The newest twist to the global energy story is the surge in US gas output, bringing tectonic shifts in relative gas and electricity prices. IEA data showing that 30 million jobs are at risk in European energy intensive industries (e.g., aluminium, cement, iron and steel, pulp and paper) because they now pay so much more for energy than their competitors in the US. The FT predicts this will change the politics of climate change policy.
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“Natural gas prices have fallen sharply in the United States, largely because of the recent shale gas boom, and today are about one-third of import prices to Europe and one-fifth of those to Japan. Electricity price differentials are also large, with industrial consumers in Japan and Europe paying on average more than twice as much for electricity as their counterparts in the United States; even Chinese industrial consumers pay almost double the US level.”
“A number of EU countries have embraced green energy subsidies, shunned nuclear power and resisted the shale exploration that has fuelled a manufacturing renaissance in the US, prompting growing anger among industry leaders who say this has been a recipe for competitive ruin.”
So as the FT points out, the worry is that in Europe climate change policies will be the easy target and get most of the blame, making the politics of addressing global climate change even harder.