The EU model was built on cheap hydrocarbons
Tom KirkmanIndependent Project Manager
The EU economic (and political) model was built on cheap, abundant, reliable, hydrocarbon *energy*.
Take cheap, reliable, abundant energy out of the equation, and the EU economic model will eventually go into unrecoverable economic decline, and eventually fracture.
Hydrocarbons are what power modern civilization (and heavy industry).
Nuclear assists hydrocarbons in making modern civilization possible.
EU as an economic + political consortium
(which was cobbled together and added too many countries to its group)
will slowly break apart.
Reminds me of the over-expansion of the increasingly unwieldy NATO.
Heavy manufacturing (especially in the former economic powerhouse Germany) will move out and go elsewhere, to some other place where energy is cheaper and abundant.
Intermittent sunshine and breezes will not save German heavy industry.
10 years of Germany’s attempts to do so have proven conclusively that this
“Sunshine and Breezes” energy + economic model *does not work*.
Cheap natural gas works.
Removing cheap natural gas from the economic equation seems likely to spell the gradual, inevitable demise of the EU political + economic model.
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“BASF plans to cut 2,600 jobs and reduce production in Germany as Europe’s biggest chemical producer braces itself for a future without cheap Russian gas.
The company is closing a number of energy-intensive factories, including two ammonia plants and related fertilizer facilities, resulting in 700 job cuts at its main Ludwigshafen site in Germany.
BASF also forecast lower earnings this year and said it will end a stock buyback early because of a deteriorating global economy.
The shares fell as much as 7% in Frankfurt, the most since June.
● “High energy prices are now putting an additional burden on profitability and competitiveness in Europe,”
BASF Chief Executive Officer Martin Brudermüller said in a statement in which he also cited
“overregulation, slow and bureaucratic permitting processes,
● and in particular, high costs for most production input factors.”
Germany’s chemical sector, supplying auto, pharmaceutical and agricultural companies, is
● particularly [natural] gas-intensive and made up around
● 15% of the country’s total annual use of the fuel before the war.
While Europe’s biggest economy has been successful in securing alternative supplies, the new sources aren’t as competitive as gas from Russian pipelines that accounted for more than half of Germany’s imports before the invasion.
With virtually no prospect of those imports resuming, the outlook for German chemical, glass and building-material companies, where ● gas and electricity can account for a third of costs, is bleak. …