UK Secretary of State for Energy and Climate Change, Ed Davey, is worried about rising energy costs in Europe whilst energy costs in N America are going in the opposite direction. But he doesn’t seem to understand the root cause of the situation or how to tackle the problem.
- Primary energy production peaked in Europe in 1996 at 1138 million tonnes oil (mmtoe) equivalent and has since fallen to 970 mmtoe in 2012. That is a drop of 15% (Figure 1)
- In N America, primary energy production hit a new peak in 2012 of 2512 million tonnes oil equivalent. That is up 8.5% since 1996 (Figure 1)
- Rising energy production in N America and falling Energy production in Europe lies at the heart of energy prices trading in opposite directions on either side of The Atlantic.
- Europe has a population of ~ 739 million who produce 1.31 tonnes oil equivalent (toe) per capita per annum. N America has a population of ~ 529 million who produce 4.75 toe per capita per annum, 3.6 times more than Europe.
Figure 1 Primary energy production in Europe (right hand scale) and N America (left hand scale). Chart not zero scaled. Europe includes all countries reported by BP lying to the west of the Former Soviet Union. N America includes Mexico, USA and Canada.
Figure 2 Primary energy production in Europe peaked in 1996, marked by the arrow. Unilateral effort to combat CO2 emissions and global warming has resulted in significant growth of expensive, unreliable electricity (other renewables) that has partly offset decline in oil, gas, coal and nuclear that have been largely neglected on this side of the Atlantic. Every year, Europe must dip deeper into competitive global energy markets, sending prices higher.
Figure 3 Primary energy production in North America hit a new high in 2012. Shale oil, shale gas and oil sands production in N America underpins primary energy growth on that continent. Note how other renewables are relatively less important compared to Europe.
In an exclusive interview with The Independent newspaper Ed Davey is reported as follows:
….neither Labour leader Ed Miliband’s pledge to freeze energy prices for two years, nor a UK fracking boom, would reduce household bills.
Instead, he said there was an urgent need to build a giant network of electricity interconnectors across Europe, allowing vast amounts of energy to be moved between countries, driving down prices.
“Literally in the last three or four years, there has been a complete change in the differential between the North American price for gas and energy and the EU price for gas and energy,” he said. “That represents a strategic change in the terms of trade and is very significant. The EU needs to respond to this very quickly.”
It is in my opinion woefully misguided to believe that moving “vast amounts” of non-existent energy around the continent will solve anything. This is simply more hot air, blowing in the wind, while Europe’s poor suffer mounting energy poverty. European leaders and policy makers need to understand one simple point. There is an urgent need for the continent to produce vast amounts of new primary energy.
Options are at present limited to:
- Significant expansion of nuclear power
- Enhanced oil recovery in the North Sea
- Exploration for shale gas and oil
Other strategies that would make a difference are aggressive pursuit of energy efficiency measures, the abolition of climate change laws and CO2 reduction targets and the removal from office of Green politicians.