Cheap US Energy Could Damage Europe, German Industry Group Warns

An upcoming report from a German industrial grouping warns that cheap US shale gas could damage European competitiveness.

The report, from industry federation BDI, is to be published shortly.

It estimates that electricity prices for German industrial users will rise from €90 ($115) per kilowatt-hour (kWh) today to €98 or even €110 in 2020. US prices are expected to rise only from €48 to €54 in the same period.

Harald Schwager, a member of the executive board of chemicals company BASF, told the Financial Times: “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.” BASF recently converted its steam-cracker in Texas to run on shale gas and says its production complex in Louisiana is very competitive.