Europe has so many historical and cultural wonders that even the reddest of red-blooded Americans can find something European to be envious of. After all, it was Europeans who gave us Led Zeppelin, pizza, and beer and personally, I think it’s high time we consider adopting the siesta as a national policy. But what we don’t need to migrate across the pond are European energy prices.
Europe grew to be a manufacturing juggernaut in the 20th century utilizing technical acumen as well as the energy resources it had available. But manufacturing consumes massive quantities of energy, and while the continent was blessed with several Wonders of the World, it was not bestowed the greatest of energy resources, forcing it to increasingly rely on imports. Additionally, over the last two decades, the European Union and many of its members have stumbled down an experimental path of making energy less accessible and more expensive. By making energy use more expensive, these policies have strained Europe’s once mighty manufacturing sector.
Meanwhile, the energy revolution in the U.S. over the last decade has brought us some of the lowest energy prices in the world, and a subsequent manufacturing renaissance. We’ve already witnessed tens of billions of dollars invested in U.S. manufacturing with more on the way. But --and this is a big but--, this isn’t a fate accompli. In fact, it has become vogue in certain extremist circles for politicians and the special interests that support them to champion EU energy policies and prices and wish them upon America.
The latest installment in our Energy Accountability Series asks the question, What If…The United States Was Forced to Pay EU Energy Prices? In the spirit of Halloween, our analysis found the answer to be positively ghoulish. Importing EU energy prices to America would cost our economy about $700 billion and almost 8 million jobs. From a consumer standpoint, every household would be shelling out $4,800 more per year.
Some states in particular would be hit hard. With its high level of fixed income residents, Florida would shed almost $30 billion from its economy. Other states blessed with robust manufacturing sectors would really be hobbled. Ohio would lose almost 190,000 jobs and Michigan about 160,000. Michigan would shed $12 billion from its economy, Illinois more than $17 billion and Ohio almost $15 billion. Our analysis found major contractions in industries ranging from poultry to paper to food manufacturing.
The bottom line is EU energy prices would be disastrous. So let’s keep importing the scrumptious chocolate—but leave the bad policy across the Atlantic.