When I wrote yesterday about the growing unemployment in Europe, I noted that manufacturing in Europe was in real trouble, having been losing jobs every month for quite a while now.
Today Walter Russell Mead explains one big reason why: natural gas. Natural gas now costs about one-fourth as much in the United States as it does in Europe. The reason for that is, of course, fracking, which has been largely welcomed in the United States, except on federal land and such places as New York State. There Governor Andrew Cuomo would rather pander to the “environmentalists” who show up at expensive Democratic fundraisers in chic New York City venues than help out the deeply depressed upstate economy, which is sitting on trillions of cubic feet of natural gas.
In Europe, however, despite much potential for fracking natural gas, the greens have largely prevented its exploitation. That has had and will have a serious impact on European manufacturing. Mead quotes the Washington Post which graphs the price differential:
Top BASF [a giant German chemical firm] officials say that unless Europe allows a more aggressive approach to energy production, including broader use of hydraulic fracturing, or fracking, even more manufacturing will move to the United States.
As Mead says, “this is yet another reason to be optimistic about America’s future.”