With Gas Prices Already High, Europe Is Less Rattled by Jump

Article excerpt

Mark Landler

FRANKFURT, May 31--Alexandra Krauter paid little attention as the digits on the gasoline pump flashed upward. Ms. Krauter, a 29-year-old woman who works in a Frankfurt restaurant, was not even sure how much she was paying (1.15 euros a liter, or the equivalent of $5.31 a gallon). "I don't think the price is appropriate, but I don't care that much about gas prices," said Ms. Krauter, as she waited restlessly beside her pint-size Fiat. "I've got other things to worry about." Few Europeans are as nonchalant about the high cost of fuel as Ms. Krauter. But her attitude gets at a basic difference in the way Europeans and Americans view the current spike in the price of oil. "While the arrival of $2-a-gallon gasoline has rattled many Americans--reviving memories of the oil shocks of the 1970s--Europeans have reacted with relative equanimity. Gas is so heavily taxed in most European countries that a jump in the market price is less noticeable here. And the recent strength of the euro versus the dollar has insulated consumers. Moreover, Europe, after three decades of seeking alternatives to oil, is somewhat less vulnerable to the effects of higher crude prices. Oil and natural gas still lubricate Europe's economy, to be sure, and industrial countries like Germany remain among the world's largest importers. But for a variety of reasons--ranging from smaller cars and shorter commutes to the windmills that dot the countryside from Denmark to Spain--Europe does not view s40-a-barrel oil with the same alarm. Indeed, some here see it as a chance to redouble Europe's campaign to wean itself from fossil fuels. "We talked about high oil prices in the past, but it was hypothetical," said Peter Ahmels, the president of Germany's Federal Association on Wind Energy.

"Now people are asking, 'Could the oil supply run out?'" In 2000, a rise in the price of fuel was compounded by higher taxes, which ignited protests and blockades by truckers from Britain to Germany. This time, officials here hope, the high prices will rekindle an appreciation for windmills, solar panels and other alternative energy sources. Germany is the world's largest producer of wind energy; with 15,800 turbines generating 15,000 megawatts of electricity, or 6 percent of its total supply. But parts of the country; notably Bavaria, have been loath to build windmills because of complaints that they blight the landscape. Now, with higher oil prices, those objections may lose some force. "It's one very strong point for us," Mr. Ahmels said. With a renewed commitment, he said he thinks Germany could nearly double its wind generation capacity by 2010. And the development of offshore windmill farms could eventually enable wind to account for 15 percent of Germany's electricity supply; despite the country's relatively meager coastline. Solar energy is also growing, with the production of solar cells almost doubling last year. The German solar power industry, which is subsidized by the government, will generate more than 1 billion euros ($1.2 billion)in revenue in 2004, according to an industry group. Europe's push for renewable energy began as a response to the 1970's oil shock, which was as traumatic here as in the United States. Over the years, however, the campaign for clean energy has been driven less by fears of dwindling oil than a desire to protect the environment. In Germany, the Green Party, far from being a lobbying group on the sidelines, is

part of the government. Germans accept, as environmental imperative, things that Americans would find bizarre--like sorting household garbage into four separate bins for recycling, or paying 70 cents of every euro at the pump in the form of taxes, to drive down fuel consumption. "It is a Green position to force an energy policy which reduces our dependency on oil," said Rezzo Schlauch, a Green Party member who is state secretary, in the ministry of economics and labor. Mr. Schlauch said that high oil prices are helpful insofar as they give new impetus to such policies. …