“‘Houston, we have a problem’ – Energy industry grapples with climate fight… Top global energy executives and officials on Monday grappled with how to transition the global economy from fossil fuels to renewables quickly enough to prevent climate disaster without disrupting strategic oil and gas supplies.
“”Houston, we have a problem,” two top executives told some of the most powerful figures in global energy in the capital of the U.S. oil industry, using the same famous line from an astronaut in the damaged 1970 Apollo 13 spacecraft…
“U.S. energy envoy Amos Hochstein said the hardest part of the energy transition was coordinating the timeline for change.
“”I think if you’re going to go through the greatest transformation that the world has seen in over 100 years, of unplugging from one energy system and creating a whole other one, you can’t just do it without planning it out,” Hochstein said.”
“Energy Shortages Are Set To Persist Through 2023.
“Energy shortages are likely to persist this year in various parts of the world because of project delays resulting from continued supply chain challenges – the legacy of the pandemic lockdowns – as well as lower Russian gas supplies to Europe and extreme weather.”
“U.S. Official Calls For Higher Global Oil Production.
“While oil prices have fallen significantly in recent months, prices remain higher than they were before the pandemic. The biggest problem for global oil markets appears to be a lack of spare capacity, and the U.S. is also struggling with very low strategic reserves.”
https://oilprice.com/Energy/Energy-General/US-Official-Calls-For-Higher-Global-Oil-Production.html
“The three-month London interbank offered rate for dollars, a major global lending benchmark, surpassed 5% for the first time in more than 15 years on Monday.
“Much of the recent surge in Libor, which is set to be phased out on June 30, has been driven by expectations for Federal Reserve policy tightening.”
“One of the bond market’s most reliable gauges of impending U.S. recessions plunged further below zero into triple-digit negative territory on Tuesday after Federal Reserve Chairman Jerome Powell pointed to the need for higher interest rates and a possible reacceleration in the pace of hikes.
“The widely followed spread between 2- and 10-year Treasury yields plunged to minus 104.6 basis points… and headed for a level not seen since Sept. 22, 1981…”
“Interest rates predicted to rise putting further strain on [US] borrowers…
“As rates have increased, so has the cost of borrowing. According to Bankrate’s national lender survey, personal loan rates have shot up to an average of 10.72 percent and HELOC rates are edging up to 8 percent, with the average sitting at 7.83 percent. Experts agree that the Fed is poised to raise rates again, further tightening the strain on borrowers’ wallets.”
https://finance.yahoo.com/news/interest-rates-predicted-rise-putting-174436336.html
“Private mortgage risk flagged by regulators amid growth in shadow banking [Canada]…
“Private non-bank mortgage loans that often come with higher lender fees and interest-only payment options are taking a growing share of residential real estate lending in Canada, a trend that is poised to continue or even accelerate amid rising interest rates and tougher mortgage qualification rules.”
https://finance.yahoo.com/news/private-mortgage-risk-flagged-regulators-120016149.html
“‘I can’t afford to leave’: The women trapped in unhappy marriages due to the cost of living [UK].
“Our mortgage has just increased by £350 a month’ says Stacey,* from Leicester. ‘I was secretly saving up money so I could leave my husband, but it’s a lost cause now.’ At the start of last year, Stacey, 42, was ready to call it quits on her marriage to husband, Dev*… But then, the cost of living crisis hit – and everything changed.”
“Most English councils plan to use maximum tax hikes alongside cuts in ‘desperate measures’ to avoid bankruptcy.
“A report found that nine in ten local authorities will increase council tax, or hike charges on waste or parking. The majority of councils surveyed will cut spending on services…”
“North Sea drilling rig firms have written to hundreds of UK and Scottish politicians, warning of an “energy supply catastrophe” if investment decline in the sector isn’t stopped.
“The International Association of Drilling Contractors (IADC) North Sea chapter has sent a letter to all 650 MPs and 129 MSPs urging them for “more vocal support of our oil and gas industry” ahead of the Spring Budget next week.”
“Brussels pushes for EU energy cuts and long-term business contracts.
“Brussels plans to require EU governments to set electricity reduction targets and provide guarantees for long-term business contracts, as part of reforms to the bloc’s power market after the energy crisis.”
https://www.ft.com/content/d8807b84-3357-4391-8fb9-196dac6f24d1
“Belgian firefighters storm European Commission building during demonstration.
“Police managed to block them in the security lobby and used tear gas to push them back… Firefighters from all over Belgium took to the streets of Brussels on Tuesday to protest their current working conditions and the government’s plans to reform the pension system.”
“French oil refineries blockaded as 1 million protest against pension reforms.
“Oil refineries across France were blockaded Tuesday by workers taking part in a 1-million-strong protest against government plans to raise the retirement age. Mass strikes also left thousands without electricity and disrupted schools, airports and trains as the country’s biggest union CGT urged people to “bring France to a halt.””
https://edition.cnn.com/2023/03/07/economy/france-pension-reform-strikes/index.html
“The French government said Monday that it had made a deal with major retailers to cap many food prices, in a bid to make inflationary pressures easier to bear for consumers.
“Retail groups would cut prices for a wide range of foodstuffs, the choice being left to their discretion, “to the lowest possible level” until June, Finance Minister Bruno Le Maire said.”
“Greece faces a fresh round of mass strikes and nationwide protests on Wednesday as anger mounts over the country’s worst rail tragedy that killed 57 people last week.
“Fourteen people remain in hospital after a freight train crashed head-on with a passenger train, carrying mostly students, near the central city of Larissa on February 28.”
https://www.france24.com/en/live-news/20230308-greece-faces-fresh-strikes-protests-over-rail-crash
“Police use water cannon in Georgia to disperse protests at ‘authoritarian’ law.
“Police in the former Soviet state of Georgia have used water cannon and teargas in an attempt to disperse thousands of people who rallied on Tuesday night after parliament gave its initial backing to a draft law on “foreign agents” which critics say represents an authoritarian shift.”
“China Jan-Feb trade slumps again as global demand falters.
“China’s exports for the January-February period fell, pointing to continued weakness in foreign demand and backing government concerns that a global slowdown will hamper the country’s recovery from pandemic-era damage.”
“Taiwan exports drop for sixth straight month, led again by slow buying in China and Hong Kong…
“The global manufacturing hub for consumer electronics shipped US$31.05 billion worth of goods worldwide last month, according to Taiwan’s Ministry of Finance. That figure was down 17.1 per cent compared with February last year…”
“India Isn’t Immune to the Stagflation That Felled Its Neighbors…
“With investments also starting to slow from the high growth witnessed earlier during this fiscal year, the outlook for domestic demand has turned weak. Not much help is expected from the global economy. Financial conditions are tight almost everywhere, and demand tepid.”
“Pakistan’s Dystopian Warning to the World…
“[It] presents a dystopian vision of the future, bankrupt, unstable and threatened by climate catastrophe. Its fate offers a warning to other heavily indebted nations on the precipice, from Sri Lanka to Zambia… Pakistan is due to hold elections no later than October, and political jostling is narrowing the nuclear-armed nation’s options.”
https://www.bloomberg.com/news/newsletters/2023-03-07/pakistan-s-dystopian-warning-to-the-world
“Afghan women protest outside Kabul University as male students return to class.
“Young Afghan women gathered outside Kabul University on Monday to protest the ruling Taliban’s ban on female education as their male peers returned to school for a new academic year and the United Nations heard the restriction may amount to a crime against humanity.”
https://edition.cnn.com/2023/03/06/asia/afghanistan-university-women-protest-intl-hnk/index.html
“Protests in Iran over wave of suspected poison attacks on schoolgirls – video report…
“Hundreds of girls in schools across Iran have fallen ill in suspected poisoning attacks, sparking further protests in a country that has been convulsed by unrest since the death of Mahsa Amini in police custody in September. Regime critics have blamed the apparent attacks on an extremist response to the Amini protests…”
“‘Financial regime is over’: Acute economic crisis forces people to commit suicide in Lebanon.
“Lebanon’s Economy Minister earlier this month admitted that his office can do little to curb the country’s falling financial situation. The prevailing economic crisis in Lebanon has forced more than 80 per cent of its population to slip into poverty…”
“Tunisian Banks Face Liquidity Risks from Delayed IMF Deal.
“Banks in Tunisia face heightened liquidity risks due to the country’s delay in reaching an agreement with the IMF Executive Board on a 48-month programme worth USD1.9 billion, Fitch Ratings says. The delay also brings banks’ insolvency risk closer to sovereign risk in a potential sovereign default scenario.”
“Morocco requests $5 billion loan from the IMF.
“The International Monetary Fund (IMF) has agreed to a credit line for a total amount of $5 billion for Morocco for a period of two years. The agreement was signed by the Moroccan Ministry of Finance and IMF Managing Director Kristalina Georgieva.”
https://atalayar.com/en/content/morocco-requests-5-billion-loan-imf
“Chad: Fuel shortages likely in areas across country through at least mid-March.
“The Minister of Hydrocarbons and Energy previously asserted that fuel supplies would return to normal levels by late March 6; however, many petrol stations in N’Djamena and elsewhere in the country have since remained closed, and long lines have been reported at those still in operation.”
“Nigeria: Year-Long Fuel Scarcity Worsens as Motorists Sleep in Abuja Queues.
“There was chaos in most of the service stations in the heart of the Federal Capital Territory (FCT) as many frustrated customers eager to buy the product struggled to join the long queues stretching several kilometres, causing serious gridlock in the usual light-traffic Abuja roads at the weekend.”
https://www.arise.tv/nigeria-year-long-fuel-scarcity-worsens-as-motorists-sleep-in-abuja-queues/
“Kenya Faces Fuel Shortage Amid a Dollar Crisis.
“The scarcity of the commodity is attributed to a cashflow problem blamed on declining dollar supply… Already, there are reports of long lines at pump stations, with consumers rushing to get the commodity before pumps run dry.”
https://allafrica.com/stories/202303080080.html
“Malawi: Fuel shortages nationwide in early March.
“The Malawi Energy Regulatory Authority (MERA) has reportedly indicated that there is adequate supply. Despite this, long lines have been reported near petrol stations… The reason for the recent shortage is unclear, though it could be related to a shortage of foreign currency preventing the government from importing fuel.”
https://crisis24.garda.com/alerts/2023/03/malawi-fuel-shortages-nationwide-in-early-march
“Zimbabwe: Electricity Outages Cut Off Bulawayo Water Supply.
“Some residential areas have gone for more than two weeks without water after council disconnected supply citing current power outages. Only the city centre, mines and industrial areas have not been affected by the gruelling situation.”
https://allafrica.com/stories/202303070087.html
“Power ships in South Africa hit another roadblock.
“Karpowership, the Turkish company seeking to supply 1,220 megawatts of electricity to South Africa, had one of three appeals against adverse environmental rulings rejected, a person with knowledge of the matter said, potentially delaying a solution to the country’s power crisis.”
https://businesstech.co.za/news/energy/671071/headwinds-for-south-africas-floating-power-plants/
“South Africa’s economy shrank more than expected at the end of 2022 after being battered by rolling blackouts imposed by the Eskom electricity monopoly.
“Fourth-quarter activity in Africa’s most industrialised nation fell 1.3 per cent, from the previous three months, a period when breakdowns at Eskom coal plants forced power cuts almost every day…”
https://www.ft.com/content/c1168eef-2869-47b3-a597-471f485b7009
“Peru: 6 soldiers drown in river while responding to protests.
“Six soldiers drowned while trying to swim across a river in the Andes to reach a town where protests demanding the resignation of Peru’s president have turned violent, military officials said Monday.”
“23 protesters charged with domestic terrorism after fiery clashes at Atlanta’s ‘Cop City’ training [US].
“Felony state domestic terrorism charges have been filed against 23 protesters arrested in Atlanta on Sunday after allegedly hurling bricks, rocks, fireworks and Molotov cocktails at police officers near the site of a planned public safety training facility, police said.”
https://abcnews.go.com/US/dozens-arrested-fiery-clashes-atlantas-cop-city-training/story?id=97649479
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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Hello Panopticon
Yesterday the sixth national strike day already in France. There is a definite weariness about this protracted issue that is not really all that important. It is more like arm wrestling between the street and the Macronie… It was also rather lacklustre. By the Yellow Vests now four years ago. That was really something with months-long weekly fights, injuries and deaths, blockades and arson.
What is actually more interesting is the energy file France now faces.
Soon (matter of a few months) the construction of six new EPR plants and the upgrading of the ageing nuclear fleet by another 20 years must be decided. Thatv all in two phases until 2035 and then 2050.All that is now budgeted (very optimistically in my view) at over 100 billion.
It is expressly stated that this excludes from the calculations the costs of demolishing old power plants and the disposal and storage of radioactive waste. Moreover, there is no idea how EDF, that state-owned company is supposed to rake in the money. There is a proposal for a kind of Utilitypricing in which savings actually intended for social housing should now be deployed for a glorious nuclear reactor future.
Today came another kink in the works…. trouble again at a power plant. The electricity price immediately flew up by 9%. It really is a hyper-sensitive market at the moment in the EU. A snow shower and a few days of cold and everything goes haywire.
Then let’s drill in the North Sea for gas and oil 🙂 The North Sea has always been ‘ too expensive for the consumer, too unprofitable for the producer’. By the way, I thought the depletion of most fields had progressed to the point where the final end would be understood by now. By the way, the ‘fire letter’ said nothing about how and what then and how much would have to be invested….
https://oilprice.com/Energy/Energy-General/European-Energy-Prices-Spike-On-Cold-Weather-And-Nuclear-Power-Woes.html
Zip, North Sea oil production peaked in 1999 and his been falling pretty steadily ever since. There are still fields worth exploiting, like Cambo west of the Shetlands, as long as we can continue using ever more debt to paper over the affordability problem you mention (not very long, IMO!).
Was this the Nuclear power plant trouble you were talking about? “French energy group EDF has reported discovering a significant new crack in a cooling pipe at a nuclear power plant on the Channel coast, in the latest such incident to plague the energy sector.”
https://uk.sports.yahoo.com/news/frances-edf-reports-fresh-crack-103521993.html
…… It is a serious problem which affects its reactors”, reacted Tuesday 7 March on franceinfo Karine Herviou, the deputy director general of the Institute for Radiation Protection and Nuclear Safety (IRSN). The Nuclear Safety Authority (ASN) has asked EDF to revise its control strategy for corrosion problems in certain reactors, after the discovery of a major crack in a circuit at the Penly power station in Seine-Maritime.
“It is a particularly deep crack,” says Karine Herviou. “It is 23 millimetres in a pipe thickness of 27 millimetres. So we were quite close to a leak. This crack is located on the cooling circuit, responsible for injecting water into the reactor core in the event of an incident. The deputy director general of the IRSN specifies that if there had been a leak, it would have been limited to “the containment”. Karine Herviou added that “compensatory measures have been taken by EDF to detect these leaks as soon as possible, so as to stop the reactor immediately”.
Well lots of dark clouds in the skies for EDF…. Things are really not looking good for France’s nuclear future but no doubt they will throw their asses to the curb for that the lobby is too influential…. to give you an idea there are 220,000 people working directly in the sector and then on top of that you have that totally stalled billion dollar project in ITER with all sorts of new setbacks.
That’s what happens when people become sorcerer’s apprentices
https://www.francetvinfo.fr/societe/nucleaire/nucleaire-fissure-decouverte-a-la-centrale-de-penly-c-est-un-probleme-serieux-alerte-l-institut-de-radioprotection-et-de-surete-nucleaire_5698238.html
So much for emissions reductions. On the financial side, I see the US Fed has hiked rates again.
Our RBA is undergoing a formal parliamentary review of its functions, mandate etc soon. Probably as a sop to the public increasingly feeling the pain every day, and increasingly angry with small protests outside the RBA building.
The RBA only hiked 0.25 this round, followed with a (very) rare public announcement that if economic indicators hold, it “might” be time for a pause at their next meeting in April. Which I read as “calm down, its all under control.”
Saw a clip from the US senate hearings with the Fed being asked about keeping on tightening until enough businesses go broke and mass layoffs get high enough to “fix” inflation.
But somehow, I don’t think that classic orthodox economic textbook scenario will work this time around, as the root cause of the inflation is based in rising energy costs, not the usual wage-price spiral from an over-heating economy.
Zip, I was chatting with a French friend last night, she thinks the current protests are just symptomatic of generic anger at everything, cost-of-living, erosion of living standards etc including the erosion of social welfare. The announcement of a rise in retirement age is not that major in itself, just another spark among many, to ignite the underlying anger.
As you mention funding of nuclear energy projects, being taken from social housing programs? Methinx the Welfare State is dying all over the globe.
Hello Rain
Social unrest is always difficult to interpret anyway I think.
Of course, you can always say that ‘ things are getting worse and that’s why etc etc….’. That’s too easy and doesn’t actually say much.
There are numerous complex factors here in France that determine the almost annual discontent.
1.Four years ago the Gele Hesjes… very anarchic and chaotic without the support of the unions and the political parties who did not want to burn their fingers on it because there were very many ‘ far right and left elements’ pulling the cart of the weekly violence and that for months and months!
2.Now it is mainly the unions and especially the CGT the communist union that is driving the tempers week in and week out. Interestingly, they have a lot of support and following especially among privileged workers in transport and energy. That is where the blockades are, that is also where the most has to be given in in terms of exception measures.
The basic problem here lies in the way de Gaulle once organised the Fifth Republic, allowing the president, in this case Macron, to seize a lot of parliamentary power, even though no more than 24% of the population initially voted for his political movement (now party). This results in daily hassles and skirmishes inside and outside parliament, with errg give frustrated politicians on the right (Le Pen Zemmour) and on the left Melenchon and The Greens….
4.On the other hand, the state and government has a huge influence on everyday life. They subsidise everything from the pump to the shopping basket and have shares in really all major economic sectors and companies; They are shareholders in about 2,000 companies and thus share in the profit and loss accounts.
You could say it is an intermediate form between liberal capitalism and a state-led economy….
5.Hence the hold the government can have on the savings pots of the French…. they manage those and they determine the level of interest rates and it’s not about little euros…. It’s about hundreds of billions tied up. And the government is always coming up with new forms of savings because the French are a frugal people.
To give you an idea I myself have 6 different state savings bank accounts, one of which even pays out 6% at the moment.
Nice country though and I follow politics closely every day and write extensively about it daily with a large readership..
Rain, the Bank of England seems to issue alternating statements on potential interest rate hikes from doves and hawks, presumably to give the impression that all citizens are “being heard”… Of course to people like us it just reinforces the impression that they are up a gum tree!
I’m sure what your friend in France says is true. The original Gilet Jaunes protests were ostensibly sparked by a rise in fuel tax but were certainly rooted in much more complex and wide-ranging resentments.