Global Investing

European industry feels the heat of high oil prices

June 27, 2008

Castle Cement furnace

European industry is suffering under soaring energy costs. Profit warnings are becoming more common and industry leaders predict plant closures and job losses may follow.

Companies say they are doing all they can to improve their game but want government help.

Britain’s Castle Cement, part of Germany’s Heidelberg Cement, is a case in point. Its cement furnace in Stamford, England, is replacing much of its coal with  alternatives  — tyres, bone meal, paper – as $140 a barrel oil sends all fuel costs skyrocketing.   

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Industry says tax cuts and energy market reform is needed. Big energy users also want an easing in EU plans for tough CO2 emissions cuts, arguing the measures will simply put them out of business and shift production to places like China which have less efficient and more environmentally damaging production processes.

So, are governments doing enough to support the continent’s core industrial base?

Should certain sectors of the economy be singled out for special support?

Will planned European CO2 cuts, which are not matched by the U.S. and China, wreck the continent’s industrial core without helping the environment?

Comments
6 comments so far | RSS Comments RSS

Apart from all the ‘money’ concern….has we forgotten about the fact that this is the world that we are living in ?

Those big corporations, and countries all over should be allotting their funds in finding and developing on green energy resource, rather that keeping their nose on the oil price. The price is gonna keep on climbing as we should be well aware that crude oil will run out, one day or sooner.

 

Again U.S. automakers GM, and other large firms get caught behind the 8 ball. As in 1973, and 1977 the US had their minds on large gas guzzlers. Can’t they understand the days of large cars is gone. Smaller more fuel conscience cars are the sellers, and will be even if the public says different. Now the American tradesman will pay the price for his greed.

Americans buy all imports, then cry when they have no jobs. For the sake of a few dollars we send all our jobs overseas. Now we save the extra 5% by this tactic, but sell our souls to china, mexico, and more. I wouldn’t mind if the products were good, but they suck in quality.

Posted by Mike New York | Report as abusive
 

At current consumption growth and reluctance to switch to alternative fuels, oil will only get more expensive and aggravate the problems.

And I doubt they are in a hurry to shift productions to China as high shipping fees are now the equalizer for cheap labor.

The transition will be uneasy but the government should stand firm on tough measures and provide some cushion in the form of tax incentives.

 

Governments are not doing enough to support the continent’s core industrial base.

World is still using wrong parameters to calculate CO2 emissions. Poor people who don’t have any facilities (gas, electricity, car) and still they are using wood to cook their food, who will follow up these data as no body can find them in their national record. China and India are the two most populated countries in the world. Both China and India are covering around 36% population of the world. Almost 36% “drinking water consummation” of the world is by these two countries itself.

Why rich countries should pay more taxes for the CO2 emissions?

Posted by A.Y. | Report as abusive
 

High energy prices, limited natural resources and unsafe climate along with the US downfall economy all is leading to the so called our globalize world into the territory of “Nationalization”.

Above all the countries are impending the technical trade barriers like the European Union are implementing REACH, transportation barriers in terms of increasing freight cost & oil prices fluctuations, export restriction of necessary commodities, all are deteriorating the globalize world and leading to nationalism.

Hence this perplexed and unbalancing act of world is making a big mess. To improve all, the global policy makers need to follow a national policy, which may dampen the effect of all this. Otherwise gone are the days when US enjoyed the leading role in the world economy.

Though China is great for demand & India a big market for investors along with the world factory Middle East may play a big role for the time being but the scarcity of resources may invoke revolt in the countries like Africa & other part of emerging economies. But the best part is that this phase may lead to innovative world, development of the technologies and preservation of natural resources which will show us a better world or else everyone has to get ready for the world which fear all of us “World War-Next”…

It’s my own opinion………….I hope there must be a truth lies in it ………..The cost of which our generations will pay …

Posted by Pankaj Upadhyay | Report as abusive
 

Oil is closing on $150/barrel this morning. Wasn’t it in the $130′s yesterday, and just breaking the $100/barrel glass ceiling only a few weeks ago?

Simultaneously, aren’t FNMA and FHLMC with their $5.3 TRILLIONS of mortgage debt going to have to be bailed out by the U.S. government (which doesn’t have the money to bail them out, and which is already in debt to the tune of $6 TRILLIONS)? Isn’t the world in a recession, while $15 billion/month is being borrowed by the United States government to pour into an unwinnable counterinsurgency in SW Asia that sits atop an ocean of oil that cannot get produced…oil that cannot get to nonexistent refineries?

Nothing these days can be viewed in isolation, i.e., all of the preceding is intermingled with European industry…with global industry. It’s a financial and fiscal swamp!

You’ve heard of a “glut of oil”, I’m sure…well…now we’re talking about a “glut of oil profits” instead. One can also say that we’re dealing with a “glut of oil greed” as well.

What can those Saudi, Russian, American, Venezuelan, Nigerian, Mexican, Canadian et al oil producers be thinking, Mr. & Mrs. Reader?

Naturally, I’m NOT talking about the workers who work the oil fields. They work very hard for their money. Nor am I talking about the poor people who populate energy producing (and using) countries. They remain poor.

I’m addressing those who pocket oil profits. Just how much money can a rich man spend? Or better yet, just how much money can a rich man invest–and where can he invest it, i.e., in industrialized nations that can no longer “affordably run” on the oil that the rich man produces? It’s an economic cycle that is simply breaking down.

There comes a saturation point on all of this.

It reminds me of the cartoon character, Scrooge McDuck, who “swam” in his $millions and moved it around with bulldozers and cranes. That was about the only use he had for his money, there was such a glut of it.

I generally don’t borrow biblical stuff. However, isn’t there an adage that goes something like this, “…I tell you the truth, it is hard for a rich man to enter the kingdom of heaven. Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God?”

Therefore, I find it baffling that the privileged classes and super privileged classes UNNECESSARILY wallow in profits from $150/barrel oil. I tell you this, Mr. & Mrs. Oil User, that (contrary to popular belief) these oil barons could PRODUCE more oil from existing fields and could BUILD more gasoline refineries to process existing oil supplies–if they wanted to.

Is what they do logical? Does what they do benefit the tiny blue planet that we all reside on…that we all are clinging to as it hurdles through the universe? No, of course not. However, GREED (like LUST) is not logical. Greed blinds human beings to the reality that is swirling all around them.

OK Jack

 

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