This is a rather silly article. Yes, elevated fossil fuel prices are bad for Europe, but they're worse for the USA, even if the USA has more domestic supply. The USA is a significantly more oil and gas intensive economy than the European economy, and will suffer greater economic fallout from the rise in prices than the European economies. Sure, US fossil fuel companies are making huge profits, but that's nowhere near enough to offset the economic damage it does to the rest of the US economy when energy prices spike.
Furthermore, US voters are significantly more sensitive to inflation, and the US administration is more vulnerable to the political fallout of this price spike because they'll be blamed for it more directly by voters.
As for these examples that are meant to sound scary:
> As we speak, jet fuel reprices. LNG cargoes are rerouted mid-voyage. Summer flight schedules thin out. Across the industrial corridors of Germany and the Netherlands, energy-intensive firms that survived the Ukraine war crisis at enormous cost are running the numbers on a second shock.
* LNG cargoes being re-routed to Asia is because Europeans are more willing and able to reduce gas import levels in response to price jumps than Asian countries, because Europe is less gas dependant (especially in the warmer months of the year), and are more able to sit out the bidding war. That's not a bad thing.
* The flights that are being thinned out are almost entirely the ludicrously cheap short-haul flights used by people who decide "hey, why not take this flight, it's only 50 euros". These flights have real substitues with train and car travel. It's not a serious economic indicator if these trips are being reduced in response to fuel price spikes. People have actually been fighting for a while to try and get rid of these flights for climate reasons.
* The energy intensive firms in Germany and the Netherlands are running the numbers and are mostly finding they'll be okay, especially if they speed up on their already ongoing electrification programs.
_______________
I'd love for European electrification to go faster, and I do think that we'd be in a better position right now if it had gone faster over the past couple years.
However, the reality is that electrification in Europe, especially in economic sectors where energy usage is a significant chunk of input costs, has been going forward at a rapid and reliable pace.
Trump's new adventure and its subsequent supply shocks are just going to speed this up even more.
Numerous commentators have already pointed this out, the dementia patient has done more for the takeup of solar and wind and EVs than any amount of COPxx talking ever achieved. I doubt he's aware of how much he's done to promote, or at least incentivize, the environmentalist cause.
High oil prices are good for most of the oil industry, but the oil industry is only like 3% of the US economy.
On the other hand, elevated oil prices are bad for a very large chunk of the other 97% of the US economy, who rely on buying oil and oil derived products in order to operate their industry.
The whole article feels little bit like Brexit articles in 2018, where people were spelling doom for EU and only upsides for UK, while ignoring how UK leaving EU could be positive for EU and severely damage UK.
> The US know this and is working to postpone as long as possible the Europe’s chances to exit its oil and gas addiction. The US also knows European firms depend on the US market for their largest overseas revenue streams and depend on US digital infrastructures for their operations
This is a rather silly article. Yes, elevated fossil fuel prices are bad for Europe, but they're worse for the USA, even if the USA has more domestic supply. The USA is a significantly more oil and gas intensive economy than the European economy, and will suffer greater economic fallout from the rise in prices than the European economies. Sure, US fossil fuel companies are making huge profits, but that's nowhere near enough to offset the economic damage it does to the rest of the US economy when energy prices spike.
Furthermore, US voters are significantly more sensitive to inflation, and the US administration is more vulnerable to the political fallout of this price spike because they'll be blamed for it more directly by voters.
As for these examples that are meant to sound scary:
> As we speak, jet fuel reprices. LNG cargoes are rerouted mid-voyage. Summer flight schedules thin out. Across the industrial corridors of Germany and the Netherlands, energy-intensive firms that survived the Ukraine war crisis at enormous cost are running the numbers on a second shock.
* LNG cargoes being re-routed to Asia is because Europeans are more willing and able to reduce gas import levels in response to price jumps than Asian countries, because Europe is less gas dependant (especially in the warmer months of the year), and are more able to sit out the bidding war. That's not a bad thing.
* The flights that are being thinned out are almost entirely the ludicrously cheap short-haul flights used by people who decide "hey, why not take this flight, it's only 50 euros". These flights have real substitues with train and car travel. It's not a serious economic indicator if these trips are being reduced in response to fuel price spikes. People have actually been fighting for a while to try and get rid of these flights for climate reasons.
* The energy intensive firms in Germany and the Netherlands are running the numbers and are mostly finding they'll be okay, especially if they speed up on their already ongoing electrification programs.
_______________
I'd love for European electrification to go faster, and I do think that we'd be in a better position right now if it had gone faster over the past couple years.
However, the reality is that electrification in Europe, especially in economic sectors where energy usage is a significant chunk of input costs, has been going forward at a rapid and reliable pace.
Trump's new adventure and its subsequent supply shocks are just going to speed this up even more.
Numerous commentators have already pointed this out, the dementia patient has done more for the takeup of solar and wind and EVs than any amount of COPxx talking ever achieved. I doubt he's aware of how much he's done to promote, or at least incentivize, the environmentalist cause.
I guess, a high oil price is a good thing for the oil industry, especially when producing oil domestically becomes more expensive.
But I also don't believe in some conspiracy by the American oil industry to eliminate other suppliers in order to fleece Europe.
(the article is not by Henry Farrell itself, it seems to be below his niveau)
https://shalemag.com/peak-oil-production-in-the-us/
High oil prices are good for most of the oil industry, but the oil industry is only like 3% of the US economy.
On the other hand, elevated oil prices are bad for a very large chunk of the other 97% of the US economy, who rely on buying oil and oil derived products in order to operate their industry.
The whole article feels little bit like Brexit articles in 2018, where people were spelling doom for EU and only upsides for UK, while ignoring how UK leaving EU could be positive for EU and severely damage UK.
We'll get there.Today I was payed for using electricity. Market prices were negative. Yesterday they were too.
https://elex.mk/platform
I filled up my car and batteries and even though negative prices will be scrace in the future near 0 euro prices won't be.
I am happy with the high prices because they push us to renewables even faster.
I don't care about gas prices either. But next winter is going to be expensive. I don't have the option of switching from natural gas to a heat pump.
But of course, electrification as soon as possible.
US is making US pay dearly for it's anti-electrification policies.
> The US know this and is working to postpone as long as possible the Europe’s chances to exit its oil and gas addiction. The US also knows European firms depend on the US market for their largest overseas revenue streams and depend on US digital infrastructures for their operations
Huh?