Europe Faces a Crisis in Energy Costs
Comment of the Day

April 18 2013

Commentary by David Fuller

Europe Faces a Crisis in Energy Costs

Here is the opening from this relevant summary by Stanley Reed for the NYT and IHT
LONDON - The signs are everywhere. Britain has been unable to reach a deal for its first new nuclear power station since the 1990s. Spain, once a clean-energy enthusiast, has slashed its backing for wind and solar power.

Even the European Union's flagship environmental achievement of recent years, its Emissions Trading System for carbon dioxide, is beset by existential doubts. On Tuesday, the European Parliament batted away an effort to bolster anemic carbon prices on the E.T.S.

Prices for permits to emit greenhouse gases, which have fallen as low as €3 per metric ton, are just a fraction of what they were a few years ago, meaning that they are no longer doing their intended job of inducing utilities and manufacturers to invest in new technology and switch to cleaner fuels.

Evidently, members of the European Parliament were more concerned about any further raising of energy costs that some European companies already say are putting them at a competitive disadvantage.

Europe is lurching through an energy crisis that in many respects parallels its seemingly unending economic crisis. Across Europe, consumer groups, governments and manufacturers are asking how their future energy needs can be met affordably and responsibly.

It is a question that is far more acute than in the United States, where the shale gas revolution has done wonders to ease energy angst. "Europeans are getting increasingly concerned about energy," said Corin Taylor, an analyst at the Institute of Directors, a British business group. "Manufacturers are looking at U.S. energy prices with envy, and if they can, they are making investments in North America."

European countries have yet to demonstrate that they can or in some cases even want to exploit their own potential shale gas troves. At the same time, most of Europe's indigenous sources of oil and natural gas are in decline, making increased dependence on imports almost inevitable.

David Fuller's view Most economic wounds are self-inflected, and this is certainly true of Europe, including the UK. So called green energy was popular with voters, at least in the planning stages, but unproven and economically irresponsible because it could not deliver reliable and competitive energy. Today, it is a massive and increasing drain on individual and governmental resources.

This is a sad situation, not least because shale gas is cheaper, abundant and cleaner than any other fossil fuel. Unfortunately, Europe is not yet developing its game changing shale reserves because many countries rushed ahead with inefficient windmills. These are increasingly unpopular, being towering eyesores and often noisy within two kilometres

Fullermoney often says: Governance Is Everything - not least economic governance which is sorely lacking in Europe. Consequently, this will remain a slow growth and often poorer region relative to many other parts of the world, for many years.

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