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Page added on October 15, 2012
Ugo Bardi: Italy implodes
In a post that I published in 2008, I wondered whether Italy could survive as an industrialized country with oil over $ 100 per barrel. Four years later, we have seen oil prices going through a cycle of collapse and return to high levels. Italy showed signs of recovery during the low price phase, in 2009, but the last two years with oil at over $ 100 per barrel seem to have hit hard the Italian economic system.
In a post written on the blog “Mondo Elettrico“, (in Italian) Massimo de Carlo summarizes the most recent data on fossil fuel consumption in Italy. Let me report a translated summary of the text of a press release of the Italian “Unione Petrolifera” reported in De Carlo’s blog:
Automotive fuels have shown the following trends: gasoline has seen a reduction of 18.2% in consumption while diesel fuel has seen a 15.6% reduction, both with respect to September 2011. Summed together, the loss of the two fuels has been of -16.3% with respect to Sept 2011. In this month, the sales of new cars have shown a contraction of 25.5% with respect to Sep 2011. The first nine months of 2012 have seen a contraction of 20,4% in the sales of new cars.
I don’t know if you like to define that “decline” or, simply, “collapse”. Surely, something bad is going on with Italy and the measures that the government is taking against financial collapse look more and more like the attempt of curing a cough by strangling the patient. Anyway, you can Google-translate De Carlo’s post and give a look to more data (to read the figures, note that in Italian benzina stands for gasoline and gasolio for diesel fuel).
Perhaps you also wonder how it feels being in Italy in this period: given the situation, you’d expect to see people going around in ox-driven carts. But I see nothing of that sort in the place where I live, Florence and vicinity. Traffic is normal everywhere, even with the usual traffic jams at rush hours. Perhaps, poorer areas of the country, e.g. in the South, have been hit much harder, but there don’t seem to exist reports in the media on this matter.
But there is a curious sensation around. You know, it is like one of those disaster movies; those where you know that the tsunami will arrive, or the dam will burst, or the volcano will erupt right under Los Angeles. Before the catastrophe, you see people worried about their everyday things; oblivious of the impending disaster. And yet, there are ominous signs all over that “something” is going to happen.
In downtown Florence, plenty of shops seem to be either closed or in the verge of closing.
8 Comments on "Ugo Bardi: Italy implodes"
Arthur on Mon, 15th Oct 2012 1:23 pm
Car driving is collapsing, not necessarily Italy itself. Fuel prices are more than twice as high in Italy as in the US and that’s too much for many people. They simply abandon their cars and buy and iPad instead. 😉
“In downtown Florence, plenty of shops seem to be either closed or in the verge of closing.”
Mr Bardi is missing an important development here, sales is increasingly happening via the internet, the economic platform of the future. Same here in Holland. That’s where the iPad comes in. 😉
I would call it ‘restructuring’ rather than ‘collapse’ of the economy. Strangely enough there seems to be enough money for solar panels and introdution of the smart grid (30 million homes), the most advanced in the world by far. Does not sound like collapse to me. The ‘problem’ is the same as in Greece: people have enough money (Italians far more than Greeks) but they refuse to pay taxes, so the state comes into financial trouble, now that these governments cannot print money anymore.
BillT on Mon, 15th Oct 2012 2:31 pm
A fuel consumption drop of 15% to 18% sounds like more than internet shopping. After all, all the stuff being bought has to be delivered. The I-pad is just a fad that soon will be too expensive for the average worker to afford. Especially after the collapse of the Euro and the breaking up of the EU.
deedl on Mon, 15th Oct 2012 2:56 pm
Everything is great in Italy, people are cutting fuel costs and increase their use of bikes and public transport. It’s good for the italian economy, because large parts of the Italien trade deficit were due to fuel imports. So this is a sign of economic recovery instead of collapse. Italy did live above its financial abilities for many years, they are now adapting their fuel consumption. I guess thats nothing to worry about. Every euro spend on something else than fuel is a euro that most likely stays in Italy and helps to recover economocally.
Arthur on Mon, 15th Oct 2012 3:58 pm
Bill, I was talking about the empty retail shops, not reduction of fuel consumption.
http://www.gfkrt.com/news_events/market_news/single_sites/009958/index.en.html
16% of classical retail turnover now has moved to the internet in Europe and increasing dramatically. Shops are being used for inspecting products and ordered over the internet. I assume it is something similar in the US. Italy is not ‘imploding’, but instead moving on.
DC on Mon, 15th Oct 2012 7:11 pm
Italy may be somewhat better poised to whether the decrease in car-activity he is describing, but this is not the case in most other countries. Those that have made the gas-burning mobile garbage bin the center-piece of their ‘economies’ would not fare to well with 20% reductions in fuel use.
Yea, im looking at you North America. Notice how quickly for example, the ~ 10% or so reduction in amerikas fuel useage since 2007-8 was jumped on as being due to ‘efficient’ cars (whatever those are), and not to its real cause, the tanking drive-shop-consume. ‘economy’.
If I may so, Ijunks cannot and will-not offer any kind of substitutability for actual economic activity in any event. Lots of people in N.A. order stuff on the ‘net’, even I do from time to time. But un-employment and stagnant incomes are the new ‘normal’, even if people here cant or wont admit to it. I would go further and say the ratio of people buying ‘stuff’ on the net could rise to any % it wishes, 50, 75…100% even, it wouldn’t really change the underlying fact that were not going to be able to ‘shop’ our way out of our problems this time around.
John Baldwin on Mon, 15th Oct 2012 7:57 pm
But natural gas for vehicles is showing huge growth because it is much cheaper than diesel/petrol, lower CO2, better for air quality. All vehicles should be CNG by 2020
Arthur on Tue, 16th Oct 2012 9:16 am
“All vehicles should be CNG by 2020”
Sure, and postpone the inevitable crash with another decade or so.
Why not use the remaining carbon capital we have for setting up something more sustainable? Why not have national programs that requires every village/small town to have it’s own multimegawatt wind turbine, at a onetime cost (tax) of 1000$/euro per person?
Kenz300 on Tue, 16th Oct 2012 6:54 pm
We need more safe, walking and bicycle paths that connect work, schools and homes. We need better mass transit. Not that long ago children walked and bicycled to school instead of being driven by their parents. There once were trolleys running in every major city for cheap, easy and convenient transportation. Too bad Republicans in Congress hate bicycle paths and mass transit. Might have something to do with their funding from oil companies.