outcome of the referendum is unlikely to have any longer term impact on energy investments in Italy, as the question is very narrow and oil companies were counting only on the initial 30-year term.

“That is why argument that it would discourage investments is flawed,” said Matteo Di Castelnuovo, an economics professor at Milan’s Bocconi University. “It is not that we changed the rules of the game. The 30-year term remains.”

Nor will it impact Italy’s dependency on energy imports. Italy imports 90 percent of its gas and oil, and the amount of resources subject to the referendum was equal only to 3 percent of annual domestic demand for gas and 1 percent of annual demand for oil in 2015.

Andrea Bollino, a professor of energy economics at Rome’s LUISS University, said the real battle is over control of the country’s energy policy, which is largely in the hands of the national government with some renewable energy strategies decided by local entities. Local governments in the past have been successful in blocking some projects backed by Rome.

“This lack of coordination can reduce the efficiency of our general strategy,” Bollino said.