American energy gains means European manufacturing loss
European industry flocks to cheap U.S. gas
By Michael Birnbaum, WashPost, Updated: Monday, April 1, 2:42 PM
LUDWIGSHAFEN, Germany — This sprawling chemical plant along the Rhine River has been a jewel of Germany’s powerful manufacturing economy for more than a century. But a widening chasm between energy prices in Europe and the United States has European industry scrambling to make emigration plans.
A natural gas boom in the United States has sent manufacturing costs plummeting, and European companies are setting sail across the Atlantic to stay competitive. U.S. natural gas prices have fallen to a quarter of those in Europe, a gap that has swiftly widened in the past three years as shale gas has taken off. Many companies expect a long-term realignment.
The shift toward investment in the United States is another testament to the far-reaching effects of newly unlocked American energy reserves, made possible by new applications of technology that have lagged in Europe. Energy-intensive industries such as steel and chemicals are particularly affected, because they use natural gas as a raw material and a power source. But many analysts say those industries are simply the vanguard of a broader shift, because the boom has given an advantage to all U.S.-based manufacturing through lower electricity prices.
As billions of dollars pour into the United States, the outflow from Europe is costing jobs and weighing on decisions there about ambitious and expensive green-friendly policies.
(More here.)
LUDWIGSHAFEN, Germany — This sprawling chemical plant along the Rhine River has been a jewel of Germany’s powerful manufacturing economy for more than a century. But a widening chasm between energy prices in Europe and the United States has European industry scrambling to make emigration plans.
A natural gas boom in the United States has sent manufacturing costs plummeting, and European companies are setting sail across the Atlantic to stay competitive. U.S. natural gas prices have fallen to a quarter of those in Europe, a gap that has swiftly widened in the past three years as shale gas has taken off. Many companies expect a long-term realignment.
The shift toward investment in the United States is another testament to the far-reaching effects of newly unlocked American energy reserves, made possible by new applications of technology that have lagged in Europe. Energy-intensive industries such as steel and chemicals are particularly affected, because they use natural gas as a raw material and a power source. But many analysts say those industries are simply the vanguard of a broader shift, because the boom has given an advantage to all U.S.-based manufacturing through lower electricity prices.
As billions of dollars pour into the United States, the outflow from Europe is costing jobs and weighing on decisions there about ambitious and expensive green-friendly policies.
(More here.)
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