It is inevitable that investment and jobs – and especially in energy intensive industries – will migrate to regions of low energy costs. Over the next few years the lead that the US has developed over the rest of the world in the exploitation of shale gas will cause European companies to shun the high energy costs at home and shift to the US.
Reuters: Austria’s group Voestalpine is considering a plan to build a $1 billion plant in the United States that would convert iron ore into concentrate used in steelmaking, Trend magazine reported. ………. Trend said the plant was envisioned for a coastal city in the southern United States, given cheap and reliable supplies of natural gas, political stability and efficient port infrastructure.
And the problem has been the unnecessary and misguided European obsession with chasing a mirage. A meaningless and unjustified pursuit of “low carbon” energy; profligate subsidies for ineffective renewable energy; wasteful – and eventually corrupt – attempts to bias the market with carbon credits and the shutting down of perfectly viable coal and nuclear power plants has given the highest energy costs in the world. Gas prices in Europe are 4 or 5 times as high as in the US. Europe has plenty of shale gas potential but development is lagging far behind the US largely because of the political opposition from the “Green” lobbies. As the New York Times reports:
High Energy Costs Plaguing Europe
.. Asked whether he had considered building the plant in Europe, Voestalpine’s chief executive, Wolfgang Eder, said that that “calculation does not make sense from the very beginning.” Gas in Europe is much more expensive, he said.
High energy costs are emerging as an issue in Europe that is prompting debate, including questioning of the Continent’s clean energy initiatives. Over the past few years, Europe has spent tens of billions of euros in an effort to reduce carbon dioxide emissions. The bulk of the spending has gone into low-carbon energy sources like wind and solar power that have needed special tariffs or other subsidies to be commercially viable.
“We embarked on a big transition to a low-carbon economy without taking into account the cost and without factoring in the competitive impact,” says Fabien Roques, head of European power and carbon at the energy consulting firm IHS CERA in Paris. “I think there will be a critical review of some of these policies in the next few years.”
Both consumers and the industry are upset about high energy costs. Energy-intensive industries like chemicals and steel are, if not closing European plants outright, looking toward places like the United States that have lower energy costs as they pursue new investments.
BASF, the German chemical giant, has been outspoken about the consequences of energy costs for competitiveness and is building a new plant in Louisiana.
“We Europeans are currently paying up to four or five times more for natural gas than the Americans,” Harald Schwager, a member of the executive board at BASF, said last month. “Energy efficiency alone will not allow us to compensate for this. Of course, that means increased competition for all the European manufacturing sites.”
And it beomes increasingly clear that the chase for politically correct “brownie points” by European governments as they have demonised carbon dioxide quite needlessly while spending massively on renewable subsidies is not sustainable. Just as Japan must now waste political energy in “reviewing” their hasty decisions about the use of nuclear energy after Fukushima , Europe will have to spend the next decade in “reviewing and reversing” the spate of bad decisions made based on climate alarmism.
The expansion in renewables will probably ensure that Europe will meet its target of reducing greenhouse gases 20 percent from their 1990 levels by 2020. But it has been a disappointment on other levels. For one thing, emissions continue to rise globally. In a sense, Europe is likely to have exported its emissions to places like China, where polluting economic activity continues to increase while the European economy stagnates.
A striking indicator that the European effort has not achieved all that it intended to is the continued rise in the burning of coal, by far the biggest polluter among fossil fuels.
The International Energy Agency, a Paris-based group formed by consumer nations, recently said that coal was likely to catch up with oil as the world’s largest source of energy in a decade.
Much of the increase in coal use can be blamed on China and India, but not all of it. Europe has increased its coal use this year, and that has led to an increase of about 7 percent in carbon dioxide emissions from power generation, according to IHS. Coal use is increasing in all regions except the United States, the I.E.A. said.
The k2p blog 