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Inflation and soaring gas prices have forced a North Carolina logging company to shut down after 37 years in business

Inflation and soaring gas prices have forced a North Carolina logging company to shut down after 37 years in business
As of Monday, gasoline cost $4.491 per gallon, per the US Energy Information Administration.Johner Images/Getty Images
  • A logging business in North Carolina is shutting down over accelerating inflation and soaring gas prices.
  • “I haven’t talked to a logger in the last few years that is actually making money,” its owner said.

A family-run logging business in North Carolina is shutting down after being unable to cope with accelerating inflation and soaring gas prices.

Bobby Goodson, who set up Goodson’s All Terrain Logging 37 years ago, said that he couldn’t find a way to keep the business running.

“I haven’t talked to a logger in the last few years that is actually making money,” Goodson said in a video posted on his YouTube channel on May 10, where he announced that he was closing his business.

Goodson said that he was going to start selling off his equipment. “I can’t park the stuff for six, eight months, a year waiting for the economy to turn around,” he said.

Fuel prices have been soaring in the US as a result of post-pandemic demand and the conflict in Ukraine. As of Monday, regular gasoline cost $4.491 per gallon on average, up $1.463 from the same time a year ago, per the US Energy Information Administration, an increase of nearly 50%. Though crude oil prices have eased recently, oil refiners have become a bottleneck in the energy market, pushing up gas prices.

“When you got a fleet of trucks, and you’re running probably 700 to 800 miles a day, a truck is going to get five miles to the gallon,” Goodson told News Channel 12, an ABC-affiliated network. “That fuel increase kills you. And so I didn’t see any way out.”

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

US Gas Prices Soar As Europe And Asia Scramble For LNG

US Gas Prices Soar As Europe And Asia Scramble For LNG

U.S. gas prices have surged to the highest level in real terms since the financial crisis in 2008 as strong demand for LNG from buyers in Europe and Asia puts pressure on inventories. Front-month futures for gas delivered to Henry Hub in Louisiana are trading at almost $9 per million British thermal units, up from just over $3 at the same point last year and less than $3 in 2019.

Front-month futures have surged into a record backwardation of almost $4 above futures for delivery one-year from now, as traders anticipate inventories will remain under pressure through the rest of the year.

Working gas stocks in underground storage are 335 billion cubic feet or 18% below the pre-pandemic five-year seasonal average for 2015-2019.

Inventories have remained low despite a fairly mild winter, with population-weighted heating demand this winter in the Lower 48 states around 7% below the average.

Domestic gas production has recovered to its pre-pandemic peak, according to data from the U.S. Energy Information Administration. But exports especially in the form of LNG have risen sharply, which is keeping inventories low and putting upward pressure on prices.

In recent months, LNG exports have been equivalent to 10-12% of domestic dry gas production, up from around 4% in early 2019. Exports have become a big enough share of the market they have started to enforce a partial convergence with prices in Europe and Asia.

U.S. gas supplies have tightened as Europe and Asia scramble to buy LNG to refill their own depleted storage after last winter and amid fears about a disruption of gas supplies from Russia.

The rise in prices will enforce maximum fuel-switching among power generators from gas to coal to conserve fuel stocks this summer, with spot gas now uncompetitive against coal except for peak generation.

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

The gas price crisis – in a hole, stop digging, here’s how to climb out…

Does it seem odd that in a gas price crisis, there are people arguing we should dig ourselves deeper into the grip of that particular fuel? We’ve been here before – and it never ends well. A poorly regulated banking system crashes and its defenders say that even less rules are needed to recover. Or, house prices go through the roof and instead of controlling property speculation, more money is poured into the market without building more homes.

In the grip of yet another fossil fuel price crisis, there are already voices saying that we need more of what got us into the mess in order to escape it. It’s like thinking, ‘my head hurts because I knocked it, if I hit it even harder the second knock will take away the pain of the first.’ When it comes to the energy issue, some seem incapable of even imagining a situation in which economies stop hitting themselves on the head with further fossil fuel addiction.

And, that’s a shame, because there’s an abundance of evidence of the ability to shift rapidly to much less economically and ecologically painful energy systems.

Collaborating with UK research body Nesta, the Rapid Transition Alliance looked at several cases of successful escape pathways from dependence on gas, with all its pollution and price volatility.

The first flush of transition

Gas is still a very common fuel used for heating homes, being literally plumbed into our daily lives. The idea that this could change quickly is hard to grasp. But it’s easy to forget how recently and radically home life has changed in many European homes. Only two generations ago, one in four homes in England and Wales still lacked an indoor shower, bath or toilet. In just over two decades, that number fell to 1%.

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

Gas Prices In Europe Are Soaring Again Amid New Cold Snap

Gas Prices In Europe Are Soaring Again Amid New Cold Snap

European benchmark natural gas prices rose on Wednesday for the third day in a row, as gas deliveries from Russia via Ukraine and Poland continue to be low while another cold snap is headed to Europe.

On Wednesday, natural gas prices at the Dutch TTF hub, the benchmark for European gas, rose by 6 percent by mid-day, following a 30-percent jump on Tuesday.

European gas prices reflect growing concerns that Russian natural gas flows to Europe via Ukraine and Poland have been abnormally low in recent days.

Russian gas supply to Europe via Ukraine dropped earlier this week to the lowest daily volume since January 2020. Daily gas transit flows from Russia westward to Europe via Ukraine on Monday were half the amount Russia had booked for that day, Sergiy Makogon, chief executive officer at Ukraine’s transmission system operator Gas TSO wrote on Facebook on Tuesday, adding that the drop in transit gas volumes was expected to continue. This is the lowest transit volume of gas Russia has sent via Ukraine since January 2020, Makogon said.

Ukraine has accused Russia of deliberately withholding gas supplies to Europe during the winter months to try to force an approval of the controversial Gazprom-led gas pipeline project Nord Stream 2.

At the end of December, Ukraine’s transmission system operator sent a letter to the German Ministry of Economy, in which it says, “we firmly believe that Nord Stream 2 endangers the security of the European Union’s gas supply.”

Nord Stream 2 awaits approval in Germany and then a review from the EU, which will likely push the in-service date of the pipeline well beyond the current winter heating season in Europe.

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

Pakistan Textile Exports Hit by Gas Crunch, Industry Body Says

  •  $250 million of textile exports were lost in Dec., group says
  •  Energy minister rejects claims low gas supplies are to blame

Pakistan’s natural gas shortage is hurting its crucial textile exports, according to an industry trade organization, putting even more stress on the nation’s struggling economy.

About $250 million of textiles exports were lost last month after mills in Punjab were forced to shut for 15 days, said Shahid Sattar, executive director of All Pakistan Textile Mills Association. Factories in the province are dependent on power generated from regasified imports of liquefied natural gas, while domestic supply is being diverted to other regions, he said.

Pakistan has become a fast-growing import market for LNG as local supply has subsided over the last few years. But competition for the fuel — used as an electricity feedstock and for heating and cooking — has intensified due to global shortages, sending spot prices to levels that Pakistan can’t afford.

“The high gas prices are prohibitive,” Sattar said in an interview. The “supply shortfall is due to the energy ministry’s inability to arrange supply, and is hurting the very future of Pakistan’s exports and economy.”

Pakistan’s government, which has been criticized by the opposition for mishandling LNG imports, refutes claims that textile exports dropped because of low gas supplies. More than 90% of mills shifted to using electricity from the grid when gas wasn’t sent to their power generation units last month, Energy Minister Hammad Azhar said by phone, adding that “the electricity is being offered at regionally competitive rates.”

Pakistan restored gas to the textile sector last Wednesday after the association halted litigation against the government on the supply cut, and agreed to energy audits of their captive power plants. Only half of the companies have restored connections, while the rest are still running their mills on the national grid, according to the ministry.

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

European Gas Prices Hit Record High As Germany Blocks Nord Stream 2

European Gas Prices Hit Record High As Germany Blocks Nord Stream 2

European gas futures surged to a record high on Tuesday after Germany blocked Russia’s Nord Stream 2 pipeline from launch because it did not comply with European law.

German foreign minister Annalena Baerbock said all three parties that make up the new government (Social Democrats, Greens, and Free Democrats) agreed that the newly constructed Nord Stream 2 pipeline failed to meet European energy law requirements.

“And that means that, as things stand at the moment, this pipeline can’t be approved because it does not fulfill the requirements of European energy law,” Baerbock said.

And it’s very specific to Europe as the arbitrage to US natgas has never been wider…

While ‘record high’ is enough of a problem, for context, this is equivalent to a $232 price for a barrel of crude oil… strongly suggesting the pressure to switch must be building (and with it demand for crude, which could skupper Biden’s cunning plan to lower US gasoline prices)…

Over the last month, a series of setbacks for the new Russian pipeline have been seen. German energy regulators suspended Nord Stream 2’s certification process, and the US has also sanctioned companies affiliated with the pipeline’s construction.

Baerbock also said geopolitical uncertainties in Ukraine were “also a factor” as Russia has amassed more than 100,000 troops on the border. “The last government discussed with the Americans that if there are further escalations, this pipeline can’t come online,” she added.

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

EU Gas Prices Soar On NS2 Delays, Sudden Belarus Pipeline Closure

EU Gas Prices Soar On NS2 Delays, Sudden Belarus Pipeline Closure

European natural gas prices continue to soar after Nord Stream 2 pipeline delays were seen earlier this week, and now a major crude pipeline from Russia into Europe has temporarily halted flows due to “unscheduled repairs.”

The newest market generated information pushing up European natgas prices to the highest levels in a month is due to a Belarus portion of the Druzhba oil pipeline system carrying Urals crude from Russia to Europe has temporarily halted flows to address “unscheduled repairs,” the Russian energy export giant Transneft wrote in a statement.

“Unscheduled repairs were started on one of the branches of the Druzhba oil pipeline, limiting the flow in the direction of Poland for approximately three days, while the planned target for the month is not being revised,” Transneft spokesman Igor Demin said.

Gomeltransneft, the operator of the Belarusian section, said maintenance began on Nov. 16. “Starting from yesterday, Gomeltransneft has started an unplanned maintenance at one of the lines of the Druzhba pipeline, having restricted [crude] pumping towards Adamowa Zastawa [in Poland] tentatively for three days, but the plan for the month is not revised,” a Transneft spokesman said. 

Druzhba is one of the largest pipeline networks in the world that carries a mix of heavy sour oil of Urals and light oil of Western Siberia, where its network splits in two and pumps the crude into a northern section, Poland and Germany, and a southern area, Ukraine to Slovakia, the Czech Republic, and Hungary.

The unscheduled repairs, restricting flows, come days after Belarusian leader Alexander Lukashenko threatened to cut the transit gas supply from Russia to Europe over a migrant crisis at the Belarus-Poland border.

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

Global Food Prices Set To Soar As The Oil And Gas Crunch Continues

Global Food Prices Set To Soar As The Oil And Gas Crunch Continues

  • Oil and gas prices have risen dramatically this year as a result of underinvestment and recovering demand.
  • Higher fuel prices are weighing on global food supply chains, with transportation and farming costs continuing to climb.
  • The hardest hit will, once again, be those living in developing economies that are still struggling to recover from the impact of the pandemic.

The potential for a knock-on effect of rising fuel prices to be felt by other industries is becoming more likely, as oil and gas prices continue to rise to an all-time high, companies are finding it hard to maintain their costs and may have to shift this burden to the consumer any day now.

Petrol prices have risen higher and higher this year, as oil makes a comeback in 2021 following a difficult year of pandemic restrictions and low demand. This has, of course, been aided by the OPEC+ curbs on production that restricted oil output across member states for the first half of 2021. And while production levels are slowly rising, some countries are finding it difficult to reach new OPEC targets as they revive their oil and gas industries, meaning the global shortage continues.

Looking at the price of gasoline over the last 20 years, you can see that the global average has doubled, from $0.60 a litre in 2001 to $1.20 a litre today. This year, in particular, the increase in demand as economies open back up following over a year of restrictions, added to a supply shortage across much of the world, means prices are nearing an all-time-high.

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

After Rapid-Fire “Blame Putin” Headlines, European Commission Quietly Affirms Russia Is Not Manipulating Gas Market

After Rapid-Fire “Blame Putin” Headlines, European Commission Quietly Affirms Russia Is Not Manipulating Gas Market

Putin earlier this week batted down as “utter nonsense” widespread accusations among Western media pundits that Europe’s energy crisis is due to the Kremlin using gas as a ‘geopolitical weapon’.  It now appears the European Commission is quietly agreeing with him. This as Nord Stream 2, which Washington has long battled to stop, is awaiting final approval from German regulators begore going online.

As the Economist summarized of the ongoing accusations: “Russia is responding to a view gaining currency in European capitals that Gazprom, the state-controlled energy goliath that is the continent’s biggest supplier, has been stoking the continent’s energy crisis by withholding exports of natural gas. European parliamentarians are demanding that Gazprom be investigated for not shipping more gas, allegedly as a ploy to secure final regulatory approval for the controversial Nord Stream 2 pipeline designed to ship Russian gas to Germany.”

Image via New York Times

A somewhat exasperated Kremlin spokesman Dmitry Peskov last week noted Gazprom has fulfilled its current obligations to the maximum extent possible under existing contracts: “Nothing can be delivered beyond the contracts. How? For free? It is a matter of negotiating with Gazprom,” he said.

Of course, the somewhat sensational headline-grabbing accusations are what dominated press reports for much of the week, with new Friday comments from the European Commission getting buried. Vice President of the European Commission Frans Timmermans indicated there’s no reason to believe Russia is manipulating the market.

Timmermans bluntly said the following in an interview with Bulgarian broadcaster bTV:

“Russia is fulfilling its gas supply contracts.” He added that “we have no reason to believe it is putting pressure on the market or manipulating it.”

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

British industry warns of factory closures without help on fuel costs

Stainless steel tubes are stored ready to be made into exhausts at the Eminox factory, during a post-Budget visit by Britain's Chancellor of the Exchequer Philip Hammond, in Gainsborough, Britain October 30, 2018.  Christopher Furlong/Pool via REUTERS

Stainless steel tubes are stored ready to be made into exhausts at the Eminox factory, during a post-Budget visit by Britain’s Chancellor of the Exchequer Philip Hammond, in Gainsborough, Britain October 30, 2018. Christopher Furlong/Pool via REUTERS

LONDON, Oct 9 (Reuters) – Britain’s most energy intensive manufacturers, including producers of steel, glass, ceramics and paper, have warned the government that unless something is done about soaring wholesale gas prices they could be forced to shut down production.

Wholesale gas prices have increased 400% this year in Europe, partly due to low stocks and strong demand from Asia, putting particular pressure on energy intensive industries. read more

Industry bosses held talks on Friday with business minister Kwasi Kwarteng but said these ended with no immediate solutions.

“If the government doesn’t take any action then basically what we’ll see for the steel sector is more and more pauses of production in certain times of the day and those pauses will become longer,” Gareth Stace, director general of UK Steel told ITV News.

Similarly, Andrew Large, director general of the Confederation of Paper Industries, told the same broadcaster that he could not rule out factories having to suspend production due to increased energy costs.

David Dalton of the British Glass Manufacturers Association said some companies were days away from halting production.

After meeting the industry leaders on Friday, Kwarteng’s department said he was determined to secure a competitive future for Britain’s energy intensive industries.

It said he “promised to continue to work closely with companies over the coming days to further understand and help mitigate the impacts of any cost increases faced by businesses.”

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

Europe’s Gas Prices Surge To Avert Risk Of Winter Shortage

Europe’s Gas Prices Surge To Avert Risk Of Winter Shortage

Europe’s gas and electricity prices are setting record highs on a daily basis and rising at an accelerating rate as the market tries to destroy enough demand to protect depleted inventories ahead of the winter.  Gas storage sites in the European Union and United Kingdom are currently just under 76% full, compared with a ten-year seasonal average of almost 90%, according to data compiled by Gas Infrastructure Europe.

In the last decade, storage has emptied by an average of 57 percentage points over winter, but depletion is highly variable, ranging from a minimum of 38 points in 2013/14 to a maximum of 71 points in 2017/18.

If this winter sees an average drawdown, storage sites would be reduced to just 19% full by next spring, the second lowest for a decade, leaving the region with a persistent gas shortage next year.

If the winter sees a moderately strong draw, in the 75th percentile, storage would be reduced by 68 percentage points to a record low of just 8% next spring, increasing the probability supply will actually run out in some areas.

If the winter sees a maximum draw, similar to 2017/18, storage would be almost exhausted by next spring, making local shortages almost inevitable.

Futures prices are rising to avert this threat by rationing demand now to conserve inventories and reduce the risk of running out later in the winter.

Sharply rising prices are the reason wholesale markets (such as European gas) rarely run into physical shortages, unlike retail markets (U.K. gasoline and diesel) where price rises are typically more limited for commercial and political reasons.

Europe’s gas and electricity prices are likely to remain elevated until there is clear evidence that they have begun to reduce demand and conserve inventories.

Fresh Legal Fight Erupts Over Nord Stream 2 As Europe Energy Costs Soar Ahead Of Frigid Winter

Fresh Legal Fight Erupts Over Nord Stream 2 As Europe Energy Costs Soar Ahead Of Frigid Winter

Just ahead of Monday’s announcement that the North Stream 2 Russia to Germany natural gas pipeline has begun filling with gas in the first line while awaiting approval from Germany regulators before it goes fully online and the taps are turned on, Russia’s Deputy Foreign Minister Alexander Grushko in weekend statements had warned that political opponents are ready to exploit “legal squiggles” to prevent it from finally going operational.

“I will stress once again: all the necessary steps, including in the legal field, have been taken and we firmly hope that this project will be implemented,” Grushko explained, while warning of the “rather complicated” process for receiving legal certification on the European side. Crucially signs of a final inter-EU political fight have already emerged, as Bloomberg details, European lawmakers “who supervised the European Parliament’s work on EU gas market legislation, said NS2 doesn’t meet the conditions for German certification because it fails to meet the unbundling criteria (which ensures as gas provider is prevented from simultaneously controlling the transmission side of the business).

Dresden in winter, via Planetware

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

The Looming Energy Crisis: People Are Going To Die This Winter

For many months myself and many of the investors I work with have become increasingly concerned at the growing instability and insecurity of energy markets. The 4 times spike in Gas prices this year has been a shocking wake-up call, highlighting energy insecurity in Europe and particularly the UK. Gas prices will remain elevated for months to come. The consequences are going to be brutal – and fatal for some.

Energy – whether derived from fossil fuels, nuclear or renewables – is a commodity and the critical thing about commodities is: “You can’t print commodities like you can print money. The rules are not the same,” says my good friend and head of commodities at Shard, Ashley Boolell.

Commodities are volatile and dangerous. Oil has doubled in recent months. But the thing about Gold, Silver, Palladium and copper prices is; no matter how volatile they are, they are simply investment opportunities or traps, and are unlikely to kill us.

Energy is different. It can kill us.

That was conclusively demonstrated earlier this year in Texas. A swift series of winter storms crashed the Texan grid when gas infrastructure failed in the cold, renewables weren’t delivering, and the deregulation of its energy system had delinked Texas from both US power Grids – making it difficult to import energy. Over 200 people died as a result of power outages.

Fast forward to this winter, and the UK and Europe are in the direct firing line of the coming energy storm. The security of energy supplies has never looked less certain. In the UK, neglected storage means we have the capacity to story 3-4 days of Gas…

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

Global gas wars: the fun has just begun!

Global gas wars: the fun has just begun!

Spot price for natural gas in Europe has just breached the psychologically important level of $1000 per thousand cubic meters, or a buck a cube. This has already had some significant results all across Europe. In the UK, fertilizer plants can’t operate at such prices and have shut down. This will in due course cause food price inflation later on, but the immediate effect is to deprive consumers of packed meat and beer because of a shortage of dry ice that is a byproduct of fertilizer production. Meanwhile, all the way on the other side of what remains of the European Union, in the Baltic statelets electricity prices are now 10 times higher than just across the border in Russia. Of course, they are welcome to buy cheap and plentiful electricity from Russia, but that has to come in via Belarus and Lithuania and the Lithuanians have strategically wrecked relations with Belarus by harboring the fugitive Tikhanovskaya the cutlet queen who is a sort of Belarussian Juan Guaidó.

On the other side of Belarus lies the Ukraine, where things are even more fun. Back in spring of 2019 the Ukraine declined Russia’s gracious offer to sell it gas $240-260 per thousand cubes (a quarter of the current spot price) and instead opted to buy it on the spot market. The result is that the Ukraine needs 13 billion cubes of gas in storage to get through the heating season but has less than 5. But it can always buy what it needs on the spot market, right? Wrong! The Ukraine is broke and has zero budgeted for this purpose…

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

Europe’s Soaring Natural Gas Prices To Persist For “Weeks To Come,” IEA Warns

Europe’s Soaring Natural Gas Prices To Persist For “Weeks To Come,” IEA Warns

IEA Executive Director Fatih Birol delivered some unwelcoming news for commercial and residential natural gas buyers during an interview on Bloomberg TV Friday morning. He said European natural gas prices might push higher in the coming weeks as the heating season begins.

“We may still see gas prices a bit high for the next days and weeks to come,” Birol said in the interview. The “most important factor here will be in the short term — how the winter conditions will be.”

He said if the European winter season is “harsh.” This would suggest natgas prices may remain elevated and or even accelerate higher. So far, European gas prices have more than tripled this year.

Birol said, “very strong demand” due to the economic rebound has been a driver in higher natgas prices. There’s also the issue of declining flows from Russia, which have failed to replenish European stockpiles ahead of the heating season.

Natural gas supplies are below average for this time of year.

For Central Europe, maximum average temperatures have already slipped from around 80F in mid-August to about 70F. By the end of the month, maximum high temps are slated to drop between the 55F to 60F range. This means the heating season is beginning.

Another way to quantify increasing heating demand in Central Europe is through heating degree days, which measure the energy needed to heat a building. The index rises when daily average temperatures are below 65F.

Uncertainty looms over the replenishment of European natgas supplies as colder weather has arrived. Russia’s Nord Stream 2 pipeline to Germany could be Europe’s saving grace, but regulators could take months to certify before taking shipments.

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

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