Friday’s Independent newspaper reports on an announcement from UK’s Tata Steel that it will be cutting 720 jobs in its specialty steel business. The company pointed to “cripplingly high electricity costs” in the UK, more than twice as high as its European competitors face, as a key reason for the job losses.
This announcement comes on the heels of a joint report from the trade association UK Steel and trade union Community issued July 16 warning that costs associated with Europe’s Emissions Trading System could raise the price of a tonne of steel by £29 (about $45) by 2030 and raise total annual costs by £300 million (nearly $470 million).
These woes are just latest example of Europe’s energy-intensive industries struggling to survive in the continent’s high energy cost environment. Europe is learning the hard way that its exorbitant energy prices, largely a deliberate policy choice, are ruining the global competitiveness of its energy-intensive industries, which are becoming something of an endangered species.
More and more, we’re seeing European companies shifting production to the U.S. and why not? Affordable fuel and electricity give American-based industry an enormous economic advantage that’s driving a manufacturing revival in areas of the country desperately in need of jobs and investment. Data from the International Energy Agency show that European industries pay two to four times more for electricity, coal, and natural gas than American industries.
The Environmental Protection Agency’s latest proposal to cap carbon dioxide emissions from power plants, however, threatens to put the United States on the path to higher and higher energy costs, sacrificing America’s energy edge and putting our manufacturing renaissance at risk—and all for no environmental gain.
With EPA in charge of U.S. energy policy, don’t think it can’t happen here. It can and it will.