FT: Russia and shale can solve Europe’s energy problem

The aim of European energy policy should be to combine economic growth with environmental sustainability. However, we have ended up with energy costs that hamper growth – yet greenhouse gas emissions have not fallen despite the decline in energy consumption.

The problem is that we have, so far, failed to grasp the implications of the US shale revolution for Europe. Thanks to the rapid increase in efficient non-conventional gas production, US companies pay about $3.50 per million British thermal units (mBtu) for their natural gas. That is about a third of what Europeans pay.

Turning to electricity, not only are European consumers hit by relatively high gas feedstock prices, but they also have to pay an extra charge to cover the more than €30bn of incentives to invest in renewables which EU countries spend every year. As a result, Europe’s electricity is twice as expensive as America’s.  MORE