The global energy market is in danger of further prices cut which could lead to more energy sector job losses. This comes as the result of continued growth in China and US shale oil and gas companies, despite the current global economic slowdown. The International Energy Agency expects that prices will continue to rise in the coming years, with some countries like France and Portugal having already announced price rises. The price rise comes as China increases its demand for oil and gas. Its demand for other energy sources is also set to grow as it looks to become a major world power.
The price cuts are however set to continue as the US administration has yet to announce any increase in its plan to cut back on the carbon emissions that cause global warming. It was reported that the Obama administration's policy will reduce greenhouse gas emissions by 16 percent below 2021 levels by the end of this year. However it is unclear whether this policy will be enough to curb prices or whether the global energy prices will rise again. The European Commission has also announced that it will look into some of the proposals put forward by the US and provide a report by the end of this month on how to deal with the issue.
The European Commission has also said that its proposal on cutbacks would not affect countries that do not emit above the acceptable limit. According to the Commission proposal, non emits would have to pay more in order to be included in the national heating capacity list. Many of the member states of the EU have been critical of the Commission's actions and have called for a more rigorous evaluation of the proposal. They believe that the new regulation is not powerful enough to address the problem of climate change and are looking forward to the introduction of a legally binding accord.
There is also a possibility that the prices will stay steady for the time being. This can be good news for the gas and coal industries because it may allow them time to adjust their prices accordingly. This is especially true for those who have been affected by the recent hike in prices. It will take some time before they recover from the current situation. Some companies such as E.ON have already indicated that they are not expecting a gas price cut for the foreseeable future. Royal Dutch, one of the biggest oil refineries, has also said that it expects prices to remain high for the next few years.
In the meantime, consumers can take some comfort from the fact that the cutbacks are aimed at reducing the carbon emissions. As long as there is no increase in greenhouse gas emissions, the reduction in prices should have little effect on consumers. There will be certain price hikes that will occur as a result of the carbon cuts though. This means that the prices will be adjusted to accommodate for the increased cost. However, these price increases should be manageable and should not be too much for the consumers to bear. For this reason, the European Union may find itself in an unstable position.
For now, it is a matter of waiting and see. If consumers are happy with the price cuts they will be pleased with the Commission's actions. However, if gas prices go up, consumers may not be quite so happy. It will be interesting to see how this story plays out over the coming months.