EU officials now fretting over Europe's conspicuously higher energy prices

For quite some time now, Europeans and various EU member countries have done plenty of self-congratulatory applauding of their own green-energy efforts, proudly lauding their many expensive renewable subsidy programs and quotas and their flailing cap-and-trade scheme and whatever else as an excellent example of what they were certain would prove to be the way of what must unquestionably, necessarily be a carbon-free future — except that, in Brussels over the past week, one simple chart has been making the rounds that is accelerating a possible group rethink of Europe’s fractured and lavish energy policies, via the Financial Times:

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From a common point in 2005, three lines diverge widely to reflect the fact that prices in Europe are now 37 per cent higher than those in the US, and almost 20 per cent higher than those in Japan.

That chart captures a growing fear in Europe that rising energy prices now pose a threat to the industrial competitiveness of a region mired in recession. It has been driven home by a steady stream of announcements from European manufacturers about plans to build new production facilities in the US.

While they’ve been hoping to rely on what I’m sure was the well-intentioned and yet very highly subsidized deployment of many pricey fledgling technologies not ready for prime time and their subsequent discouragements of price efficiency, Europe has been steadily resisting opening up their resources to the type of shale boom that has been rocking and rolling in the United States. Could be that Europe has less abundant resources and a different geological makeup, but you never know until you explore, and right now companies are looking to start high-tailing it over to the United States. Not wanting their own markets and competitiveness to get left in the dust, it sounds like more and more Europeans are tentatively ready to consider setting up the right regulatory environment to allow for their own:

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EU leaders agreed Wednesday to face up to the challenge posed by the shale oil and gas revolution which has slashed US energy prices, undercutting Europe’s competitive edge.

“All leaders are aware that sustainable and affordable energy is key to keeping factories and jobs in Europe,” European President Herman Van Rompuy said.

“Industry finds it hard to compete with foreign firms who pay half the price for electricity, like in the United States,” Van Rompuy said at the close of an EU summit focused on energy and tax evasion.

Britain, Hungary, Poland, Romania and Spain favour developing shale energy but others, and France in particular, are reluctant or opposed, citing environmental fears.

For the multiple European economies stuck in recession- and/or stagnation mode, voluntarily taking on higher energy costs — one of the most fundamental building blocks of cost of living that in turn has an effect on nearly everything else — by disallowing certain types of domestic energy production, in favor of subsidizing less efficient and affordable ones, is a terrible idea. No doubt many determinedly ‘green’ and and environmentalist Europeans will argue that it’s all worth for the sake of protecting future generations from a ravaged climate… and yet somehow, it’s the United States that has lately been pretty darn successful at bringing down carbon emissions without self-imposed vows of imagined renewable chastity.

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David Strom 3:20 PM | November 15, 2024
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