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Austrian Steelmaker’s Texas Plant Highlights Value of U.S. Fracking and Property Rights

bigstock-steel-mill_featureWolfgang Eder, CEO of Austria’s largest steelmaker, Voestalpine, has called for more fracking in Europe, saying, “Each drill hole that we can open in Europe will allow us to decrease our dependence (on natural gas from Russia).”

Partly to take advantage of less expensive energy available in the United States, Voestalpine has announced plans to invest $761 million to build a sponge iron plant in Texas, Reuters reports.

Unfortunately, fracking is unlikely to expand in Europe, because EU nations do not recognize the right to private ownership of subsurface oil and gas. Thus, whereas in the United States owners of resources have a strong incentive to contract with frackers—development of Eagle Ford shale in Texas generated some $2.4 billion in leases in 2010 alone—European politicians and bureaucrats, who control the resources in question there, have little to no incentive (and likely negative incentive) to enable fracking.

If Eder and other European producers wish to have access to cheaper energy, they must do more than beg for more fracking—they must demand that government begin to recognize private property rights in subsurface resources.


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