This is the reason Germany is deindustrialising

in #economy25 days ago

Natural gas prices in the USA are cheaper than in Europe. Here is the chart:


source

Former German Chancellor Angela Merkel made a strategic mistake; she ordered an accelerated decommissioning of Germany's fleet of safe functional nuclear reactors. Instead of closing them in 2032, she brought the decommissioning forward to 2022. The energy they supplied would be replaced by cheap Russian gas.

Only, the Ukraine war intervened, the Russian pipelines got blown up, and Germany is now reliant on Liquefied Natural Gas (LNG). Because LNG has to be shipped vast distances by sea, it's more expensive.

That means energy in Germany is structually more expensive than in 2019.

The USA has no such problems. It's fracking cheap natural gas in the Permian basin in the Dakotas, and this is piped across the continental USA.

Therefore, it's a no-brainer for energy-intensive industries to relocate from Germany to the USA.

The only thing that would bring energy costs in Germany down is if it too started fracking the known gas deposits in Germany. Alas, both the EU and the powerful German environmental lobby are against this.