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Europe Turned an Energy Crisis Into a Green Energy Sprint

February 25, 2023

This was supposed to be a winter of energy crisis in Europe. Beginning last spring, not long after the Russian invasion of Ukraine, the fear of gas shortages spread across the continent, along with fears of what might follow. The coming winter crunch was compared to wartime, with energy experts less focused on whether it would bring rationing than how much. Others suggested that spectacular price spikes would mean suspensions of energy markets and that the continent as a whole would experience not a “cost of living crisis” but a crisis of “molecules” — in which there wasn’t enough energy to be had, no matter the price. A recession was simply taken for granted among the commentariat — almost like a badge of honor demonstrating the moral valor of standing up to Vladimir Putin.

Europe as a whole has indeed endured a lot through the cold months: dramatic spikes in energy prices, with wholesale prices for electricity and gas growing as much as 15-fold, often accompanied by similar spikes in government relief. Countries from Germany to Denmark and Italy spent more than 5 percent of G.D.P. to shield citizens from the crunch, enacting public conservation measures that darkened city streets and limited power use in other ways. In Britain, average bills were expected to grow by 80 percent before the government artificially lowered the average annual household energy bill to about $3,000. Across the continent, people turned their thermostats down and snuggled with hot water bottles at night. Industry was dialed back in places but also often found alternative power supplies.

All told, though, the worst has not come to pass. There were no blackouts, as experts were warning as recently as December…

…click on the above link to read the rest…

What’s Behind California’s Skyrocketing Natural Gas Bills: Insiders

January 21, 2023

What’s Behind California’s Skyrocketing Natural Gas Bills: Insiders

Natural gas is transferred into the SoCalGas system after being collected and purified at a Calgren collection facility in Pixley, Calif., on Oct. 2, 2019. (Mike Blake/Reuters)

Californians are expecting skyrocketing natural gas bills this month, but this can’t all be blamed on the weather, according to industry insiders.

Southern California Gas Company (SoCalGas), which serves about 5.9 million households and businesses, warned customers to expect “shockingly high” January bills that could be 128 percent higher compared to December.

Those who typically paid around $65 a month last winter are likely to pay about $160 this year, SoCalGas said in a statement Dec. 29. Those with bills around $130 a month could see charges jump to $315.

Last December, wholesale natural gas prices already cost five times more than that of 2021. The utility also paid unprecedented prices for the supply in January, the company reported.

Natural gas prices rose in 2022 for five reasons, according to a biennial report (pdf) published by California Gas and Electric Utilities, a group of utility providers including SoCalGas, San Diego Gas & Electric, and SoCal Edison.

First, North American inventories fell below the five-year average last year. Second, the national supply was also strained by Europe’s steady demand for American natural gas during the Ukraine conflict.

Third, the Biden administration restricted licensing and drilling in the country for fossil fuels, and investment for such production has lagged behind the rapidly growing demand for natural gas over the past year, according to the report.

Lastly, the growing electric power sectors nationwide also consume natural gas, the company reported.

“From an economic standpoint [reducing reliance on fossil fuels] may be costly and is certainly not expected to be rapid or easy,” the utility reported. “Nonetheless, the push to find ways forward and to provide energy solutions to customers in a clean and affordable way is an imperative.”

Climate Goals Restrict Production, Grow Demand

…click on the above link to read the rest…

Germany Unleashed Half-Trillion Dollar ‘Energy Bazooka’ To Keep Lights On

December 16, 2022

Germany Unleashed Half-Trillion Dollar ‘Energy Bazooka’ To Keep Lights On

Western sanctions on Moscow have backfired, failed to paralyze Russia’s economy, and ultimately sparked financial pain for ordinary Europeans and the largest economy in the block.

According to Reuters calculations, Germany has hemorrhaged cash to the tune of 440 billion euros ($465 billion) in energy bailouts and schemes, as well as keeping energy supplies flowing while it lost access to inexpensive natural gas from its leading supplier Russia in 2022.

“How severe this crisis will be and how long it will last greatly depends on how the energy crisis will develop,” said Michael Groemling at the German Economic Institute (IW). He added: “The national economy as a whole is facing a huge loss of wealth.”

Reuters said the “cumulative scale” of energy bailouts and other schemes employed by Berlin equates to 1.5 billion euros per day since Russia invaded Ukraine, or about 12% of national economic output, or 5,400 euros for each German.

Germany has shown Europe how backfiring sanctions ruin its country’s finances and send millions of its citizens crashing into energy poverty overnight. These anti-Russian measures have caused soaring electricity and NatGas prices and elevated risks of entering a recession in 2023.

“The German economy is now in a very critical phase because the future of energy supply is more uncertain than ever.

“Where does the German economy stand? If we look at price inflation, it has a high fever,” said Stefan Kooths, vice president and research director of business cycles and growth at the Kiel Institute for the World Economy.

Many other European countries find themselves at the mercy of the weather as NatGas injections into EU storage facilities have flipped to draws amid a wicked cold spell boosting heating demand.

“The country has turned to the pricier spot, or cash, energy market to replace some of the lost Russian supplies, helping drive inflation into double-digits,” Reuters noted.

…click on the above link to read the rest…

The Diesel Crunch Is Finally Causing Demand Destruction

November 26, 2022

The Diesel Crunch Is Finally Causing Demand Destruction

Diesel inventories slumped to their lowest level for the time of the year since 1951.
signs have emerged that weaker demand in the past weeks may have slowly started to rebuild diesel inventories.
Refiners are processing more crude oil to capture the still high refining margins.

High prices seem to have started to weigh on diesel demand in the United States, where distillate inventories – comprising diesel and heating oil – have been slowly rising over the past few weeks. American distillate inventories are still below the five-year average, but the gap in stocks compared to previous years has slowly started to narrow, suggesting that high prices are hitting demand, while encouraging more refinery output thanks to solid refining margins.

In this week’s inventory report, the U.S. Energy Information Administration said that distillate stocks rose by 1.7 million barrels in the week to November 18, with production rising to an average of 5.1 million barrels per day (bpd). Distillate fuel inventories are still about 13% below the five-year average for this time of year, but two months ago, they were more than 20% below the five-year average for that time of the year.

Earlier this autumn, U.S. distillate stocks slumped to their lowest level for this time of the year since 1951, just as the heating season started and a few months ahead of the EU embargo on Russian oil product imports, which goes into effect in February.

Now signs have emerged that weaker demand in the past weeks may have slowly started to rebuild diesel inventories, contrary to seasonal trends. Distillate inventories in the U.S. rose by 3 million barrels in the six weeks to November 18, according to estimates by Reuters’ senior market analyst John Kemp based on EIA data.

…click on the above link to read the rest…

How Europe’s Energy Crisis Could Turn Into A Food Crisis

November 22, 2022

How Europe’s Energy Crisis Could Turn Into A Food Crisis

Runaway energy inflation has taken a toll on European industry, but another threat is looming.

Europe’s two biggest fertilizer suppliers, Russia and Belarus have retaliated against European sanctions by cutting off fertilizer exports.
The fact remains that the global food chain, especially its European links, is not in a good place right now.

Runaway energy price inflation has wreaked havoc on European industrial activity, with the heaviest consumers taking the brunt. Aluminum and steel smelters are shutting down because of energy costs. Chemical producers are moving to the United States. BASF is planning a permanent downsizing.

There is, however, a bigger problem than all these would constitute for their respective industries. Fertilizer makers are also shutting down their plants. And fertilizer imports are down because the biggest suppliers of fertilizers for Europe were Russia and Belarus, both currently under sanctions.

Both countries have retaliated against the sanctions by cutting off exports of fertilizers to Europe, and European officials repeating that fertilizer exports are not sanctioned is not really helping.

Russia accounts for 45 percent of the global ammonia nitrate supply, according to figures from the Institute for Agriculture and Trade Policy cited by the FT. But it also accounts for 18 percent of the supply of potash—potassium-containing salts that are one of the main gradients of fertilizers—and 14 percent of phosphate exports.

Belarus is a major exporter of fertilizers, too, especially potash. But Belarus has been under EU sanctions since 2021 on human rights allegations, and unlike Russia, it has seen its fertilizer industry targeted by these sanctions. This has made for an unfortunate coincidence for Europe and its food security.

…click on the above link to read the rest…

Energy Bills In Europe Are 90% Higher Than Last Year

November 10, 2022

Energy Bills In Europe Are 90% Higher Than Last Year

Electricity and gas prices are soaring across Europe, with bills close to double from last year in most European capitals, according to new data from the Household Energy Price Index—a monthly tracker of energy prices for households across 33 European capitals, including the 27 EU member states and several non-members.

According to the data collected for the HEPI, natural gas bills in Europe have gone up by as much as 111 percent over the past year, with electricity prices up by an average of 69 percent. Taken together, Euronews calculates these two make for a total 90-percent increase in household energy bills over the past year.

“Significantly higher [energy prices] compared to one year ago … can be attributed to a combination of factors, such as increased demand connected to post-pandemic economic recovery and extraordinary weather conditions, the record-high prices for natural gas, and high CO2 emissions allowances,” the authors of the latest HEPI report noted.

The high energy bills are creating headaches for European governments: strikes and protests are multiplying and disgruntlement with energy policies is growing. The cost of living in most of Europe is already exorbitant because of the energy crisis and this crisis is only going to get worse after the EU embargoes on Russian oil and then fuels come into effect.

In some parts of Europe, according to the latest HEPI report, energy prices have reached record highs but in others, prices have actually fallen, at least in October. The news is not as good as it looks at first glance: the decline was a result of government intervention, i.e. energy subsidies.

There have been a lot of subsidies as European governments try to alleviate the financial pain on households and businesses to avoid further disgruntlement. Germany alone will be spending some $200 billion on such coping measures, including a cap on energy prices up to a certain level of consumption.

Since when did banks produce energy?

October 14, 2022

Since when did banks produce energy?

It takes a special kind of cynical self-interest to make people pay twice for something they already cannot afford, while claiming you are doing them a favour. This though, is the energy price relief package announced by Liz Truss yesterday. The package plays that old political card of being not quite as bad as it might otherwise have been, while still being a lot worse than it was.

Politically, the announcement confirms a great deal of what we suspected. In recent years there has been a growing belief that the Versailles-on-Thames technocracy pulls the strings and that incoming prime ministers are simply given their script on arrival in 10 Downing Street – this is born out by an energy package – drawn up by technocrats over the last six weeks – which is wholly at odds with Truss’s policy announcements during her leadership campaign. The announcement also demonstrates that despite her third-rate tribute act, Truss is no Margaret Thatcher, nor even the economic liberal that she claims… because a true libertarian – and likely Saint Margaret herself – would have allowed the energy companies to go bust rather than ignore the inflationary impact of state intervention… so now we know.

The package itself involves capping the average energy bill at £2,500 for the next two years, rather than the immediate rise to £3,549 and the anticipated rise above £6,000 in 2023. There is also a reduction on the regressive standing charge for electricity as the various green levies are removed. A reduction in VAT is also expected in future, and the national £400 bill reduction, together with the £650 for people on low incomes remains and may be extended next year.

…click on the above link to read the rest…

German government furious as ‘friendly countries’ charge ‘astronomical prices’ for gas

October 9, 2022

German government furious as ‘friendly countries’ charge ‘astronomical prices’ for gas

Germany’s energy situation is dire, and the Nord Stream pipeline explosions have only worsened its geopolitical and economic outlook

German Economy and Climate Minister Robert Habeck waits for the arrival of the Prime Minister of the Netherlands Mark Rutte at the foyer of the chancellery in Berlin, Germany, Tuesday, Oct. 4, 2022. (AP Photo/Markus Schreiber)

Germany has become extremely reliant on liquified natural gas from the United States to keep its industrial sector and economy afloat, and since the Nord Stream gas pipeline explosions, Germany has become even more dependent.

The pipeline explosion changes the entire geopolitical position of Germany, as it cut off any hope Germany had of restarting relations with Russia and regaining access to cheap gas supplies, which have served as the bedrock of the country’s industrial sector.

Given the circumstances, Germany is growing angry over the “sky-high” gas prices it has to pay from so-called “friendly countries.”

‘Our great-grandchildren will pay for this’ – Germany’s plan to borrow €200 billion in ‘shadow’ debt to pay for gas price cap criticized by federal audit office

Germany wants to borrow €200 billion to support gas prices using a budgetary trick

Federal Minister of Economy Robert Habeck has criticized the high cost of delivering liquid gas to Germany. He says that even “friendly countries” have sometimes demanded “astronomical prices,” Habeck told the Osnabrücker Zeitung. He said there is need for further discussion in order to bring prices down.

“I think such solidarity would also be good for curbing gas prices,” emphasized the Green politician with a view to the government in Washington.

…click on the above link to read the rest of the article…

Revolution In Air As Brits Burn Power Bills Amid Historic Energy Crisis

October 3, 2022

Revolution In Air As Brits Burn Power Bills Amid Historic Energy Crisis

Energy prices for millions of households across the UK rose on Saturday. Soaring power bills amid the worst cost-of-living crisis in a generation led to a continuation of growing discontent ahead of the dark winter.

Thousands of Brits marched in London and other metro areas this weekend in protest of being thrown into energy poverty while inflation is at forty-year highs.

There were countless videos on social media showing Brits holding signs about their dire financial situation. “Can’t afford to live,” “Freeze profit, not people,” and “Eat the Tories,” read some of the signs people held.

The protest was organized by Don’t Pay UK, an anonymous group spearheading the effort to have more than one million Brits boycott paying their power bills this winter (the movement is nearly 200,000 strong).

“Millions of us simply won’t be able to keep our heads above water and many will freeze when the weather turns cold,” a spokesman for the campaign said.

The protest coincided with the new energy price cap that took effect on Saturday, increasing the power bill average per household from £1,971 to £2,500 annually. Without this government intervention, annual bills would’ve continued skyrocketing.

New Prime Minister Liz Truss said that the government’s support for households and businesses shields them from energy hyperinflation. Meanwhile, Truss’ support is already in turmoil. Labour leads the Conservatives by a stunning 33%, according to a recent YouGov poll, up from 14% when she assumed power just three weeks ago.

However, the price cap for a typical household has doubled since last year — the massive increase has sparked discontent among Brits who are crushed by a cost-of-living crisis.

The UK Misery Index is at its worst level in three decades. We noted that Half Of UK Households Will Be In Fuel-Poverty By January last week.

…click on the above link to read the rest of the article…

Hyperinflation Hits Europe

October 3, 2022

Hyperinflation Hits Europe

In Dramatic Escalation, European Nat Gas Prices Soar After Gazprom Warns Ukraine Flows At Risk

September 27, 2022

In Dramatic Escalation, European Nat Gas Prices Soar After Gazprom Warns Ukraine Flows At Risk

In a day of constant news surrounding European gas flows, including the potential sabotage of the Nord Stream pipeline, moments ago, Russia state-owned gas giant Gazprom PJSC warned that another major source of gas flows to Europe was at risk, just hours after three massive gas pipelines were hit by suspected sabotage.

As Bloomberg reports, in a dramatic escalation of the energy standoff between Russia and Europe in little over 24 hours, the Nord Stream pipeline was knocked out by what German officials said looked like sabotage. Gazprom then said that one of two remaining routes bringing gas to Europe – via Ukraine – was at risk because of a legal spat.

Specifically, as Reuters notes, Gazprom rejected all claims from Ukraine’s energy firm Naftogaz in arbitration proceedings over Russian gas transit, and had notified the arbitration court. It also said that Russia may introduce sanctions against Naftogaz in case it further pursues the arbitration case, meaning Gazprom would be prohibited by the sanctions from paying Ukraine the transit fees.

Naftogaz had initiated a new arbitration proceeding against Gazprom earlier this month, saying the Russian company did not pay for the rendered service of gas transportation through Ukraine. The company had said “funds were not paid by Gazprom, neither on time nor in full” for the gas transit.

Gazprom said on Tuesday that Naftogaz had no “appropriate reasons” to reject its obligations on transit via the Sokhranovka point, a key route for Russian gas exports to Europe.

In May, Ukraine suspended the flow of gas through Sokhranovka, which it said delivers almost a third of the fuel piped from Russia to Europe through Ukraine, blaming Moscow for the move and saying it would move the flows elsewhere.

…click on the above link to read the rest of the article…

Liz Truss warned of mass bankruptcies if firms left in limbo over energy bills

September 18, 2022

Liz Truss warned of mass bankruptcies if firms left in limbo over energy bills

Prime minister to lead nation in a minute’s silence to honour the Queen’s legacy ahead of funeral.

Liz Truss is facing a political and economic baptism of fire this week with warnings of mass bankruptcies across the economy – even as the new prime minister prepares to lead the nation in a minute’s silence on Sunday night to honour the Queen’s legacy.

Before the Queen’s funeral at Westminster Abbey on Monday and her burial at St George’s Chapel in Windsor Castle, Truss will appear on the steps of No 10 on Sunday night at 8pm as part of a final national “moment of reflection” on the monarch’s life and legacy.

Downing Street is hoping that people will take part in their homes and on their doorsteps across the UK. Sailors, soldiers and air crews from the armed forces stationed overseas will also pause, including on ships and in bases, in what government officials believe could become a global event.

But with the period of national mourning ending after the funeral, when Truss will fly to New York to attend the UN general assembly, and with MPs returning to Westminster on Wednesday or Thursday, the transition back to normal politics will be sudden and potentially bruising for a prime minister who had only been in office for two days before the Queen’s death.

On Saturday night, leading UK business organisations were renewing pressure on ministers for “absolute clarity” on what help government would offer them with their energy bills and warning of dire consequences if they continued to be left in limbo over the level of support in the medium term.

The new business secretary, Jacob Rees-Mogg, will make an announcement on support for business on Wednesday to be followed by a mini-budget by the new chancellor, Kwasi Kwarteng, on Friday.

…click on the above link to read the rest of the article…

Angry Customers Demand Explanation As German Energy Bills Soar

September 17, 2022

Angry Customers Demand Explanation As German Energy Bills Soar

Utilities in Germany have had to handle a surge in customer service calls in recent weeks from clients angry or desperate about their sky-rocketing energy bills, Reuters reports.

The biggest utility, E.ON, has ramped up its capacity to handle calls from consumers who are shocked to find just how much their energy bills have surged in recent months.

Gas prices in Europe are very high and power prices in many countries, including Germany, have hit record levels this summer after Russia choked pipeline gas supply to Europe and shut down indefinitely the key gas export pipeline to Germany, Nord Stream, at the beginning of this month.

“Some become aggressive out of frustration, others are in tears and need psychological support,” Ingbert Liebing, head of local utilities organization VKU, told Reuters, commenting on the spike in customer calls to utilities’ service centers.

Apart from already high energy bills, German customers will have a surcharge as of October, as part of a government plan to implement a so-called gas levy on consumers in order to help struggling energy firms.

Germany has recently announced it would impose a gas levy on consumers from October 1 through March 2024 as it aims to help energy providers and importers of natural gas, which are struggling with low Russian gas supply and very expensive alternatives to Russian gas. The new natural gas tax is set to cost German families, who will have to foot the bill for the tax, an extra $500 a year.

Meanwhile, the German government is in talks with the biggest German importer of natural gas, Uniper, to potentially lift its 30% stake in the company to majority participation or to nationalize the firm…

…click on the above link to read the rest of the article…

Europe Is Facing Energy Disaster And It’s Going To Bleed Over Into The US

September 11, 2022

Europe Is Facing Energy Disaster And It’s Going To Bleed Over Into The US

Though the situation is ever changing, currently the Russian government has announced an official shutdown of ALL natural gas exports to Europe through the Nord Stream 1 pipeline and plans to maintain the shutdown until the EU ends its economic sanctions over the war in Ukraine. This means that around 40% of Europe’s energy resources are now gone, with supply chain issues surrounding the other 60% and prices skyrocketing for households and businesses.

Back in March in an article titled ‘The Biggest Lies (So Far) Surrounding Russia And Ukraine’ I noted that:

“…There’s something else the media does not talk about much, which is Europe’s reliance on Russian oil and natural gas. If you want to see actual price inflation caused by Russia, let the EU ban Russian oil imports, or watch as Putin cuts off the supply. Europe is dependent on Russian oil and gas for about 40% of overall energy production. They cannot even survive a single year without it. If Russia retaliated and blocked energy exports to Europe, the the EU would have to siphon oil from many other countries, reducing global supply dramatically. This would cause gas prices to explode to double or even triple current levels.”

Back in April of this year in my article ‘The Media Is Ignoring These Two Events Which Could Cause Economic Collapse’ I predicted that:

“…The Russian economy is not about to fold anytime soon, and now the EU, which is reliant on Russian oil and gas exports for 40% of their energy needs, is about to face economic doom unless they submit to paying for energy in rubles (which they won’t) or find a replacement source for gas and oil (which is impossible)…

…click on the above link to read the rest of the article…

Get ready for blackouts from London to LA, as the global energy crisis overwhelms grids and sends energy prices skyrocketing

September 11, 2022

Get ready for blackouts from London to LA, as the global energy crisis overwhelms grids and sends energy prices skyrocketing

Illuminated Buildings By River Against Sky During Sunset — Part of Manhattan without power, seen from East River Houses.

Climate change and soaring energy prices could make widespread blackouts more common, even in wealthy nations.
Californians narrowly averted statewide blackouts, and Britons impacted by the war in Ukraine will soon pay nearly double for electricity.
As energy costs soar higher, a new age of rolling outages and grid instability looms large.

Stock up on batteries, candles, and non-perishable snacks. Blackouts are coming.

For the first time in decades, the western world is preparing for widespread and rolling energy shortages. The US, UK, and EU have all been squeezed by Russia’s invasion of Ukraine, soaring costs for electricity and fuel, and record-breaking heat waves. While fall is just around the corner, the worst of the energy strain is likely still to come.

Even wealthy nations won’t be spared, at least without broad broad policy change and private-sector overhauls. Add in the accompanying economic costs and extreme health risks, and you have a very difficult situation.

In California, it will materialize as outage warnings and restrictions on your air conditioning. Then in coming years, Texans, Illinoisans, and Missourians will join the suffering of their west coast peers amid sweltering heat and rolling blackouts.

And across Europe and the UK, residents not used to heat waves will either face skyrocketing energy bills or dangerously hot summers — a situation made worse by their reliance on Russian gas, the flow of which has been essentially cut off entirely.

In the US, climate change risks decades of ‘extreme danger’

Amid record-high temperatures on the west coast Tuesday afternoon, California’s grid operator ISO urged residents to limit their energy use and cautioned that rolling blackouts could arrive.

…click on the above link to read the rest of the article…

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