EU Members Should Clean Their Own Energy Mirror
In recent weeks we have heard countless headlines about Russia's move on Crimea. Now questions loom over whether Moldova could be Vladimir Putin's next "takeover" target and who else may be on the Russian President's hit list. The moves by the ex-KGB strongman are concerning, curious, and most surprising for sure, and that should intensify the need for energy independence across the European Union (EU). This idea gains further importance on the heels of Russia's energy giant Gazprom threatening to end discounted gas contracts and play the role of energy loan shark by collecting billions of dollars already owed for its fuel.
Let's face it: Many EU members have to import a substantial amount of foreign energy sources, especially Russian natural gas. Sure, there are a few exceptions, such as France, which has retained its nuclear presence post-Fukushima and uses it to power its country by over 80%. Yes, Germany has moved to embrace Energiewende (energy transformation), but it oddly gets nuclear from France. There are also mounting concerns regarding German subsidies amid huge spikes in electricity costs which rank as some of the most expensive in Europe.
This leads me to further suggest that European energy giants E.ON , a company with a relatively new software relationship with General Electric , and RWE could be served well to at least consider merging, especially after RWE's 2015 program to cut costs and boost earnings.
Keep in mind that the German Supreme Administrative Court ruled that Germany's move to cut nuclear power post-Fukushima was unlawful. That opens both E.ON and RWE to sue for losses related to forced nuclear shutdowns in the aftermath of the tragic Fukushima accident. However, the bigger prize for both companies would be word of a reversal by the German government reconsidering its move away from nuclear power, especially if tensions with Russia and the Western world further escalate.
I've publicly questioned (and still do, actually) Germany's abrupt move to abandon nuclear power after Fukushima. Now countries such as Germany and Italy, another Euro nation that let emotion get in the way of new opportunities to tap next-generation nuclear power, struggle to figure out how to embrace renewable energy without massive subsidies and surging electricity prices. The time is now for EU members to look in their energy mirrors and reconsider nuclear power. They need to find ways to make clean energy play a bigger role in any strategy to secure domestic energy supplies and drastically reduce reliance on energy imports, namely Russia's natural gas, coal, and crude oil.
While the EU looks to the U.S. for potential military strength, it seems increasingly possible that our newly created natural gas bounty could further accelerate the conversation here at home regarding more transparent policies for U.S. liquefied natural gas (LNG) exports. This means that geopolitical moves by Russia can influence domestic energy policy as well. This makes LNG engineering companies like Fluor and KBR names to watch as the global restructuring of energy policy gets drastically fine tuned.
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The article EU Members Should Clean Their Own Energy Mirror originally appeared on Fool.com.John Licata has no position in any stocks mentioned. The Motley Fool owns shares of Fluor and General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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