Europe Risks Losing 30 Million Jobs to U.S. Shale BoomPriyanka Sharma and Lananh Nguyen
The U.S. shale-gas boom is placing 30 million jobs at risk in Europe as companies with greater reliance on energy contend with higher fuel prices than their American counterparts, the International Energy Agency said.
Manufacturers of petrochemicals, aluminum, fertilizers and plastics are leaving Europe to take advantage of booming U.S. production of natural gas from shale rock formations, Fatih Birol, chief economist for the International Energy Agency, a Paris-based adviser to 29 nations, said at a conference in London today.
“Many petrochemicals companies in central Europe are moving out,” Birol said. “Thirty million jobs are in danger.”
The U.S. has become the world’s largest producer of oil and gas as hydraulic fracturing and horizontal drilling help producers extract resources from shale rock. The country’s refineries processed a record volume of crude last week as plants took advantage of cheaper domestic crudes. Chemical makers from Germany’s BASF SE to Brazil’s Braskem SA plan to invest as much as $72 billion in U.S. plants to take advantage of low-cost natural gas feedstock.
West Texas Intermediate crude traded at a discount of $5.85 a barrel to European benchmark Brent at 5:43 p.m. on the ICE Futures Europe exchange in London. U.S. August natural gas futures traded for $3.96 per million British thermal units on the New York Mercantile Exchange, compared with $6.49/MMBtu for the equivalent U.K. contract on ICE in London.
U.S. refineries are competing for market share and benefiting from margins that exceed those of European competitors by as much as $10 a barrel because of cheaper crude, Hermes Commodities said in a report today.