It was only a matter of time, really. In a globalized world, energy crunches can hardly remain regionally contained for very long, especially in a context of damaged supply chains and a rush to cut investment in fossil fuels. The energy crunch that began in Europe earlier this month may now be on its way to America. For now, all is well with one of the world’s top gas producers. U.S. gas exporters have enjoyed a solid increase in demand from Asia and Europe as the recovery in economic activity pushed demand for electricity higher. According to a recent Financial Times report, there is a veritable bidding war for U.S. cargos of liquefied natural gas between Asian and European buyers—and the Asians are winning. […]
All this should be good news for U.S. producers of fossil fuels. But it may easily become bad news as winter approaches. The Wall Street Journal’s Jinjoo Lee wrote earlier this week high energy prices could be the next hot import for the United States. Lee cited data showing gas inventory replenishment was running below average rates for this season, and gas in storage in early September was 7.4 percent below the five-year average.
Add in the current “La Nina” watch, meaning a good chance of a La Nina this fall, and colder than average January-February temperatures in North America.
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Not a great outlook heading into winter. Of course, here in Canada, we also have sales taxes and carbon taxes that get added on top of the inflated energy prices. Stagflation is an ugly situation.
Saskatchewan has a few advantages. The crown corporations are inefficient beasts with lots to criticize but they can smooth out price spikes because the government knows energy poverty would be an election issue. Our SaskEnergy crown stores natgas in caverns so they’re less susceptible short term supply issues (but growing natgas power generation is a growing demand on cavern reserves). On the Saskpower side, coal plants are still the primary power source and the coal is locally sourced. Not a lot of that coal is exported because the lowish quality lignite in the province is not in high demand. Between coal, natgas and hydro power production I think Saskenergy and Saskpower should have minimal price increases but it’s just my opinion.
I’d be a lot more worried about the food supply if I were young. “Camp of the Saints” may turn out to be a how to not a cautionary tale. Seven billion people on Earth and enough food for six billion? Even I can do the math.
These realities tend to have a good track record regarding policy.
JT and his anti-resource energy ideology may be setting the stage for a wild swing in the other direction.
With national bankruptcy looming the bond holders may not give politicians much choice.
Sure is good thing Canada has hundreds of years of potential energy supplies. Now if only someone knew how to extract it and use it.
I bet the Chinese will find a way to extract it. But not until they own it.
Hug a tree for warmth.
You can’t cut it.
Meh. Come winter, the Branch Covidians who partook in the holy vaxxine sacrament will be dying in job lots, cutting down on demand. It’ll balance itself, Trudeau-style.
I wonder how the hospitals will cope with all the non-vaxxed people being fired.
The Oil and Gas sector has been repairing their balance sheets rather than spending a shitload on cap-ex with all the cash flow they currently enjoy. They learned along with OPEC what over-supply does to the bottom line. This sector is in similar condition to the Tobacco industry 30 years ago (hated, boycotted, shunned and persecuted which discouraged new supplies while the market demand continued unabated). What’s different with Oil and Gas is that everyone on the planet living above the standard of sub-Saharan tribesmen depends on it and will until replaced with nuclear power or other high density reliable energy sources. The Canadian junior stocks are still potential doubles within a year (even after doubling or quadrupling in the past year and a half). Don’t take your investing advice from the Spawn or his heir apparent – Carney, (Bojo or Biden)! The whole world wants real energy and needs it to survive.
The OPEC gas price crisis happened too long ago for many to remember.
Some of us may even need to be reminded.
It appears that we all need to experience an(other) energy supply shock.
As a herd we need to learn that energy doesn’t come from the power company on demand or from the gas station when you drive up – nor from the cord when you plug your Tesla in. We need to learn that the world does not run on pixie dust and unicorn farts. Only then can we move on in the real world.
Bring it on!
rroe, in 2014 gas reached 1.41 a liter in Ontario. Never mind going back to the peanut farmers presidency.
I hear you very old white guy. High prices for gas are painful.
With the constant attacks on the carbon economy all energy prices will become painfully high and for a sustained period. Until the herd learns.
We pay the price for not educating our children and our newly arrived Canadians who do not have a historical (dare I say systemic?) knowledge of what is necessary to develop, sustain and maintain an industrial economy.
Unfortunately, the only way I see out of the issues that we face is for us to suffer a decline in our lifestyle.
As long as Canada can still borrow, government recipient addicts won’t change their attitude.
A Tesla Model S with a 100 kWhr battery would have cost $399 CND to charge at the peak electric prices in England a few days ago. (2,300 GBP / MWHr from BlazingCatFur) Under ideal conditions you get about 600 km of range. That works out to a cost of $67 per 100 km. At more normal pricing of 15 cents/ KWH it would be $2.50 per 100 km. My car gets about 6 L/100 km at $1.30 a liter is $7.80 per 100 km.
Querty, The plan is to ensure in the future, that only the wealthy can afford the only type of personal vehicle still available for purchase, an EV. Beyond that, if you can still somehow get ownership of one, you will not be able to afford to keep it charged, unless, again, you are wealthy. Funny how that works eh? Only a bicycle or public transportation for the masses, as travel will be limited to the ruling classes. Now don’t forget to lift your hat and bow slightly when the rulers pass by, cuz if you do, you might have your social credit score lowered, or even your digital bank account might be frozen. OBEY!!!
l heard a lament from one in the oil industry lower prices were gonna be disastrous.
?
well for them maybe but what about the other 3,045,663 businesses in Canaduh could use cheaper energy?
fcuk. that selfish narcissist gene crops up everwhaaare. . . . .
Your political masters don’t want cheap oil and gas, they want it gone, They are responsible for making it expensive by subsidizing and legislating unreliables while screwing the oil and gas sector by landlocking them and driving away investors and financiers. The producers are in it to make money and they are currently making money, thanks to morons who support sociopathic politicians who pretend to be energy experts. I hope they make a shit-pot more money at the expense of such morons.
The Canadian government treats the oil and gas industry as an enemy. It does everything in its power to inhibit oil companies from expanding their operations or accessing their markets and then subsidizes its competitors to boot. Thus the oil industry needs higher prices to stay profitable. Those 3 million businesses you’re talking about need to go all electric and buy cheap solar and wind energy, right? If you look in the mirror you’ll see what’s wrong with this country..
If they can’t afford to pay what it costs to induce a white man to get oil out of the ground, those other businesses deserve to fail.
Cheap oil is what keeps China growing at eight percent. What do we get out of it? No. Let them go back to doing what they did for centuries—starve and freeze in the dark. And let “Central Canada” starve and freeze with them.
When you freeze to death, the “averages” will reassure you that you’ve done the right, moral and fatal thing; and all previous political reassurances from the politicians will be denied.
https://wattsupwiththat.com/2021/09/23/column-looming-european-energy-crisis-a-lesson-in-averages-that-wont-soon-be-forgotten/
A warning that will not be heeded.
https://wattsupwiththat.com/2021/09/21/suspend-climate-policies-and-cancel-cop26-to-save-britain-from-looming-energy-disaster/
The Winter of Everyone’s Discontent.
Good.