says industrial energy users coping well with U.S. price gap
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[January 07, 2014]
By Barbara Lewis and Karolin Schaps
BRUSSELS/LONDON (Reuters) — Industrial
energy consumers in the European Union have dealt well with a large
energy price differential to peers in the United States but should
remain concerned about high prices, the EU executive said in a draft
policy paper seen by Reuters.
Europe's industrial energy users have been paying more than twice
the electricity price and four times as much for gas as their U.S.
peers who have benefited from a boom in shale gas.
European users have complained about a lack of action from EU bosses
to address the discrepancy which they say has impacted their
EU leaders will discuss the issue at a summit in March.
A draft paper prepared by the European Commission in advance of the
meeting showed the EU feels its industrial users have so far been
able to lessen the effect of the price discrepancy by using their
energy more sparingly than U.S. peers.
"This divergence in EU-U.S. energy intensity trends has partially
helped EU industry to offset the energy price differential with the
U.S. and hence might have acted as a buffer to the U.S. shale gas
surge," the Commission said.
Its analysis showed the EU-U.S. traded goods balance has been
consistently positive for the EU, meaning the EU's market
performance in the United States has not been visibly affected.
In addition, current energy prices in the United States are free
from the impact of shale gas exports.
"Any such opening (to exports) might limit future price
differentials with the EU," the Commission said, adding that
potential extra costs on shale gas producers for environmental and
health impact may further increase U.S. prices.
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The U.S. government has given the green light for companies to
export shale gas on liquefied natural gas (LNG) tankers and the
first export terminal is planned to open late next year.
At the same time, the Commission urged industrial users to remain
cautious about high energy prices as the full impact of the price
differential may be felt with some delay.
"Moreover, energy efficiency improvements may slow down in the EU
and speed up in U.S. due to diminishing low cost options and
increased policy effort respectively," the Commission said in its
(Editing by David Evans)
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