EU Energy Prices

🇪🇺 Mario Draghi is absolutely correct to highlight the issue of energy prices as a key driver in the EU's competitiveness gap. At least since the '70s, we have understood the correlation between energy prices, the economy, and inflation. Keeping energy prices low is essential for a healthy economy. We have repeatedly stressed the importance of a smooth transition to clean energy, which means that we must keep energy prices low during the transition, which Europe has not done, unfortunately.

Harris mocked our persistent pressure on the Biden Administration to keep the energy prices down in the USA during the energy crisis, which demonstrates that she doesn’t understand the relationship between energy prices and the economy, or worse, she doesn't care. This is one of the reasons we refuse to endorse her, but there are others. Fortunately, Biden listened to those of us pressuring him on energy prices, rather than Harris, and the US economy is doing much better than Europe’s right now because of it. The USA was also in a much better position than Europe before these global crises began, because we achieved energy independence before they happened. However, during the height of the crisis, we reached maximum energy production capacity and our energy prices started to rise as well. We had numerous reserves on hand, which we have kept on hand since the '70s energy crisis, and we released those reserves to stabilize our prices and prevent an economic catastrophe. We couldn't prevent inflation, but we did prevent it from being much worse by keeping energy prices as low as possible and ensuring several of Biden's domestic policies never got passed.

To keep energy prices low, nations must ensure that they have an adequate supply of energy to meet energy demand. This is more complicated in Europe, because they have limited natural resources, but there are things that Europe could have done differently to prevent the situation they are currently in. For one, Europe should not have phased out old energy sources before they were able to meet their energy demand with renewable sources. So taking down nuclear power plants, which are clean energy by the way, blocking oil and gas leases, like the UK has done, have all contributed to the rising energy prices that are creating this nightmare economic scenario in Europe, which Draghi has referred to as a slow agony, others as death.

What Europe needs to do right now is to prioritize reducing energy prices, without sacrificing European security. Europe can’t become dependent on adversarial nations for their energy needs. In the short-term, Europe should consider remobilizing their old energy supply sources temporarily, because these energy sources were shut down prematurely, before Europe was capable of meeting their energy needs through renewables. Europe may need to bring some of their old nuclear plants back online. Europe might even need to reconsider coal in order to get out of this economic slump.

In the long-term, Europe needs to continue to invest in made-in-Europe renewables, not made-in-China renewables. Europe should continue to invest in new nuclear to meet the energy-intensive industries' energy needs. Europe should maintain energy reserves like the USA does, so they can release reserves to stabilize prices when a crisis happens. Europe's energy reserves mix should be the same as the current energy consumption mix: battery storage for renewables, gas storage tanks for LNG, oil reserves.. etc. Europeans need to strategize as a group on energy security, rather than competing with one another to meet their energy needs. And Europe also needs to protect and defend what limited natural resources they have that would allow them to be energy independent like the USA.

Ukraine, for instance, has one of the biggest natural gas reserves in Europe, before Russia stole it from them, almost as big as Norway's reserves, so defending Ukraine, preserving Ukraine’s territorial integrity, and bringing Ukraine into the European Union and NATO is one way for the EU to become much closer to achieving energy independence and energy security. We considered all of this when we created our foreign policy on Ukraine. We were thinking about Europe’s needs, as well as our own, and of course, we wanted to do what was right for the Ukrainians.

xo