Crude Oil: Alarm – refineries closing, 40 at risk in Europe and 2 are in Italy

Employment problems due to costs and environmental impact

The Montecitorio Industrial Production Commission’s analysis

A European course is needed to maintain and develop the oil refinery sector with a crisis on hand that could end in 40 refineries closing in Europe, 2 of which are in Italy. Details, warnings and outlook were contained in the final document of the investigation conducted by the Montecitorio Industrial Production Commission.

The same commission is summarizing the crisis that the sector is facing: in 2009 in Europe there were 98 working oil refineries. In the current situation the picture has changed: refining capacity was reduced by 30%, 7 refineries were closed, another 13 changed ownership, 3 plants are for sale, even one of the major independent operators, Petroplus (with 5 refineries) went out of business. In Italy the capacity to refine oil has dropped 38% in the last 4 years.

 Data highlighted in the documentation from the Commission indicates that “the proposals to intervene to sustain the sector must take on a European profile. In the absence of timely, compelling and collective decisions, the European refineries would be exposed to a serious structural crisis with the closing of more than 40 plants in the next few years and an increase of dependency on foreign production even with a constant excess of supply”. The investigation helped identify an itinerary with 4 paths to overcome the crisis in the oil refinery sector, suggested moreover by Europia (an association that represents about 80% of the European refinery industry) during the deposition: 1) facilitate the restructuring or the lateral entry of production capacity; 2) subsidize investment in research and development to bring the refineries up to norm for quality control and protecting the environment; 3) approve action to simplify laws and procedures to clear the mining sites; 4) guarantee opportunity for equal competition from non EU countries.

 It is noteworthy that there is even an Italian proposal at a community level to introduce a green label for products refined in the EU, establishing that only those obtained with industrial processes that satisfy the same standards and have equal environmental sustainability coming from non EU countries can be used in EU member states.

 The conclusion of the investigation is clear: “only a concerted administration on a European level with a venture between the public and private sector can overcome the problems of the oil refinery sector, restructuring the system, improving the efficiency levels and the competitiveness of the Italian and European oil industry in international markets”. Concerning the causes of the crisis, the document points out “a judgment wholeheartedly shared,” or better said an increase in oil prices, the decrease of demand, current laws and finally, competition from outside the EU.

M.B.