Evelyn Pyburn
Utility companies in the US are concerned about potential power outages this winter according to a number of media including Bloomberg News and Epoch Times and Washington Post.
Bloomberg quotes the head of Xcoal Energy Resources saying, ““We’ve actually had discussions with power utilities who are concerned that they simply will have to implement blackouts this winter.”
Of greatest concern in the US are areas in New England and California.
“If markets don’t stabilize soon, especially as the northern hemisphere heads into colder months, we could be in for a very rough winter,” says yahoo!news.
The concern is one that Montana’s NorthWestern Energy officials share. In the last issue of Big Sky Business Journal the company explained that those concerns have spurred their decision to move up construction of a natural gas- fired power plant in Laurel to be used for backup generation.
Currently NWE supplies are not adequate to provide the energy needed during periods of peak demand. They must purchase the energy needed in a market that is very high priced; and given the demands and vulnerabilities of other states, is becoming increasingly uncertain. And, even if they can purchase the energy, they may not be able to get it to Montana because transmission capacity is also very uncertain. It’s a precarious situation for a state that regularly plunges into sub-zero temperatures in the winter.
The U.S. has enough gas to get through a normal winter, said James Shrewsbury, co-chief investment officer of e360 Power LLC, a gas and power hedge fund in Austin, Texas at EnergyNow.com. But sustained low temperatures could create gas shortages. “If we get a prolonged cold this winter, there will be problems.”
Having been forced to abandon many fossil-fueled energy sources in the US, with very little replacement, energy prices have escalated, as in keeping with the law of supply and demand. Natural gas and coal prices “just hit their highest levels on record,” said Tom Friedman in The New York Times. “Oil prices in America hit a seven-year high, and U.S. gasoline prices are up $1 a gallon from last year.”
Forbes reported that Bank of America has predicted the possibility that the price for crude oil could exceed $100 per barrel over the winter and “precipitate a global economic crisis.”
The shortages are not unique to the US, in fact the US has so far been “spared the worse” because the country is “an energy producer,” says the Washington Post.
“Energy is so hard to come by right now that some provinces in China are rationing electricity, Europeans are paying sky-high prices for liquefied natural gas, power plants in India are on the verge of running out of coal, and the average price of a gallon of regular gasoline in the United States stood at $3.25 on Friday — up from $1.72 in April.”
A common thread of media reports is that the shortages are the consequences of “pent up demand” brought on by COVID restraints on business. There is obvious reticence in the news reports to mention that another possible cause is curtailed production resulting from government mandates on utility companies, which are “green strategies” to deal with global warming predictions. But some reports do suggest that the situation is not just problems brought on by COVID.
The Washington Post states, “Energy analysts argue that Europe moved too quickly away from fossil-fueled power, before ensuring that sufficient renewable sources could take up the slack in an emergency. Caught halfway in a transition that should take decades, they say, Europe is now scrambling to find coal and gas to burn in its remaining traditional plants.”
There remains many who refuse to lay the blame at the door of global warming policies that abandoned using fossil-fuels. Last spring when cars were lined up at gas pumps in the east, gas shortages were attributed to the “unintended and unexpected price of efficiency.” “The market-driven energy sector has spent a decade or more cutting costs, streamlining and digitizing,” accused an article in the Washington Post.
Another report points out “Texas and California have driven the price of electricity down by throwing out the old regulatory structure — the structure that made sure utilities earned enough to invest in backup resources.” So, when things go awry there is no backup.
While probably true, blame goes deeper than just the decisions of the “energy industry;” just to mention “regulatory” means you are talking about the government in one fashion or another. In almost every case the industry has been functioning under political pressures and regulatory edicts that have dictated the adoption of alternative energy sources, while advocates of alternatives have shown little interest in addressing the shortcomings of those alternatives – most especially in developing backup resources.
Stated another report, the blame lies with industry that “has stripped redundancy out of its systems, at the risk of leaving customers in the lurch when things go wrong.”
The “Greens” of Europe and Russia are claiming that governments are manipulating crisis in order to “create a sense of urgency.” E.U. climate chief Frans Timmermans said those who blame the Green Deal are doing so for “ideological reasons”.
Rushing back to fossil fuels would be a mistake, they say. They want to double-down on green policies with no explanation on how to provide backup resources when temperatures plunge and wind turbines ice up as happened early this spring in Texas.
The Post quotes Timmermans saying, “The wrong response to this would be to slow down the transition to renewable energy. . .The right response is to keep the momentum and perhaps even look for ways to increase the momentum.”
The situation is one that is resurrecting interest in coal.
The International Energy Agency says that the US is “poised” to increase its use of coal, noting that currently most of the demand for coal comes from China and India.
EnergyNow.com reports more coal is being used, which is “now in short supply.” Contributing to the shortage is that regulatory threats on the coal industry has made suppliers reluctant to invest to maintain or to increase production. “Now, U.S. utilities’ stockpiles are shrinking and it’s not clear whether U.S. miners will be able to meet their increasing calls for more fuel. . . U.S. utilities are switching away from gas and expected to burn about 23% more coal this year,” said EnergyNow.com.
yahoo!news adds, “urging energy prices will likely add further inflationary pressures to the global economy, as the rising cost of shipping and travel gets passed onto consumers around the world. The increased costs and disruptions will also contribute to shortages in a wide range of products
TotesNewsworthy.com announced that consumers at the wholesale and retail levels can expect this winter shortages of electronics, vehicles, clothing, furniture, and food. Rising energy costs contributing to increases in transportation costs will augment scarcity of materials and a lack of employees for “a one-two punch for consumers”.
According to Forbes magazine, food price in general has increased 3.4 percent in one year, meat is up 5.9 percent, milk is over 6 percent more expensive.
Other shortages expected include furniture prices have already risen almost 9%, jewelry is over 10% higher, and major appliances prices are up more than 12%.
The shortages won’t be as severe in the US, speculates yahoo.com, because the US produces a lot of natural gas, “making us less dependent on foreign supplies of energy. That self-sufficiency should insulate us from the worst of the energy turbulence around the world, at least for a while — though inflation, already running high, could still end up dampening the economy more broadly.”
