Monday, 21 May 2012

The European Union is a slow motion Titanic

Peter Glover aptly describes the European Union as a slow motion Titanic. The self-inflicted Eurozone crisis together with the also self-inflicted "green" economy bubble is an unbeatable combination leading to a marginalized and less prosperous Europe

What’s the difference between the European Union and the Titanic? Answer: the Titanic was holed by a single immovable object and took minutes to sink. The EU, another allegedly “unsinkable” project, is taking a little longer. As if Eurozone crisis and keeping Greece afloat wasn’t threatening enough, the next crisis is looming: energy – a crisis entirely of the EU’s own policy-making.
The EU’s ideologically-driven Energy Road Map prioritized ‘green’ renewable energy, diverting away from Russian natural gas dependency and harmonizing energy and environmental needs. The result: a devastatingly inept screw up that threatens continent-wide power outages even, as Die Welt recently reported, in Germany as early as next winter.
In short order, EU energy policies have created an unsustainable, publicly-subsidized, market-skewing ‘green’ energy bubble, eschewed a cheap fossil fuels policy and realistic alternatives to Russian gas imports. Together those failed policies have resulted in the double double-whammy of soaring of energy prices and, as is now being reported, diminishing European industrial competitiveness.
While times were good, political elites could make out a case for high taxation and subsidies to a market they believed to be in our best interests. But hard-pressed economies across Europe, including Germanythe UKItaly and Spain, are currently falling over themselves to slash generous renewable energy subsidies that have demonstrably failed to deliver a viable power generation-to-investment ratio. They have also failed to impact global carbon emissions and, where green jobs were created, they often proved to be at the expense of real jobs. As if that wasn’t enough, the US, which refused to bust its economy by signing the Kyoto Protocol, is beating the pants off Europe when it comes to cutting CO2 emissions via new technology and the switch to natural (largely shale) gas.
In Germany, domestic electricity bills are set to double in the next ten years. German banks have also been banned from financing offshore wind farms as they are “unproven technology”. The truth is, we know only too well how inefficient, intermittent and unreliable all wind turbines are, not least as they require expensive gas turbine back-ups at every turn; two facilities where previously one – and a much cheaper one at that – did the job extremely efficiently.
In addition, the climate and peak oil alarmists colluded to try and convince us we had no alternative to the green revolution as the earth’s finite resources, especially oil and gas, were running out. But, as some of us have long pointed out, for all practical purposes the earth’s supply of fuel is actually infinite. The advent of the hydraulic fracturing revolution to develop shale gas and oil has proved a devastating global game-changer. And beyond that, methane hydrates blow away even what shale gas and shale oil resources offers. The Green River Formation in the United States alone holds around 200 years of oil at current US consumption levels. Canadian oil sands offer an even bigger prize – hence the US furore over the Keystone pipeline to ship the oil south of the border. China, the UK, Argentina, among many others, have world class domestic natural gas awaiting development. More pertinent for our purpose here, however, is the extent of Europe’s shale gas reserves which pretty much matches that being exploited in the United States; a singular fact that brings us to our second issue.
Europe’s eschewing of its cheap domestic, viable and economic fossil fuels. Instead the EU’s ideological elites, driven by an irrational fear of a harmless trace gas (CO2), prefer high taxation and regulatory regimes to fund ‘green’ energy. Cocooned in the lavish splendour of Brussels and Strasbourg the political elites have no problem in seeing increasing numbers in Germanythe UK and elsewhere forced into fuel poverty to pay for their green dream. Meanwhile Europe’s vast coal and shale resources are not being developed as governments, hard-pressed by pointless and ineffective emission quotas, are locked in an idiotic foot-dragging exercise over the hydraulic fracturing (fracking) extraction process; a process central to most mining extractions for over 60 years.

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