Some of Germany’s largest industrial companies are professing alarm at the impact of cheap US natural shale gas on the European economy.
In particular the leaders of German companies say Europe is struggling to compete with the US as a manufacturing centre.
The Financial Times reports that the energy cost advantage for US companies is rising and is expected to persist until at least 2020, according to the BDI, the German industry lobby group.
Some executives (most vocally from BASF and Bayer) fear a growing divide between European and US energy costs could see energy-intensive manufacturers divert investments that might have gone into Europe to the US instead.
BASF executive board member Harald Schwager, said: “We Europeans are currently paying up to four or five times more for natural gas than the Americans…Of course that means increased competition for all the European manufacturing sites.”
German industry is suffering under the effects of expensive energy prices while Chancellor Merkel’s phasing out of nuclear has also impacted.
In a report to be published in coming days, the BDI forecast US natural gas prices would remain at 16 euros per megawatt hour (MWh) until 2020 — some 40 per cent less than the last peak, around 25 euros in 2008. In contrast, German gas prices will rise from 48 euros per MWh to 61 euros, an increase of 27 percent by the end of the decade.
“Europe’s politicians should be careful not to make already pricy energy even pricier by levying new taxes or surcharges,” Mr. Schwager said in reference to the German renewable-energy surcharge from which big industry is excluded for now.
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