(U.S.) Shale Boom Is a Bust for Europe's Gas Plants
Comment of the Day

May 10 2013

Commentary by David Fuller

(U.S.) Shale Boom Is a Bust for Europe's Gas Plants

Here is the opening from this interesting article by Jan Hromadko for the WSJ (subscription required, PDF also provided)
FRANKFURT-The ripples of the North American shale boom continue to spread, as a growing number of European utilities are forced to mothball modern gas-fired power plants that can't compete with growing imports of cheap coal dislodged from the U.S.

Norwegian state energy company Statkraft said Wednesday it has idled a gas-fired power station in Germany that couldn't compete with its coal-fired rivals, while German utility E.ON EOAN.XE -0.27% SE said it is seriously considering mothballing more gas-fueled plants, including a state-of-the-art facility in Slovakia.

Other European utilities have taken similar action, presenting policy makers with a dilemma-cheaper coal-fired power could provide some relief for the region's struggling economies, but might be incompatible with long-term goals for carbon emissions and renewable energy.

The closures across Europe are another example of the far-reaching effects of the North American energy-supply boom. Surging supplies of natural gas in North America, unlocked from shale rock by a new combination of technology known as hydraulic fracturing, have prompted many U.S. power generators to switch away from coal, pushing increasing amounts of the fuel into Europe as cheap imports.

In 2012, U.S. exports of coal to Europe rose 23% to 66.4 million short tons, according to data from the U.S. Energy Information Administration.

David Fuller's view Those whom the gods wish to destroy they first make mad.' Europe's energy policies remain in a mess, as Fullermoney has pointed out on many occasions, and always to our considerable regret. They top the list of ill-advised economic policies which continue to blight Europe's GDP growth prospects. The ongoing cost is higher unemployment and damaged aspirations among generally well educated and cultivated societies.

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