The scale of Europe’s industrial nightmare is mind-boggling


It’s hard for us in the USA to imagine what it’s like for industries in Europe right now, with the supply of natural gas from Russia cut off and few alternative sources available.  The Wall Street Journal reports:

Europe’s energy crisis has left few businesses untouched, from steel and aluminum to cars, glass, ceramics, sugar and toilet-paper makers. Some industries, such as the energy-intensive metals sector, are shutting factories that analysts and executives say might never reopen, imperiling thousands of jobs.

The question is whether the current pain is temporary, or marks the start of a new era of deindustrialization in Europe.

. . .

In the city of Žiar nad Hronom, Slovakia, built around a 70-year-old aluminum factory that supplies car-part makers across the continent, some fear for their financial future. “This is probably the end of metal production in Europe,” said Milan Veselý, who has worked at Slovalco, majority owned by Norway’s Norsk Hydro ASA, all his adult life, following in his parents’ footsteps.

Slovalco is among the companies hit by volatility in electricity prices across Europe caused by low Russian supplies of power-generating gas. For years the factory was by far the biggest buyer of power in Slovakia, consuming 9% of the country’s electricity, most of it from nuclear energy. Before energy prices started rising last year, Slovalco paid about €45 (about $45) for each megawatt-hour of power. In 2022 so far it has paid €75, in a deal locked in last year. In late August, prices hit €1,000 across Europe.

Slovalco didn’t renew its power contract for 2023, which would have cost €2.5 billion euros at the recent peak in power markets. Mr. Veselý, the plant’s manager, is winding down primary-metals production, leaving a small recycling operation. He is also dismissing 300 of 450 workers. “The volatility of the price of electricity these days—it’s crazy,” he said. “This is the way we are actually killing industry.”

. . .

The factory closures come at a ruinous cost. Companies in energy-intensive industries say they face going bust this winter without government support. Complex supply chains in sectors such as the auto and food industries are getting gummed up, adding to inflationary pressures just as pandemic snarl-ups show signs of easing.

Norwegian fertilizer giant Yara International ASA, which uses gas as an ingredient, has cut crop-boosting ammonia production by 65% across its European factories.

. . .

Metals producers, which require significant power to break down and form chemical bonds, are at the front of the crisis. Electricity prices have more than doubled this year, propelled by high gas prices, trouble in France’s nuclear fleet of power plants and low hydropower generation.

ArcelorMittal SA, one of the world’s largest steelmakers, will close a blast furnace in Bremen and a so-called direct reduction plant in Hamburg that produces sponge iron, used to create crude steel. In Germany, ArcelorMittal had already reduced gas demand by about 40%, compared with what it planned to consume at the start of the year.

“We have never had such upheavals in the energy prices,” said Reiner Blaschek, chief executive of the company’s German business. “Everything that is associated with enormous volatility in the short term is for us as a commercial enterprise, to put it mildly, pure poison.”

“You have to reinvent the whole energy supply chain on the go,” Mr. Blaschek added.

. . .

Zinc stockpiles have almost run out in the EU, leading customers to import metal from China, according to metals industry lobby group Eurométaux. Analysts say European output of primary aluminum is dying out, leaving the continent with recycling operations that produce metal suitable for industries such as packaging, but not for wheel hubs, brakes or parts for airplanes.

Aluminum smelters are finding themselves not able to renew their power contracts. Companies need 15 megawatt-hours of power to produce a metric ton of primary aluminum, costing €9,000 at recent electricity prices, while a metric ton can be sold for less than €2,500, according to Germany’s metal association, WV Metalle.

“We need immediate emergency aid now, otherwise we are threatened with deindustrialization in Germany,” said Franziska Erdle, WV Metalle’s general manager.

. . .

Some factories, such as zinc manufacturers, can restart quickly when the economics add up again. For others, including glass and aluminum makers, reopening is a lengthy and expensive process that may never make financial sense.

There’s much more at the link.  Scary, but highly recommended reading.

Imagine how our economy would look if US industries in the same areas were similarly affected.  We’d be looking at hundreds of thousands of workers laid off, an impossible burden for unemployment insurance and/or welfare to cover;  and given the Biden administration’s emphasis on the “Green New Deal“, it’s unlikely aid would be forthcoming for those “old-fashioned” industries to restart production in due course.  To them, the deindustrialization of America would be a feature, not a bug.  That’s absolutely crazy, of course, but then . . . that’s what you get with moonbats in power.

We – and by “we” I mean you and I, the people who will be most affected by this – we need to start working out how this will impact our own lives.  Read through the WSJ article and consider how each negative will affect the average consumer.  A few examples:

  • Some factories may never reopen – could that affect our jobs?  Our communities?  What’s a town to do when its major (possibly only) employer closes?
  • Volatility of energy prices – our incomes aren’t going to fluctuate in step with them.  How will we afford massive increases in our energy costs?
  • Government support for companies – this isn’t only on a federal level.  States and cities might offer financial aid to local industries to keep them afloat.  If they do, the taxpayers will pay for it – meaning, you and I.  It may not be in the form of cash;  instead, a town may offer rebates on rates for a period.  However, that town still has to provide basic municipal services.  If a company isn’t paying rates, it’ll have to raise them on everybody else – again, meaning you and I.
  • Reinventing the energy supply chain?  When the federal government is blocking new hydrocarbon energy projects, and restricting existing ones?  When it wants to encourage the use of electric vehicles, but does nothing to subsidize or encourage new power stations to recharge them – and, even if it did, those power stations would take up to a decade to come online?
  • Reopening factories may never make financial sense.  What does that do to everybody and every institution that has depended on those factories?
You see, this isn’t a remote crisis;  and just because it’s in Europe doesn’t mean we won’t encounter it ourselves.  This is a globalized world, where the “butterfly effect” is well and truly active in economic terms.

Food for thought – and as much pre-emptive planning and emergency preparation as we can afford.



  1. Between this and your previous post "True Dat", my concern for world events this winter have only increased. The people of Europe are scared, especially the former Soviet block countries that know what life under Moscow is like. They are desperate to increase their military capabilities as fast as possible to resist Russian aggression. They are in for a cold winter, and if a large portion of their comfortably middle class workers suddenly find themselves without a job and facing massive energy and food price increases, I fear another great war is inevitable. There will come a point where the hunger and cold are too great to bear, and they will demand relief.

    The closing of the major commodity factories will cascade into the closing of finished goods factories. As the WSJ article states, even the power companies will start suffering if they have no one to sell power to. If there is no commerce, there are no taxes. That's when the SHTF, because the government pukes that caused this crisis will begin to suffer. They will demand Russia turn on the gas supplies, and what will they do when Russia refuses?

    May God have mercy on us.

  2. It's been a series of deliberate choices in Europe (and some states here as well) to increase the cost of energy by not shutting down plants, not replacing them and instead going after a greenie agenda.

    They've put themselves in a perilous spot by deciding not to have secure and affordable energy supplies and being reliant on cheap natural gas from Russia.

    It's not too late for them to turn it around, reopen shuttered power plants, and commit to building more, but it is getting close and there's going to be a lot of disruption until they get new secure power generation on line.

  3. I would expect that nothing less than piles of dead politicians and bureaucrats will change the situation. I'm not holding my breath…

  4. Europe has approximately 79 billion tonnes of proven coal reserves. If only they were good for something, anything.

    (US reserves are 472 billion tons)

  5. There is plenty of gas outside Russia.

    That gas can and will be turned back on when the majority realise that feeding your children NOW is more urgent than panicking about what “might” happen to your great-great grand-children in 100-150-200 years. If that happens, then you may be surprised at how quickly industry rebuilds. This is the same Europe that was bombed to rubble in the 1940s and rebuilt to a high level of prosperity within decades.

    Britain is sitting over a “lake” of natural gas. The new Prime Minister has announced that they WILL be using it, possibly starting within the next six months.
    When the French decided to go nuclear, they built something lije 15 power-plants in 7 years.
    When the will is there, things can happen a lot quicker than we are accustomed to seeing in this woke, over-regulated society.

  6. The time for the US to start new nuclear is now.
    Vogtle 3 is getting close to Initial Fuel Load for StartUp Testing.
    Vogtle 4 is 1-2 years behind.
    Vogtle 1 took from 1976 to 1987 to produce power.
    11 years.
    Vogtle 2 took from 1976 to 1989.
    13 years.
    The nuclear construction work force is going to move on to other jobs.
    It's a perishable mindset.
    A lot here still don't have (or want) it.
    Building a nuclear plant is NOT like building a WalMart, but that was the skill level of a huge percentage of the construction work force.
    Vogtle 1 (1200 MW) took from 1976 to 1987.
    Vogtle 2 (1200 MW) took from 1976 to 1989.
    Vogtle 3 & 4 started construction in August 2009.
    Vogtle 3 will be online in 2023.
    14 years.
    Vogtle within another 1-2 years.
    That'll be (1200 x 2) + (1000 x 2) =
    4.4 GW from the site.
    I've been in nuclear since 1980 and it still amazes me to look over at 1 & 2 and other than water vapor from the cooling towers, you'd have no idea 2.4 GW is pumping onto the grid.

  7. I'm correcting myself, after getting to work I verified the net output of Vogtle 3 & 4 are not 1000 MW each, they are rated at 1117 MW each.
    Although that is finally determined after startup.

    Vogtle 1 @ 1150 MW
    Vogtle 2 @ 1152 MW
    Vogtle 3 @ 1117 MW (tbd)
    Vogtle 4 @ 1117 MW (tbd)

    Site total will be 4.536 GW.

    My bad, I like to be accurate.

  8. Yeah, “Russian aggression”. Do you read history? Even recent history? Things have been happening for longer than the last 15 minutes. Go back to as recent as 2014 Sparky. Oh, and look at a progressive NATO map too. It will ‘splain a few things if you’d look.

  9. Paddy: Most people in what's now being called "the collective west" (EU/Anglosphere/Japan) only know what the Enemedia tells them. The governments of the collective west and their Big Tech allies have installed censorship so complete that Joseph Goebbels would be proud.

    There are ways around it. I suggest that if you want a very clear picture of what is truly going on in the world go over to Rumble and do a search for "The Duran" and go from there. The New Atlas on YouTube is a great resource, so is Jackson Hinkle. Jackson was on Tucker Carlson's show last week.

    Telegram is an almost indispensable resource for news, too. I hate to break it to TWITter but most people in eastern Europe and Asia use Telegram. You can find news from both sides of the conflict in real time along with world news. I follow a couple of Russian and Ukrainian/NATO channels. I will warn you that some of the reports are from the front lines and some of the photos are graphic

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