WSJ: Cheap U.S. Gas Is Europe's Loss

Cheaper natural gas prices in the U.S. could spell trouble for European chemical companies, as their rivals across the Atlantic benefit from lower costs.

The U.S. shale-gas revolution has made natural gas roughly three times cheaper there than in Europe, and the U.S. chemical industry is reaping the benefits through cheaper energy and feedstock, leaving the European sector under the threat of increased competition.

"Production costs with shale gas are lower than anything we can achieve in the short term in Europe," said Harald Schwager, a member of the board of executive directors at German chemical giant BASF.  The rise in U.S. competition will first be palpable on highly energy-intensive products, but in the long term there is a risk that the whole supply chain will be hit, Mr. Schwager added.  MORE