Is Europe Giving Up on “Green” Energy?

Leaders of the 27 European Union countries met yesterday to discuss energy issues. The meeting, as described by AFP, represents a turning point in European energy policy. Europe’s leaders are ready to join the shale oil and gas revolution to avoid being left behind economically:

EU leaders agreed Wednesday to face up to the challenge posed by the shale oil and gas revolution which has slashed US energy prices, undercutting Europe’s competitive edge.

“All leaders are aware that sustainable and affordable energy is key to keeping factories and jobs in Europe,” European President Herman Van Rompuy said.

“Industry finds it hard to compete with foreign firms who pay half the price for electricity, like in the United States,” Van Rompuy said at the close of an EU summit focused on energy and tax evasion. …

The EU’s 27 heads of state and government met amid fears the US-led shale boom will reshape the global economy and leave Europe far behind.

Stuck in the doldrums, the European economy has lost nearly all momentum, with growth hard to come by and rising energy costs a real concern.

“We need to secure good value energy supplies … (which) involves making most use of indigenous resources, such as shale,” said British Prime Minister David Cameron. “We need to ensure that the old rules do not hold us back … regulation must not get in the way” of developing such resources, he added.

This graphic circulated widely at the EU meeting, and apparently persuaded many in attendance that it is time to forget about “green” energy:

Factory production is moving from Europe to the United States, in part as a result of America’s vastly cheaper electricity. Watts Up With That? compiled some reactions to the EU meeting. Some samples:

The portion of Wednesday’s EU summit that will be devoted to energy policy could be boiled down to a single, eye-popping chart that has been making the rounds in Brussels over the last week. It tracks electricity prices – excluding taxes – for industry in the EU, US and Japan. From a common point in 2005, three lines diverge widely to reflect the fact that prices in Europe are now 37 per cent higher than those in the US, and almost 20 per cent higher than those in Japan. That chart captures a growing fear in Europe that rising energy prices now pose a threat to the industrial competitiveness of a region mired in recession. It has been driven home by a steady stream of announcements from European manufacturers about plans to build new production facilities in the US. –Joshua Chaffin, Financial Times, 22 May 2013

Europe’s plan to decarbonise its economy by 2050 could be turned on its head at a summit today if EU heads of state and government sign off on measures prioritising industrial competitiveness over climate change in draft conclusions seen by EurActiv. One high-profile German MEP Holger Krahmer (ALDE), hailed the end of “climate hysteria” in a jubilant press statement. –EurActiv, 22 May 2013

The naive faith of policy makers that Europe’s main competitors would follow this shift from cheap fossil fuels to expensive green energy has gone up in smoke. In reality, most nations are completely unimpressed by Europe’s approach. Europe, the Washington Post recently warned, “has become a green-energy basket case. Instead of a model for the world to emulate, Europe has become a model of what not to do.” EU leaders are beginning to wake up to the enormity of the green energy fiasco. They will meet in Brussels for an energy summit on May 22 to discuss how to respond to the crisis. –Benny Peiser, Financial Post, 14 May 2013

Soaring German energy costs in the wake of the country’s transition to renewable energy have seen more and more firms thinking abut relocating their operations. German industry lobby associations on Wednesday sent a warning shot towards the government in Berlin, saying that rising energy costs in the country would drive away more and more German companies. –Deutsche Welle, 22 May 2013

It’s tempting to say we told you so, but…ah, what the heck: we told you so.