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C O N F I D E N T I A L SECTION 01 OF 03 ROME 001184 
 
SIPDIS 
 
EEB FOR SPECIAL ENVOY GRAY 
EEB FOR DAS HENGEL 
EEB FOR DAS BRYZA 
STATE PASS TO DOE DAS DENNIS MIOTLA 
 
E.O. 12958: DECL: 09/22/2018 
TAGS: ENIV ENRG ETRD ETTC KNNP
SUBJECT: SCENESETTER FOR DOE DEPUTY ASSISTANT SECRETARY FOR 
NUCLEAR POWER DEPLOYMENT DENNIS MIOTLA TRAVEL TO ROME, 
ITALY, SEPTEMBER 24 - 26, 2008 
 
REF: A. 07 ROME 2438 B. ROME 451 
 
Classified By: ECMIN THOMAS DELARE FOR REASONS 1.4(b) and (d) 
 
 Political Backdrop 
------------------ 
 
¶1.  (C/NF)  The new Berlusconi government took office after 
winning a snap election in April 2008.  Although it has a 
strong electoral mandate, the government needs to take 
decisive steps to revitalize the economy and reduce budget 
deficits. Over his first hundred days in office, Berlusconi 
delivered concrete results on election promises.  His 
coalition's solid majorities in both chambers of parliament 
allowed the swift adoption of wide-ranging laws on domestic 
security and the budget.  Berlusconi intends to pass 
significant judicial reforms and devolve more fiscal powers 
to the regions between now and the end of the year. 
Politicians of all stripes agree that deep institutional 
reform is essential.  But initial hopes of cross-aisle 
cooperation have faded, as the weakened opposition has 
signaled its intent to protest budget cuts and changes to the 
dysfunctional and deeply politicized judicial system. 
 
Italian Nuclear Energy Power Background 
--------------------------------------- 
 
¶2. (SBU) Your visit to Rome to speak at the Italian Chamber 
of Deputies Seminar on security standards for nuclear energy 
comes at an opportune time as the Berlusconi government 
continues to inform us and the public that it intends to 
revive the Italian nuclear energy sector. Minister for 
Economic Development Claudio Scajola announced on May 22, 
2008 that the GOI would develop a plan with the objective of 
beginning construction of new generation nuclear power plants 
by the end of the current legislature (2013). The high cost 
of fossil fuels and a desire for greater energy security 
appear to be the motives behind this return to nuclear power. 
Solid majorities in both chambers of parliament should 
facilitate the passage of the required legislation to address 
the issues of nuclear waste and construction sites, but these 
are likely to remain thorny problems for the GOI. 
 
¶3. (U) Twenty years ago Italy had a nuclear power sector with 
four functioning nuclear power plants and a reprocessing 
plant.  It was the world's fourth largest consumer of 
nuclear-produced electricity.  After the Chernobyl accident, 
however, a series of three referenda in 1987 had the 
practical effect of banning nuclear power generation in 
Italy. A subsequent 1988 national energy plan called for the 
closing of existing nuclear plants and no building of new 
ones.  The nuclear power plants were thus decommissioned. 
Today Italy imports around 15 percent of its electricity 
needs, mostly from France, at an estimated cost of about 90 
billion dollars per year. 
 
¶4. (U)  Italy has, nevertheless, maintained some nuclear 
power capabilities.  Parastatal electricity company ENEL 
operates a nuclear power plant in Slovenia, and in 2007 ENEL 
reached an agreement with Electricite de France for 
investment in up to six new nuclear reactors in France. 
Italian firm Ansaldo Nucleare has also retained nuclear power 
plant design, analysis and research capabilities. It is 
building an nuclear power plant in Romania, and cooperates on 
research with U.S.-based Westinghouse on the IRIS system. 
Ansaldo Nucleare also participates in research through 
EURATOM on generation IV system lead-cooled fast reactors. 
Italy is also covered by Section 123 Agreement as a member of 
the European Union, and it joined GNEP in 2007 (ref A). 
 
Italian Energy and Energy Security Policy 
----------------------------------------- 
 
¶5.  (U) Since 2005, the GOI has sought to increase the use of 
natural gas to meet Italy's winter heating needs.  This 
 
ROME 00001184  002 OF 003 
 
 
policy was driven by the desire to minimize exposure to high 
oil prices and to lower Italian carbon dioxide emissions in 
order to comply with Italy's Kyoto Protocol obligations. 
According to Eni, the Italian oil and gas parastatal 30% 
owned by the Italian government, Italy was the world's 
seventh-largest consumer of natural gas in 2005.  In 2005, 
Italy consumed 84.27 bcm of natural gas.  Of this, 23.33 bcm 
(27%) came from Russia.  The use of natural gas for power 
generation has also increased.  In 2005, of 303,699 GWh of 
electricity generated by Italian power plants, 149,262 GWh 
(49%) was generated using natural gas.  Italy's remaining 
electricity was generated using coal (49,419 GWh, 16% of 
total), oil (47,124 GWh, 16%), and hydro (42,927 GWh, 14%), 
with the remaining 5% coming from waste, biomass, geothermal, 
wind, and other sources. 
 
¶6.  (U) Italian energy security policy has been focused on 
increasing Italian access to existing natural gas sources by 
constructing new natural gas pipelines. The GOI is developing 
a new national energy plan (expected in the Spring 2009) 
which will likely include the return to nuclear energy power 
as an additional goal. 
 
¶7. (C) After natural gas shortages in January 2006, caused by 
Gazprom's decision to cut off gas exports via pipelines 
transiting Ukraine, the GOI has supported construction of 
pipelines linking Italy to natural gas fields in Russia, 
Algeria, and the Caspian Basin.  Ministry of Foreign Affairs 
officials have said the GOI will support "any project that 
will bring natural gas to Italy."  Most recently, GOI efforts 
helped ensure EU approval of the Turkey-Greece-Italy (TGI) 
pipeline, which will connect Italian gas consumers to natural 
gas fields in Azerbaijan.  The GOI also supports the South 
Stream pipeline, proposed by Gazprom and Eni, which will 
connect Russia directly to Bulgaria and European markets via 
a pipeline running under the Black Sea.  Eni's close 
cooperation with Russia's Gasprom is controversial; many 
believe that Eni is helping Russia strengthen its 
stranglehold on EU energy supplies. Ref B reports on the 
Eni-Gazprom relationship and its implications for Italian 
energy security.  While the GOI has offered rhetorical 
support for the construction of LNG re-gasification 
facilities, it has not intervened forcefully to help gas 
companies, including ExxonMobil and British Gas, overcome 
opposition at the regional and city/town levels. After many 
years and delays, a new LNG re-gasification plant by 
ExxonMobil and Edison is scheduled to start operations in 
early 2009. 
 
Background on Meetings 
---------------------- 
 
¶8.  (SBU) Your meeting at the Ministry of Economic 
Development will present an excellent opportunity to inquire 
about the GOI's plans for a return to nuclear energy. This 
Ministry has the energy portfolio and will play a leading 
role in Italy's nuclear energy future. You are scheduled to 
meet with Ambassador Mancini and Professor Sergio Garribba. 
Mancini is a senior Italian diplomat whose role is to advise 
Minister Scajola on policy matters.  Garribba is one of 
Italy's foremost experts on energy and also serves as an 
advisor to the Minister on the technical side of energy 
matters. He previously held the post of Commissioner with the 
Italian Energy Authority and prior as Director General for 
the Ministry's Energy Directorate.  Garribba has significant 
international experience, having worked at various 
international bodies and was a candidate in the 1990s to 
chair the IEA (Note: the U.S. did not support Garribba's 
candidacy; while he has continued to be a close Embassy 
contact, we think he may still resent our decision not to 
support him for the IEA chair. End note). 
 
¶9.  (SBU) Your meeting with ENEL should serve to understand 
better what role that company will play in Italy's plans for 
nuclear energy.  As Italy's electricity parastatal 
 
ROME 00001184  003 OF 003 
 
 
(approximately 30 percent GOI owned), ENEL is Italy's largest 
electricity company with approximately 50 percent of the 
domestic market.  It is conceivable that the GOI may give 
ENEL a significant operational role (prime contractor) in a 
future nuclear energy sector.  As previously  noted, ENEL has 
already invested in nuclear energy generation abroad, 
particularly in France, and has acquired Russian nuclear 
technology through the purchase of a power plant in Slovakia. 
 
¶10. (U) A courtesy call to the Honorable Andrea Gibelli, has 
also been scheduled.  Gibelli is the Chairman of the Chamber 
of Deputies for the Productive Activities Committed, and the 
host of the VAST Seminar in which you will speak.  Gibelli's 
Committee will play a key role in the passing of the energy 
related legislature needed for the return to nuclear energy 
power. 
 
¶11. (C) You should also be aware that Ambassador Spogli has 
made energy security one of the top priorities of this 
Embassy.  We are working now to intensify our dialogue with 
the Italian government on a broad range of energy issues, 
including energy diversification, EU market reform, and 
increased use of renewable energy sources.  It would be very 
helpful to us if you could focus your public comments to the 
press on the urgent need for Italy and the EU to diversify 
their energy supply and take other steps to enhance their 
energy security, noting that a return to nuclear power could 
be one element of such an effort. 
SPOGLI