Vladimir Putin: Hero of the European Union

Vladimir Putin's adventurism in the Ukraine has had a strange side effect: it may well have prolonged the life of his chief rival and antagonist – the European Union – by several years. (h/t Benny Peiser - Global Warming Policy Foundation)

Until Russia began rattling its sabre, the EU's economy was locked in a downward death spiral. There are lots of reasons for this (excessive regulation; the difficulties of having northern and southern European economies operating at very different speeds; incompetence, waste and an ageing demographic...), but if you had to pick the one factor that was dooming it above all, I'd say it was environmental regulation. Specifically, the EU's ongoing war on fossil fuels and its championing of expensive, inefficient, "renewable" energy have virtually destroyed the economies of Spain and Portugal, given Denmark the world's most expensive electricity, and hamstrung even the industrial might of Germany.

But it's amazing what the threat of war – or, best case scenario, of being held hostage by Russian oil and gas producers – can do to concentrate the mind.

Consider the tough new environmental laws passed by the EU parliament in Strasbourg this week. The significant part is – much to the irritation of the green activists who infest the EU – the new regulations specifically excluded shale gas.

For the EU this will be, if not necessarily a life-saver, at least a pretty significant dose of economic Viagra. We've seen, already, how the shale revolution has benefited the US, where the gas price is roughly a third of what it is in Europe. What has been sorely lacking, until now, is the political will within EU's member states to exploit their shale gas reserves. In France (because it can: it's got nuclear) fracking is banned, as it is in Bulgaria. And even those countries which are more or less pro shale gas - eg Britain and Poland - have been pitifully slow to get fracking.

But just look at what a difference Putin has made.

On Tuesday, the Polish government announced that its home grown fracking industry would be tax-free through to 2020.

Günther Oettinger, EU energy commissioner, has called for the building of more terminals for liquified natural gas and for EU members to begin drilling for shale gas.

Markus Beyrer, the secretary general of Business Europe, the EU employers' association, has called on EU leaders to be "less emotional" (i.e. less vulnerable to eco-hysteria) in their approach to fracking.

He said this week:

"We think that we have to balance climate policy, but also cost competitiveness and security of supply. And of course, recently, the issue of security of supply has been added an extra element of external dependence."

Gordon Moffat, director general of steel industry group Eurofer told Reuters:

"Given the absolute necessity for Europe to diversify its sources of supply of gas and to find solutions to the huge energy price differential with its main competitors, we see no alternative but to proceed as rapidly as possible with shale gas exploitation as part of the energy mix in Europe."

In other words, Vladimir Putin has achieved something that economists, industrialists, analysts and conservative politicians have found quite impossible: he has finally persuaded the EU that when push comes to shove, survival is a much more attractive option than meaningless obeisance to some imaginary green sky fairy.


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