Romania has vast energy resources but the state does not allow their exploitation, says Cristian Popa, member of the Board of Directors of the National Bank of Romania (BNR), in the article “In defense of markets”.
He considers it ironic and sad that, on the one hand, the price of gas has exploded, but on the other hand, the state does not create the legal and fiscal framework for the exploitation of offshore gas in the Black Sea.
“Another situation, this time specific to our country, is that although we have vast energy resources in Romania, the State does not allow their exploitation. It is ironic and sad that on the one hand the price of gas has exploded, but on the other hand the State does not create the legal and fiscal framework for the exploitation of offshore gas in the Black Sea, so it does not allow private companies to exploit these gas, but at the same time, the state willingly offers to cap prices, or subsidize them, with money from taxes collected…also from us, and we are left wondering why prices are rising.
Can we afford to leave these billions of euros of untapped mineral resources under the Black Sea? Is Romania so rich as to import gas rather than exploit its own? In winter, when it will be cold, or when the bills will come, we will probably think longingly about that gas,” says Cristian Popa.
Regarding gas and electricity prices, Popa mentions that they have exploded in Europe, and not only, amid high demand due to the return of consumption and reduced supply.
“The solution proposed by the etatists is to cap prices by law, so ‘let the state solve it’, as if more gas and more electricity will come out of nowhere. But the laws of the economy work independently of the laws given in Parliament.
Capped prices affect investing in production capacity, not the other way around, so it would not solve the basic problem, it would be a sedative that would not cure the disease. What statists do not tell us is that, although we look to the state for solutions, it is very possible that the state itself generated the problems in the first phase. The closure of the mines and coal-fired power plants did not contribute to the current energy price crisis? Reducing pollution and greening the energy system is probably necessary, but something needs to be replaced with something else, only elimination leads to shortages, the elimination of an energy source must be accompanied by the development of new ones, and this also using competitive market mechanisms, because otherwise unintended consequences are reached, such as power outages or huge prices,” says Cristian Popa, according to Agerpres.