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Steinar Solheim, ‎Chairman, Gas Working Party, IFIEC Europe – International Federation of Industrial Energy Consumers IFIEC represents the interests of industrial energy users in Europe for whom energy plays an important component of production costs and is a key factor of competitiveness in their activity in Europe Europe’s manufacturing sector remains an important part of its economy. It represents 80% of Europe’s exports and 80% of its private research and innovation. Unfortunately its share of the global market has been declining since 1990s resulting in its share of Europe’s GDP falling to only 15.1% in 2013. Since 2008, 3.5 million jobs have been lost in the sector. This has been exacerbated by the recent financial crisis further undermined by Europe’s rising energy costs where Europe has seen a 70% increase since 2000.  Natural gas prices are now 3 times higher in Europe than in the United States. This problem could persist according to a forecast from the International Energy Agency showing that electricity costs in Europe could be 50% higher than in the U.S. and 300% higher than in China by 2035.  Consequently manufacturers are under considerable commercial pressure to cut costs or move their business to other regions with lower energy prices, just to remain competitive in the global market. The EU has recognised the need to address the competitiveness issue and thatindustry must be placed centre stage if Europe is to remain a global economic leader. On 22 January 2014, the European Commission adopted a new Communication on industrial policy “For a European Industrial Renaissance”. As part of this Communication the Commission called on the Council and the European Parliament to adopt proposals on a number of issues to facilitate Europe’s competitiveness, including energy, as well as to implement and enforce legislation to complete the internal market. In response to the problem, over 175 leading European manufacturers representing more than 1.2 million employees published a public manifesto asking European Heads of State and of Governments to come up with a more integrated approach towards its industry, energy and climate policies to enable the manufacturing industry to grow in Europe.  It can be read in full here. The initiative was coordinated by IFIEC Europe, the International Federation of Industrial Energy Consumers. Our organisation recognised that Europe’s manufacturing industry is facing a critical situation when it comes to energy prices. In its European Energy Security Strategy, which is fully consistent with its competitiveness and industrial policy, the Commission highlights to importance of indigenous resources to decrease dependency on external resources. This includes shale gas. IFIEC Europe sees a clear role for shale gas in achieving its aim to reindustrialise Europe. As an indigenous source of energy it will help Europe diversify and strengthen the security of its gas supply on the condition that exploration and production takes place in an environmentally acceptable way.   It could also ensure that gas prices remain competitive. While shale gas development in Europe is unlikely to cause gas prices to drop as dramatically as has happened in the US, a recent study carried out by Poyry Management Consulting states that developing shale gas could reduce energy prices compared to a ‘no shale’ scenario, and relatively lower prices would in turn reduce costs for industry. European industrial competitiveness is not something we can ignore. Earlier this month Fatih Birol, chief economist for the International Energy Agency, announced that Europe risks losing 30 million jobs to the US due to the shale boom and the low price of gas that it can offer energy intensive industries. The development of shale gas could be crucial.  It is therefore imperative that EU Member States make every effort to review its potential within the context of a broader industrial renaissance.  Europe needs its industry and it needs the jobs that go with it.

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