Thursday, May 16, 2013

Hedegaard: Forget US-style shale gas revolution

Closer cooperation between European countries and an emphasis on energy efficiency would be more effective at lowering prices in Europe than dreams about an American-style shale gas boom, the EU's climate chief said on Thursday (16 May).
Speaking at the European Business Summit, EU Climate Commissioner Connie Hedegaard called for “clever regulation” to drive innovation and for a liberalised EU energy market to lower prices, saying renationalisation would be more costly than European-wide climate policies.
“We need efficient and also cost-efficient energy systems. We need to liberalise the energy market, a Europeanised market. It is wrong that renationalisation will be cheaper. Of course you cannot have climate policies that cost nothing,” she said.
Hedegaard was attempting to allay business concerns that the cost of EU climate policies was stunting their growth compared to other countries such as China and the United States, which have less stringent environmental regulation.

Adrian van den Hoven, deputy director general of the BusinessEurope employers' association, blamed green taxes for putting European companies at a disadvantage against global competitors.
“Looking at the 2020 to 2030 period, European Commission climate directives are creating some big costs. It would be manageable if the rest of the world also faced the same cost factors. That is not the case,” he said, adding that the EU could learn from the US’s shale gas boom, which has slashed energy costs.
“The investments going to [shale] plants are huge in terms of job creation. We need to reduce the EU-US differential.”
But Hedegaard dismissed the BusinessEurope argument as “yes [to climate action] but not now”. “Even without the climate policies we would still have a US shale gas problem," she said.
“In the European Commission we don’t mind shale gas. If the member states want to do shale gas, they can do it. Their energy mix is up to the member states," she said.
And "even if they decide to do shale gas, experts will tell you that the EU won’t get its prices down to US levels,” she added.

Different terrain
Hedegaard stressed that the geological and geographical factors of Europe shale did not make its large-scale exploitation as cost-effective as in North America. Imports of fossil fuels are no longer the answer, she said. “€1 billion of oil every day was imported [to the EU] last year. Efficiency can do our economy very well."
“Working together, that is one thing we are not good enough at,” she said, calling for greater pooling of resources.
The Paris-based International Energy Agency (IEA) also has doubts about shale gas, saying increased production would only make sense if it replaces highly-polluting coal. “The optimum path would be to see more renewables, more efficiency and more low carbon technologies,” the IEA's chief economist, Fatih Birol, told EurActiv last year.

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