IEA: Their gap with U.S. energy prices is likely to hurt Europe for “at least 20 years”
posted at 8:51 pm on January 29, 2014 by Erika Johnsen
This is what President Obama had to say about natural gas and the shale revolution during his State of the Union address last night:
Now, one of the biggest factors in bringing more jobs back is our commitment to American energy. The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades.
One of the reasons why is natural gas – if extracted safely, it’s the bridge fuel that can power our economy with less of the carbon pollution that causes climate change. Businesses plan to invest almost $100 billion in new factories that use natural gas. I’ll cut red tape to help states get those factories built, and this Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas. My administration will keep working with the industry to sustain production and job growth while strengthening protection of our air, our water, and our communities. And while we’re at it, I’ll use my authority to protect more of our pristine federal lands for future generations.
…Which is fine, I suppose, except that it does seem rather mealy-mouthed for what should really be a gigantic, resounding thank-you/love letter to the shale revolution that has happened, hardly at all because of his administration’s policies, but very much in spite of them. Oil and gas are the only parts of his “all of the above” energy strategy that have gone above and beyond, and the Obama administration owes so many of what few economic gains they can boast about to the innovations in fracking technology that have swept the country in just a few years time: Economic and income growth, increased exports, job creation, our increasing attractiveness as a potential new home for energy-intensive industries — you name it.
If President Obama had really had his way with the “necessarily skyrocketing” energy prices he once so fervently hoped for, and, let’s face it, pretty much still does — i.e., by following many of the same policies the Europeans have been righteously adopting — we’d be stuck in the same comparatively uncompetitive, economically lethargic boat right now. Yikes, via the Financial Times:
In findings likely to inflame claims EU climate change policies are damaging the bloc’s manufacturers, the International Energy Agency said Europe will lose a third of its global market share of energy-intensive exports over the next two decades because energy prices will stay stubbornly higher than those in the US. …
Fatih Birol, the IEA’s chief economist, said environmental policies alone had not pushed up energy costs but the price gap between the EU and the US was going to last much longer than some expected. …
“Europe didn’t realise the seriousness of this competitive issue,” he said, warning the situation raises concern for the almost 30m people working in heavy industries such as iron, steel and petrochemicals across the continent.
European gas import prices are currently around three times higher than in the US while industrial electricity prices are about twice as high, creating an energy price gap Dr Birol said would last “at least 20 years”.