What is happening? There are specific and complicated reasons why prices are up.
- A cold spring depleted natural gas inventories.
- Rebuilding supplies has been tough, thanks to an unexpected jump in demand as the economy bounces back from Covid-19.
- There’s a growing appetite for liquified natural gas in China.
- Russia is also supplying less natural gas to the market than before the pandemic.
- Meanwhile, other sources of power have been less readily available, with calm summer weather quieting North Sea wind farms.
- Countries are ditching coal as pressure builds to tackle the climate crisis.
- Germany is also phasing out nuclear power by 2022.
Countries like Spain and France are stepping in to subsidize energy bills.
No wonder American diplomats are getting louder in their frustrations with Russia’s plan to mainline into Europe with a new pipeline that will make Russia the continent’s natural gas pusher.
“The world’s biggest polluter is trying to meet a pledge that its carbon emissions will peak before 2030. That requires its provinces to use less fossil fuel for each unit of economic output, for example by burning less coal to generate power. At the same time, demand for Chinese-made goods has surged as the global economy emerges from the pandemic. The result: not enough power to go round.”
Shortage of drivers could shutter gas stations. In the UK, where Prime Minister Boris Johnson was proud to remove his country from the EU via his Brexit plan, they’re now offering emergency visas to foreign truck drivers to keep gas stations open.
Don’t sneer at them for that, though. In the US, Massachusetts mobilized its National Guard to help get kids to school because there aren’t enough bus drivers, either.
Data from the Bureau of Labor Statistics shows the number of drivers plunged at the beginning of the pandemic. Between March and April 2020, the trucking industry lost more than 88,000 jobs, and transit and ground passenger transportation lost more than 185,000 in that month alone.
The driver shortage is among the reasons Costco is again limiting toilet paper purchases.
The auto industry is worse off than we thought. Meanwhile, carmakers worldwide are still being frustrated by the microchip shortage. Add it onto a number of other shortages.
Millions of cars short. The shortage of parts will lead automakers to build 7.7 million fewer vehicles globally than they otherwise would have, according to AlixPartners.
That’s a huge increase over the 3.9 million vehicle shortfall forecast in May.
When will there be microchips? Isidore writes: “Microchip supply had been widely expected to bottom out in the second quarter of this year, and then start to improve. But a surge in Covid-19 cases caused a new round of shortages, as chip plants were forced to temporarily shut down in some hard-hit countries, such as Malaysia.”
“Yes, the intensity of price hikes slowed over the summer, but the Delta variant and its disruptions risk another bout of US consumer price spikes in the fall. Even if they do not occur, consumers are unlikely to see lower prices this year thanks to computer chip shortages, rising wage pressures as businesses reopen and the return of rent hikes,” she writes.