WHAT SHOULD EUROPE DO ABOUT HIGH ENERGY PRICES?
Though Europe might have to live with higher energy prices than the US, it does not face a trade-off between remaining competitive and becoming sustainable. Europe will continue to see substantially higher energy prices than the US for a prolonged period of time – at least that is the verdict of Fatih Birol, chief economist of the International Energy Agency (IEA). This, the IEA argues, is mainly because of differing geological conditions. Even if it wanted, Europe could not easily escape the cost disadvantage by aggressively pursuing domestic production of oil and gas. The analysis that the extraordinary natural gas resource endowment of the US, and that the high cost of transporting gas across the Atlantic might lock-in price differentials […]
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