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The Regional Administrative Court rejects the PiTESAI. New perspectives for the oil & gas sector

On 12 February 2024, with judgments no. 2858 and no. 2872, the Regional Administrative Court (Court of first instance – “TAR”) of Rome annulled the Plan for the Sustainable Energy Transition of Eligible Areas (“PiTESAI“), approved by Decree no. 548, of the then Ministry of Ecological Transition. The PiTESAI had defined the areas “suitable” to carry out hydrocarbon prospecting, exploration and production activities within the national territory, considerably reducing the exploitation of national hydrocarbon deposits.

The TAR upheld the appeals brought by Gas Plus and Padana Energia, with the ad hoc intervention of Rockhopper Civita Limited, finding various preliminary and motivational deficiencies in the procedure regarding the drafting and approval of the Plan, which vitiated its lawfulness.

According to the TAR, during the Strategic Environmental Assessment phase, the Ministry had violated participatory guarantees by failing to consider the contributions offered by the associations representing mining companies, such as Assorisorse, in their public affairs.

The TAR also pointed out that the final version of the PiTESAI did not contain a complete graphic representation of the areas and this was an irremediable deficiency.

The TAR also censured the manner in which the Ministry had identified the areas “suitable” to conduct mining activities. Instead of carrying out a prior site-specific assessment of the individual situations, as prescribed by Law Decree No. 135/2018 (converted into Law No. 12/2019), the Ministry had carried out a residual type of identification, applying a series of “exclusionary factors”, pre-established in a general, abstract and transversal manner to the territory affected by the PiTESAI. In this way, according to the TAR, the abstract nature of the constraints unlawfully affected existing mining titles, resulting in extremely extensive and rigid prohibitions.

The B.II.3 cases of the PiTESAI were also criticised for subjecting the extension of productive and/or unproductive licences granted for less than five years and falling into “unsuitable areas”, to the prior passing of a “complex and random” cost/benefit analysis. According to the TAR, this modality, based on factors not established by the law, nor identified by an administrative decision, had introduced considerable rigidity.

The B.II.1 cases of the Plan were censured as they excluded the possibility of extending the duration of concessions in potentially suitable areas that had been unproductive for more than seven years, given that the threshold of unproductiveness (as well as the five-year threshold for concessions in unsuitable areas) was such as to also include periods in which halting production had been expressly authorised by the competent public authorities.

The government, i.e., the Ministry of the Environment and Energy Security, will be able to appeal against the TAR’s judgments in the Court of second instance (the Council of State). Alternatively (or in addition), it is possible – indeed, desirable – that the same starts working on the rationalisation of rules that have been stratified by decades of opposing drives and governments of different “colours”.

As things stand, the cancellation of the PiTESAI entails a return to the status quo ante. It is not to be excluded that there may also be a revival, where possible, of licenses that have already expired or are about to expire. It also remains to be seen what impact the judgments will have on certain regulations related to the PiTESAI, such as the Gas Release provided for in the recent Energy Decree, where, among other things, the holders of existing licenses whose natural gas production facilities are located in whole or in part in areas considered suitable under the PiTESAI are eligible to participate in the procedures carried out by the GSE  (Gestore dei Servizi Energetici GSE S.p.A.) for long-term supply.