The CEO of Germany’s largest utilty, E.ON, has some stark warnings for European policymakers regarding the continent’s energy policy. While American industry enjoys outrageously cheap natural gas (thank you, shale), energy prices in Europe are rising. In today’s globalized world, businesses are willing and able to pick up and move across the Atlantic to take advantage of the shale boom, and that has many in Europe worried. The FT reports:
“There is a competitive advantage for America that we cannot prevent, at least for some time,” [Johannes Teyssen, chief executive of Eon] told the Financial Times. He said it was “a dream” for politicians to suggest otherwise. “It will take years and long years of innovation before we can start to shrink it,” he added….
“The price difference is unnerving some companies and deciding their investments,” Mr Teyssen said, adding that the US advantage was “getting so big we cannot allow it to continue”.
You reap what you sow. Europe’s stubborn refusal to back fracking and its decision to subsidize expensive green technologies have had real, quantifiable costs. Rising electricity prices don’t just hurt businesses; they hamper households struggling to recover from the financial crisis. Putting ideals before economic sense rarely solves problems.