Energy Economics: Europe Pays Steap Price For Opposing Fracking
"Much of Europe opposes or even outright bans the process known as fracking, which releases natural gas from shale deposits. Analysts say the failure to develop a shale gas industry is hurting Europe's competitiveness and many companies are moving their operations to the United States," states NPR's Morning Edition host, David Green in the introduction to this radio report (listen here). "This influx of business may be good for the U.S., but it's cause for concern for European leaders."
NPR's foreign affairs correspondent, Jackie Northam traveled to Louisiana to tour a new chemical plant that is "part of an expansion by the German chemical giant BASF." Northam explains that what's driving this expansion, as well as other construction throughout Louisiana and other parts of the U.S. since 2009 "is an abundance of cheap natural gas. ...That's when the shale gas industry took off, thanks, in large part, to hydraulic fracturing or fracking."
A BASF executive at the site tells Northam that their $6 billion investment in 100 production sites across the U.S. since 2009 has "made us globally more competitive from a manufacturing chemical standpoint."
Northam speaks next with "John Larson, a vice president with IHS, a global energy research company, (who) says one of their recent studies found an estimated $100 billion will be pumped into the U.S. economy by 2020 as a result of the low energy prices.
"I would characterize it as a slow deinvestment (sic) in Europe as companies overseas look to seize this opportunity and shift more of their investment dollars to U.S. markets. And, in fact, in Germany, for example, over the past six years, there's been a de-investment of about 52 billion euros," he states.
While NPR didn't discuss the environment in this report, we will as "high energy costs and declining economic competiveness" was the topic of a recent post on Europe. We noted that both factors contributed to "Europe Loosening Their Climate Commitments", thus increasing their carbon emissions. A high environmental price to pay on top of the economic ones for opposing advanced energy extraction technology.
Notwithstanding the economic (or climate target) consequences, "European leaders will face a hard time selling it to a public which widely opposes fracking," states Larson to end the report.
For a well-reasoned arguement to the contrary, read Daniel Gros, Director of the Centre for European Policy Studies, inEuropeanVoice.