EU Members Should Clean Their Own Energy Mirror

With Russia threatening to further raise energy prices and withhold supplies, Europe must focus on becoming self-sustaining when it comes to energy.

Apr 4, 2014 at 9:24AM

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 (NASDAQOTH:EONGY), a company with a relatively new software relationship with General Electric (NYSE:GE), and RWE (NASDAQOTH:RWEOY) 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 (NYSE:FLR) and KBR (NYSE:KBR) names to watch as the global restructuring of energy policy gets drastically fine tuned.

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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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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