Global energy shortages as we head out of pandemic - BillboardChi news
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Economy and markets » Global energy shortages as we head out of pandemic

TEHRAN – Unprecedented global energy crisis has suffocated nations like Lebanon and brought about the prospect of a long, cold, and crazy winter for many European countries.

On the one hand, oil-rich nations like Iran and Venezuela have been sanctioned from exporting crude and developing their infrastructure; on the other, nations like Lebanon have been sanctioned from importing their fuel needs.

Iranian Oil Minister Javad Owji has recently said the country is ready to resolve the global energy crisis provided the oppressive sanctions are lifted. The minister made the remarks after a meeting of the OPEC-plus and added that Iran is able to swiftly increase its crude production to help alleviate global fuel shortages.

The global lockdowns drastically reduced the demand for fossil fuels. As we head out of this pandemic towards a more normal life, the demand has surged resulting in global fuel shortages. This development is threatening a green recovery from the economic downturn caused by the pandemic.

A cold winter followed by a hot summer and stronger economic growth has led to greater Chinese demand. There isn’t enough coal to meet the world’s largest consumer of fossil fuel. Today, China is experiencing an emerging electricity crisis.

China, which eased upon coal consumption a few months ago to meet emissions targets, is back in the market as stockpiles run low. India faces a similar predicament.

After Brexit, many European truck drivers went back to their home countries and never returned. This has caused a severe shortage of truck drivers in UK to transport fuel from the depot to the pumping stations.

A windless summer has reduced renewable power production to much lower than normal levels. Around 24 percent of Britain’s power is produced by wind.

Soaring oil prices due to windless summer and British and German difficulties in getting access to Russian gas has made the situation bleaker. Those increases will soon hit Australia which imports 80 percent of its petrol, diesel, and jet fuel.

In Europe, the early closure of nuclear plants and record gas prices are set to boost coal use.

In what many consider an overreaction to the Fukushima nuclear accident, Germany decided in 2011 to phase out all of its nuclear power by 2022. Nuclear power generated 29.5 percent of Germany’s power in 2000. All of that has to be replaced by wind, solar, hydro, and natural gas, and there is just not enough.

If you don’t have enough renewable the next best thing is gas, which emits about half as much CO2 as coal. With calmer weather reducing output from turbines, while Europe’s aging nuclear plants are being phased out, making gas even more necessary, increasing gas prices by almost 500 percent in the past year and are trading near record. Today Brent is hovering around $85 a barrel. Some analysts are forecasting for Brent to hit the $100/b mark.

Regular gas in the U.S. is now fetched a seven-year high of $3.32 a gallon nationally, up 5 cents in a week according to AAA. Gas averaged just $2.17 a gallon a year ago, a time when fewer people were driving, flying, and commuting.
Shortage of gas has prompted many power stations to switch to oil further increasing the demand.

The International Energy Agency (IEA) predicts that global oil demand will climb by 5.5m b/d this year and by 3.3m b/d in 2022 when it is forecast to climb slightly above pre-Covid levels of 99.6m b/d.

U.S. President Joe Biden has suggested that if the Vienna talks fail to reinstate the Joint Comprehensive Plan of Action (JCPOA), then all other options are on the table. Israel has been vehemently opposed to the JCPOA from its inception in 2015 and has been threatening strikes on Iran.

A strike at Iran’s nuclear facilities when we are facing the worst energy crisis since 1973 will be suicidal. What if Iran responds by blocking the Strait of Hormuz from where Qatar, the world’s largest exporter of LNG and some 25 percent of the world’s oil passes through.
The IEA predicts that global oil demand will climb by 5.5m b/d this year and by 3.3m b/d in 2022 when it is forecast to climb slightly above pre-Covid levels of 99.6m b/d.

The crisis suggests a longer-than-expected transition to renewable. It will cast a shadow over the COP26 UN climate change talks due to begin in Glasgow on October 31.





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