Thursday, July 28, 2022

"We Are Going To See Energy Prices Go Absolutely Nuts This Winter As We Face A Global Economic Crisis"

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"We Are Going To See Energy Prices Go Absolutely 
Nuts This Winter As We Face A Global Economic Crisis"
by Epic Economist

"The United States is facing a historic energy supply shortage, and a total cut-off of Russian gas is threatening to create a severe energy crunch that will have enormous consequences for the entire world. But even before the Russia and Ukraine crisis broke out, the whole planet was already moving towards a major energy crisis, and now we’re being told that countless people in the western world will experience a really cold and harsh winter, and confront some of the most expensive prices in history.

Russia is weaponizing energy supplies in retaliation for western sanctions. On Monday, Moscow announced another supply cut to the European Union, triggering panic in western markets over potentially severe gas shortages heading into winter, according to US officials. European officials argue that it is only a matter of time before Putin decides to cut off nat gas supplies completely. Last Wednesday, an energy rationing plan for the member states of the European Union was introduced. The plan sets a target for the 27 member states to reduce their gas demand by 15%. However, experts argue that this plan won’t be easy to enforce, and even if all of the member states meet their goals it still won’t be enough if the Russians stop the flow of gas entirely.

That leaves America in a very critical position. The U.S. has already been ramping up natural gas exports to Europe in an effort to ease the disruptions caused by this crisis, but that is shrinking In fact, one U.S. official has openly admitted that this will result in a dramatic increase in energy prices in the coming months. In some markets, new rate hikes are simply shocking. For instance, in New Hampshire, Eversource is raising its energy supply rate by about 50% on Aug. 1. “With customers using, on average, 25% more energy in the summer, a typical customer could expect to see a $70 monthly increase,” the utility said. On top of that, the energy service rate for New Hampshire Electric Co-op will go up 77%, Liberty Utilities will jump 100% and Eversource’s rate will rise by 112%.

This means that the rest of the country will soon face similar rate hikes. Needless to say, many Americans aren’t ready to see their power bill soar into the stratosphere. Looking ahead, authorities expect conditions to deteriorate even further, especially considering that the U.S. is already in a recession. The IMF is actually warning that the entire world could soon follow, noting that risks keep piling up. In a report released last week, the International Monetary Fund lowered its world economic forecast as it predicted major slowdowns in the three biggest economies: the United States, China, and Europe.

Unfortunately, there isn’t any short-term help on the horizon, and if we continue on this same path the new global energy crisis is just going to get worse and worse. By the winter, the global energy supply shortage may have evolved into a global energy nightmare of unprecedented proportions. So let’s enjoy this relatively quiet summer while we still can because all evidence is suggesting that a very dark winter is coming."

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