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Unprecedented power outages in North China Leaving millions without electricityAfter the ventilator was powered off during the power outage, the factory shut down and sent the workers to the hospital due to carbon monoxide poisoning.
“Sorry, not available” sign has become Can be seen everywhere at the gas station In many parts of the UK this week, energy companies went bankrupt due to soaring natural gas prices.
Energy prices across Europe are also breaking records. At the same time, even before the northern hemisphere enters winter and heating demand soars, US natural gas and coal producers are struggling to keep up with demand.
So, what is behind the global energy crunch? How much worse will it get?
This is what you need to know.
First of all, how did we get here? Is the coronavirus pandemic the culprit?
Part of the reason is that although analysts said the reasons behind the energy shortage are many, many of them predate the COVID-19 crisis.
It is true that the demand for energy from consumers and factories has picked up after the plunge in the first few months of the pandemic, leading to bottlenecks in the supply chain and pain points in the production chain.
But why use fossil fuels? I think green energy is the future?
In the past 5 to 10 years, as part of the global effort to combat climate change, many investors have turned to more renewable energy sources.
But the reality is that most parts of the world still rely on traditional energy sources such as oil, coal, and natural gas—especially when renewable energy sources begin to operate.
Analysts say that, as they have done, this has led to underinvestment in fossil fuels, which has led to current problems.
Jeff Currie, Global Head of Commodities Research at Goldman Sachs, said: “Natural gas, coal, oil, metals, mining-your choice-the old economy is clearly underinvested,” Explained in an interview with Bloomberg TV Tuesday. “We call it revenge on the old economy. Poor returns have caused capital to shift from the old economy to the new economy.”
Does this mean that we will see more investment in polluting fossil fuels?
It’s not clear, but the Secretary-General of the Organization of Petroleum Exporting Countries (OPEC) warned that it would be “wrong” to stop new investment in fossil fuel production, because even with the promotion of green energy development, oil demand is expected to remain in the next few years rising.
Oil price is Currently hovering around $80 per barrel, A three-year high.
What about coal and natural gas?
The shortage of coal, natural gas and water supply has caused European energy prices to soar. And China is scrambling to obtain enough coal, thereby pushing up the price of the world’s dirtiest fossil fuel.
According to a report, China uses more coal than the rest of the world combined guide An article on China’s climate policy produced by the SIPA Center for Global Energy Policy at Columbia University. It is also the world’s leading coal producer, but supply constraints have forced it to restrict electricity supply and limit factory output.
Oops. What are the reasons for China’s energy tightening?
Several factors are at play. Electricity prices are regulated in China, so even if coal prices are at record levels, companies cannot pass on the additional costs to consumers or factories. This means that some power companies are losing money-and hesitant to increase production to meet current demand.
According to Bloomberg News, China’s National Development and Reform Commission announced on Wednesday that it would allow companies to increase prices to “reasonably reflect changes in demand, supply and costs,” but it is not clear how high these prices will be allowed to increase.
People familiar with the matter told Bloomberg News that the Chinese government is said to be considering increasing the electricity prices of factories.
So, is higher price a good thing?
No surprises—for energy producers and companies, yes. For consumers, absolutely not.
Take the current gasoline crisis in the UK as an example. According to data from RAC, an automobile service company that tracks gasoline prices across the country, as of Tuesday, the average price of a liter of unleaded gasoline was 136.50 pounds ($1.83), and the average price of a liter of diesel was 138.78 pounds ($1.86).
On Wednesday, a gas station in Northwich, UK had a sign informing customers that there was no fuel [File: Jason Cairnduff/Reuters]These prices are not far from the record level set in April 2012, when the average price of a liter of unleaded gasoline was 142.48 pence ($1.91) and the price of diesel reached a record high of 147.93 pence ($1.99).
High prices are not the only problem.According to the Gasoline Retailers Association, motorists have also been lining up to refuel tanks and tanks, causing 90% of gasoline pumps to dry up Warning earlier this weekAnalysts say this panic buying is making the crisis worse-but Brexit is also to blame.
What does Brexit have to do with it?
One of the reasons fuel is not delivered from storage facilities to gas stations is the lack of truck drivers. When Britain officially left the European Union, it tightened immigration rules so that EU citizens could no longer work visa-free in the UK.
Many truck drivers in the country come from other European countries, and labor shortages now leave companies without the transporters needed to transport fuel and various other commodities.
Kpler’s chief analyst Kevin Wright told Al Jazeera: “There is no doubt that some driver shortages are caused by Brexit and the pandemic.” “Especially drivers from Eastern Europe have left in the past two years. Britain…The British government has made it more difficult for drivers from outside the UK to find employment here.”
Retailers, manufacturers and food suppliers in the UK report that the shortage of truck drivers related to the pandemic and the UK’s withdrawal from the European Union have made it more difficult for many Europeans to work in the UK [File: Frank Augstein/AP Photo]What measures does the British government have to deal with?
British Prime Minister Boris Johnson stated that he will issue temporary visas for up to 10,000 foreign truck drivers, but this will not solve the crisis-the country currently lacks about 100,000 drivers, and it takes time to train domestic drivers. Temporary foreign visas also expire on Christmas Eve this year, Make it a very short-term job.
At the same time, the British government has Soldiers on standby Drive the truck.
Can’t oil and gas producers like the United States simply increase production?
This winter, the United States is likely to face a shortage of natural gas. This is partly due to the lack of investment during the pandemic and the continuing labor shortage in the United States, making it more difficult for the oil industry to recruit workers.
In a report released by the Federal Reserve Bank of Dallas on Wednesday, 51% of the executives of oil and gas support services companies surveyed said they had difficulty recruiting employees. 70% said that the lack of qualified job applicants is the culprit, while 39% said that workers are seeking higher salaries than they can provide.
Wow. So what will happen next?
This remains to be seen. For example, in China, the current demand for coal-fired power generation continues to conflict with the emission reduction plan formulated by the Chinese government. Achieve the ambitious goal of carbon neutrality By 2060.
Pushing—between meeting energy needs now and investing in renewable energy that will help the planet in the long-term—is an important part of the current global crisis.
No matter where you are, high energy prices are the only way for disgruntled citizens-so expect the government to take action within its own framework to relieve the pressure in any way possible.
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