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Europe’s Energy Crisis Is Coming for the Rest of the World, Too

Consumption

This winter, the world will be fighting over something that’s invisible, yet rarely so vital—and in alarmingly shorter supply.

Nations are more reliant than ever on natural gas to heat homes and power industries amid efforts to quit coal and increase the use of cleaner energy sources. But there isn’t enough gas to fuel the post-pandemic recovery and refill depleted stocks before the cold months. Countries are trying to outbid one another for supplies as exporters such as Russia move to keep more natural gas home. The crunch will get a lot worse when temperatures drop.

The crisis in Europe presages trouble for the rest of the planet as the continent’s energy shortage has governments warning of blackouts and factories being forced to shut.

Inventories at European storage facilities are at historically low levels for this time of year. Pipeline flows from Russia and Norway have been limited. That’s worrying as calmer weather has reduced output from wind turbines while Europe’s aging nuclear plants are being phased out or are more prone to outages—making gas even more necessary. No wonder European gas prices surged by almost 500% in the past year and are trading near record.

The spike has forced some fertilizer producers in Europe to reduce output, with more expected to follow, threatening to increase costs for farmers and potentially adding to global food inflation. In the U.K., high energy prices have forced several suppliers out of business.

Even a normally cold winter in the Northern Hemisphere is expected to drive up natural gas prices further across much of the world. In China, industrial users including makers of ceramics, glass, and cement may respond by raising prices; households in Brazil will face expensive power bills. Economies that can’t afford the fuel—such as Pakistan or Bangladesh—could simply grind to a halt.

relates to Europe’s Energy Crisis Is Coming for the Rest of the World, Too
Low water levels in the Parana River are forcing Brazil’s hydroelectric plants to rely on other fuels for generation.
Photographer: Juan Mabromata/AFP/Getty Images

Utilities and policymakers are praying for mild temperatures because it’s already too late to boost supplies. The prospect of accelerating energy costs, in conjunction with squeezed supply chains and food prices at decade highs, could make more central bankers question whether the jump in inflation is as transitory as they’d hoped. Traders will be carefully dissecting every weather forecast published from now to December.

relates to Europe’s Energy Crisis Is Coming for the Rest of the World, Too
A man fishes in front of a liquefied natural gas tanker berthed at Tokyo Electric Power Co.’s power plant in Futtsu, Chiba prefecture, Japan.
Photographer: Tomohiro Ohsumi/Bloomberg

“If the winter is actually cold, my concern is we will not have enough gas for use for heating in parts of Europe,” Amos Hochstein, the U.S. State Department’s senior adviser for energy security, told Bloomberg Television on Sept. 20. For some countries, “it won’t only be a recessionary value, it will affect the ability to actually provide gas for heating. It touches everybody’s lives.”

In Asia, importers of liquefied natural gas are paying record prices for this time of year to secure supplies, with some starting to snap up dirtier fuels such as coal and heating oil in case they don’t obtain enough. This may undermine efforts by governments to hit ambitious green goals: Gas emits about half as much carbon dioxide as coal when burned.

China, the world’s biggest buyer of natural gas, hasn’t filled stockpiles fast enough, even though imports are almost double what they were last year, according to customs data. Several Chinese provinces are already rationing electricity to industries to meet President Xi Jinping’s targets for energy efficiency and pollution reduction. A power crisis could exacerbate shutdowns if authorities divert gas to light and heat households.

If Chinese factories have to contend with widespread power shortages, global prices for steel and aluminum will jump. To make matters worse, the country is also grappling with a coal shortage.

Utilities in Japan and South Korea are largely protected by long-term LNG contracts that are indexed to oil. Still, Korea Electric Power Co. said on Sept. 23 that it will increase electricity prices for the first time in almost eight years. A sudden cold snap could force more power companies to dive into the spot market to buy emergency gas supplies at record-high rates. That’s what happened last winter.

The cost of securing LNG supplies has sparked a political controversy in strapped Pakistan, with opposition politicians demanding an inquiry into purchases by the state-owned importer.

relates to Europe’s Energy Crisis Is Coming for the Rest of the World, Too
Qatar’s Energy Minister Saad Sherida Al-Kaabi.
Photographer: Donat Sorokin/Getty Images

In Brazil, the lowest flows to the Parana River Basin in almost a century have slashed hydropower output and forced utilities to rely more heavily on gas. The country boosted gas imports to an all-time high in July, and power bills are rising. With inflation already ballooning, that could hurt President Jair Bolsonaro’s chances in next year’s election.

The stage is set for an all-out scramble among Asia, Europe, the Middle East, and South America for shipments of LNG from exporters such as the Qatar, Trinidad and Tobago, and the U.S. “We have huge demand from all our customers and unfortunately, we can’t cater for everyone,” warned Saad Al-Kaabi, Qatar’s energy minister, at an industry conference this month.

American exporters are poised to ship more LNG than ever as new projects come online toward the end of the year. But as more gas goes abroad, less will be available at home. Even though gas prices have been notably lower in the U.S. than in Europe and Asia, they are trading near the highest level since 2014. Gas inventories are running below their five-year seasonal average, yet U.S. shale drillers are reluctant to boost production out of concern that would crimp their profitability and put off investors.

The Industrial Energy Consumers of America has requested that the Department of Energy reduce U.S. exports until storage levels get back to normal, a move that might exacerbate shortages abroad.

It used to be that the average person paid little attention to the market price of natural gas. It isn’t like oil, where a snap decision from OPEC will almost immediately affect how much they pay at the pump. This winter, the world is likely to learn how much the global economy depends on natural gas. —With Lynn Doan and Anna Shiryaevskaya

bloomberg



18 Comments on "Europe’s Energy Crisis Is Coming for the Rest of the World, Too"

  1. Dredd on Fri, 1st Oct 2021 7:03 am 

    “Europe’s Energy Crisis Is Coming for the Rest of the World, Too”

    Comrades in a movie (Call for Emergency Action – 2) eh?

  2. Cloggie on Fri, 1st Oct 2021 9:07 am 

    The European energy crisis is greatly exaggerated:

    https://deepresource.wordpress.com/2021/10/01/van-oord-orders-20-mw-wind-turbine-installation-ship/

    “Van Oord Orders 20 MW Wind Turbine Installation Ship”

    Van Oord could very well become the next Royal Dutch Shell, Philips, ING or what not, now that they ordered 1-2 ships with a capacity of installing 140 MW of wind energy in 1-2 weeks time in a single round trip harbor-wind farm.

    For anything less than 1 GW they won’t pick up the phone.

  3. SendMoneyMyWay on Fri, 1st Oct 2021 11:20 am 

    Find a way to send money my way for the work I did for you. Something in the 7 fitgures

  4. makati1 on Fri, 1st Oct 2021 6:31 pm 

    Of course Cloggie would disagree. He thinks renewables will save the day. LMAO! They are actually causing the problems as wind and sun are NOT reliable energy sources and may never be.

    No realistic way to store the trillions of Gigawatts the world needs on a reliable, constant basis. Not to mention those that will be needed for growth in the developing world.You know, the other 6,500,000,000+ people outside the West.

    BTW: We use solar powered lights outside our home here in the Ps. There are many days that they black out in a few hours, or not come on at all, as the sun is behind clouds all day. Renewables are NOT reliable, even in the tropics.

    FFs until the end. Fun to watch the Western suicide, Pass the popcorn.

  5. Cloggie on Fri, 1st Oct 2021 10:17 pm 

    Netherlands today:

    https://image.gscdn.nl/image/f06e9834c0_Screen_Shot_2021-10-01_at_13.06.54.jpg?w=600&s=04f7ad7e461bfbb2ec2296903200ce22

    Gasoline clearly over 2 euro per liter or for our former colony that would be 9$/gallon

    Oh and despite that, traffic jams (“files”) are back in full:

    https://www.rtlnieuws.nl/editienl/artikel/5256868/file-terug-van-weggeweest-voor-corona-ochtendspits

    “Of course Cloggie would disagree. He thinks renewables will save the day. LMAO! They are actually causing the problems as wind and sun are NOT reliable energy sources and may never be.”

    For simpletons like makati, storage is a foreign word and Americans like him are not very good at languages… or any intellectual effort, yeeeehaaa!

    “FFs until the end. Fun to watch the Western suicide, Pass the popcorn.“

    You’re a real sadistic sicko, BillT. But I agree that the west needs to be burried at the earliest opportunity.

  6. Cloggie on Fri, 1st Oct 2021 10:22 pm 

    UK sends in army fir fuel deliveries:’

    “Finally the army goes in! Soldiers to start delivering petrol to UK forecourts from Monday – but Rishi Sunak admits ‘very real’ food shortages will last until Christmas“

    https://www.dailymail.co.uk/news/article-10050749/Soldiers-start-delivering-petrol-UK-forecourts-Monday.html

  7. Biden's hairplug on Sat, 2nd Oct 2021 1:17 am 

    Secession time!

    “Majority of Trump voters and 41% of Biden fans want to SECEDE from union, see ‘other’ party as totalitarian – poll”

    https://www.rt.com/usa/536397-poll-americans-secede-divide-fascism/

    How America will come to its end: diversity wasn’t our strength after all. Humans are tribal, and US whites will eventually vote with their feet:

    https://documents1940.wordpress.com/2017/09/25/amerikaner/

    https://parisberlinmoscow.wordpress.com/2020/08/10/the-unraveling-of-the-united-states/

    https://parisberlinmoscow.wordpress.com/2021/07/31/the-end-of-empire/

    https://parisberlinmoscow.wordpress.com/2021/05/13/us-generals-fear-for-their-republic/

    https://documents1940.wordpress.com/2021/07/24/ben-stein-eulogy-to-the-usa-goodbye-america/

  8. Biden's hairplug on Sat, 2nd Oct 2021 7:55 am 

    The US-friendly DailyMail quotes the same US poll as RT did:

    “America thinks the unthinkable: More than half of Trump voters and 41% of Biden supporters want red and blue states to SECEDE from one another and form two new countries, shock new poll finds”

    https://www.dailymail.co.uk/news/article-10050039/More-HALF-Trump-voters-want-red-states-secede-union.html#comments

    “Fuel crisis is ‘getting WORSE’ in the South East! Petrol retailers demand urgent action to restock filling stations in the South as ‘one charges £2.68 a litre’ – with soldiers finally set to start delivering fuel from Monday”

    https://www.dailymail.co.uk/news/article-10051755/Soldiers-start-delivering-petrol-forecourts-Monday-amid-warnings-3p-rise-fuel-costs.html

    There is only one remedy: increasing the retirement age.

  9. Biden's hairplug on Sat, 2nd Oct 2021 8:04 am 

    The vassals are sensing where the wind is blowing:

    https://twitter.com/theinsiderpaper/status/1444046887150104585

    French #1 newspaper Le Monde openly “speculates” about the end of the US empire:

    https://i1.wp.com/courrierdesameriques.com/wp-content/uploads/2021/09/spectacle-du-monde-le-suicide-americain.jpg?fit=1280%2C853&ssl=1

    You can be sure that this is synchronized with the French government. Obviously, the French government has long drawn conclusions from that.

    #Russia

  10. Duncan Idaho on Sat, 2nd Oct 2021 9:44 am 

    “The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the hunting of black skins, signaled the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation. On their heels tread the commercial wars of the European nations, with the globe for a theatre”
    -KARL MARX.

  11. Biden's hairplug on Sat, 2nd Oct 2021 12:06 pm 

    KARL MARX.

    Karl Marx his ideology transformed most of Eurasia into the greatest hellhole in world history and (((Wall Street circles))) funded the nightmare. Stop idolizing this kosher punk.

    No less than 38 Chinese fighter jets made incursions into Taiwanese airspace last night:

    https://www.spiegel.de/ausland/china-dringt-mit-35-kampffliegern-in-taiwans-luftraum-ein-a-e4a1f060-516e-437f-b838-388cf949e5b5

    At some point they will dump bombs on airfields with Taiwanese fighter jets parked on them, after which wave after wave of paratrooper planes will drop off its load of tens of thousands of troops above strategic locations, like airports, ports, power stations, TSMC plants, etc.

    I don’t think Beijing is going to wait until 2030.

  12. FamousDrScanlon on Sat, 2nd Oct 2021 2:06 pm 

    clog calls US corrupt, but then clog gets giddy from results of US polling. So, everything BUT US polling is corrupt?
    Can you explain how your ‘truth finder’ system, for a corrupt collapsing nation, works? How many deep cover, on the ground truth operatives does your truth finder organization have clog? Do you guys like swear an oath of allegiance to American truth & hand out super nifty ‘Truth Operative’ badges-N-stuff?

    Thank the good lord for clog for without him we’d have to get all our info from the internet

  13. Cloggie on Sun, 3rd Oct 2021 1:45 am 

    “Isn’t your “green dream” working out so well?”

    High gas prices are not a threat to my “green dream”, but will only speed up the energy transition. They are a Godsend. We need to get of fossil fuel before it gets rid of us.

    Btw, there is no fundamental lack of gas, it is just that uncle Vlad has stopped delivering gas via the old pipelines, forcing Europe to take gas from Nord Stream 2.

    Yes, most of Europe’s gas reserves are dangerously low, but in the Netherlands they are thinking of increasing our own production again, for this coming winter. We won’t have major problems, thank you.

    A major disruption of energy supplies in Europe could actually be beneficial to raise awareness among the population of the energy problem and take NIMBY saboteurs head-on who are blocking building wind turbines because “they are too high”. Fuck you. Sit in the dark and cold then.

    This is not the time to dream of a world-trip or a new car, this is the time to finally get serious about solar panels on your roof, a wind turbine next to every village, a battery in the attic, a heat pump, triple glazing and what not.

  14. makati1 on Sun, 3rd Oct 2021 6:32 pm 

    Cloggie, you pick out a tiny bit of the total picture and claim it proves your delusion. Keep pushing it if it makes you feel secure, but reality will soon prove otherwise.

    Don’t you see that the “Green” thingy is just brainwashing/propaganda/bullshit? That the “Reset” is meant to take down the major consumers, who just happen to be in the West?

    You cannot seem to get the big picture. But you are not alone. Most Westerners don’t, or don’t want to, see it either. Their/your loss, not mine.

    BTW: Look at the countries that have the most people GMO-JABBED and see what I mean. Those are the countries that will soon have a big die-off from the GMO-JAB side effects. Not to mention even more economic destruction. Pass the popcorn.

  15. Biden’s hairplug on Tue, 5th Oct 2021 1:15 pm 

    Most innovative regions in the world:

    1. Europe
    2. North-America
    3. Asia

    No surprises here.

    https://www.visualcapitalist.com/national-innovation-the-most-innovative-countries-by-income/

    “TECHNOLOGY Global Stars: The Most Innovative Countries, Ranked by Income Group“

    Apparently, apneaman’s “super jews” don’t make the difference.

  16. makati1 on Tue, 5th Oct 2021 4:12 pm 

    Biden’s, obviously an EU sponsored site. Also misleading/propaganda. The EU is dying,just slower then the US. LMAO!

  17. Hello on Tue, 5th Oct 2021 5:07 pm 

    >> Most innovative regions in the world:

    #1 is Switzerland, no less !!!!!!

    Fuck, Clog, the US consisting of a bunch of old white farmers and the rest 3rd world imported mexicans and negros beats NL? What are you guys doing? Not enough innovation in tulip growing? Even worse, also Boris beating you? *smile*

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