Europe’s failed renewable energy policies, the shuttering of nuclear power plants, sanctions against Russia and its energy exports via Gazprom’s network of natural gas pipelines, and worsening inflation due to higher energy prices has created a situation so dire that some Europeans are being advised to burn wood, prioritize coal, and petroleum derivatives to stay warm this winter and not freeze to death.
Germans will have to burn wood to stay warm this winter, warns Deutsche Bank… “German households will be forced to heat their homes with wood instead of gas as Russia turns off the taps. Global shortages of gas worsened by Russia’s war on Ukraine have sent prices soaring… ‘In addition, substitute gas by other energy sources (hard coal, lignite, wood in private households, switch to oil derivatives in industry, etc.) to lower gas demand’… The supply crisis threatens shortages and blackouts this winter and could push countries including Germany into recession.” – The Telegraph, July 2022
In Poland, where coal is king, homeowners queue for days to buy fuel… “‘This is beyond imagination, people are sleeping in their cars. I remember the communist times but it didn’t cross my mind that we could return to something even worse.’ Artur’s household is one of the 3.8 million in Poland that rely on coal for heating and now face shortages and price hikes, after Poland and the European Union imposed an embargo on Russian coal following Moscow’s invasion of Ukraine in February.” – Reuters, Aug. 27
While Biden campaigned in Pennsylvania this week to ban semi-automatic firearms in the U.S. and ridiculed the second amendment by claiming citizens need F-15s to crush government tyranny, folks in Europe are on the precipice of recession, food insecurity, and a winter to remember that’s reminiscent of what peasants endured in the Dark Ages. It will literally go dark in some regions due to blackouts from the lack of modern energy resources, indefinite oil and natural gas pipeline shutdowns, and plans by the lords to conserve electricity. The president of France took the lead and blamed Russia for his campaign to turn off street lights across Europe and conserve power.
President Macron Announces Street Lights Will be Turned Off in Response to Energy Crisis… “Macron made the comments during a televised interview to commemorate Bastille Day… Asserting that ‘it will be very hard’ for French people due to the war in Ukraine… French citizens are being told to engage in energy ‘sobriety’ and prepare for even higher food prices… ‘From now on, I will ask public bodies, and all companies that can, to consume less… We have to prepare for a scenario in which we have to give up Russian gas completely,’ he added… Cities across Germany are also planning to use sports arenas and exhibition halls as ‘warm up spaces’ this winter to help chilly citizens who are unable to afford skyrocketing energy costs.” – Summit News, Jul. 15
An oil worker summed up the lords hypocrisy in energy policy from a U.S. perspective:
Oil worker slams Biden’s student loan handout… “‘They’re trying to buy as many votes as they can with taxpayer dollars, and they don’t really care about the working class, they don’t care. They don’t even care about the students. If they truly were going to help these kids, then they would change the cause of all this debt… Biden himself has never actually had a real job other than being part of government… What they don’t understand — the real hypocrisy is they don’t understand what the energy industry, as far as hydrocarbons, whether it’s crude oil, natural gas, coal, whatever it is, as far as energy, they don’t really know how it works.’ He added that traditional fossil fuels are still crucial to maintaining Americans’ quality of life and are often taken for granted.” – Fox Business, Aug. 31, 2022
Europe’s Return to the Dark Ages This Winter – Tucker Carlson, Aug. 29
Euro zone inflation hits another record of 9.1% YoY as food and energy prices soar… “It is the ninth consecutive record for consumer price rises in the region, with the climb starting in November 2021. Headline inflation was 8.9% YoY in July… Energy had the highest annual inflation rate at 38.3%, food, alcohol, and tobacco were up 10.6%, non-energy industrial goods such as clothing, household appliances, and cars were up 5%, while services were up by 3.8%.” – CNBC, Aug. 31
The Harmonised Index of Consumer Prices (HICP) is used to measure consumer price inflation in the euro area by tracking the price of consumer goods and services purchased by households. It’s “harmonized” because all countries in the European Union follow the same methodology. As cited in the CNBC article above, the HICP for Europe overall in August was 9.1% YoY. Individual country data varies widely. Notable are Poland with 16%, and Statistics Netherlands (CBS via HICP methodology) at 13.6% along with its energy and motor fuels sector up a staggering 88.2%.
Netherlands manufacturing output prices up almost 28%… “Since July 2021, the increase in manufacturing output prices has been unprecedented. The war in Ukraine has put additional pressure on prices, on top of the price increases due to the rapid economic recovery immediately following the coronavirus crisis.” – Statistics Netherlands, Aug. 30
Putin Knows What He’s Doing in Energy – S&P Global’s Dan Yergin on CNBC, Jul. 22
EU in Recession, Oil Prices Higher by End of 2022 – Dan Yergin on Squawk Box, Aug. 31
Russia Confounds the West by Recapturing Its Oil Riches… “Moscow is raking in more revenue than ever with the help of new buyers, new traders and the world’s seemingly insatiable demand for crude. Russia pumps almost as much oil into the global market as it did before its invasion of Ukraine. With oil prices up, Moscow is also making more money. Demand from some of the world’s largest economies has given Russian President Vladimir Putin the upper hand in the energy battle that shadows the war in Ukraine, and has confounded the West’s bid to cripple Russia’s economy with sanctions.” – WSJ, Aug. 29
China Increases Russian LNG Imports, Reselling to Europe… “China, as the largest purchaser of liquefied pure gasoline, has been selling what the Financial Times reports as ‘surplus LNG’ cargoes because of ‘weak power demand at residence,’ resulting in Europe’s imports of LNG growing by 60% through June, analysis agency Kpler figures show.” – NewsMax, Aug. 31
Peruse an extensive Twitter thread by Crab Man and see the personal stories on how devastating the current inflation wave is for small business and citizens in Europe. One example is Geraldine Dolan who owns Poppyfields Cafe in Athlone, Ireland with a story that went viral as pubs brace for mass closures due to soaring energy prices.
Athlone cafe owner shocked after getting electricity bill: ‘Things are only going to get worse’… “Cost of energy needed to run small midlands cafe has climbed by more than 250% in less than 12 months… The owner of a small coffee shop in the centre of Athlone was shocked when she opened her electricity bill this week and realized she had been charged almost €10,000 for just over two months of energy usage. The cost of electricity to the Poppyfields cafe for 73 days from early June until the end of August came in at €9,024.70. That doesn’t include the €812.22 in VAT, which brought her total bill to €9,836.92… ‘We will pay this bill because we have used the electricity, but we would not be able to pay at that level every two months.’” – Irish Times, Aug. 30
Energy Crisis Will Hit Pubs Harder Than Lockdowns, Say Industry Bosses… “Pubs will have no other option but to close owing to ‘out of control’ energy bills, with upwards of 300% price hikes, UK brewery and pub bosses have warned. Leaders of six of the country’s largest breweries and pub businesses involved in the British Beer and Pub Association (BBPA) are pressuring the government to take immediate action. Some English pubs date as far back as the 8th century, having served beer through Viking raids, the Black Death, and the Second World War… The perfect storm of surging commodity prices, a doubling in the cost of malt, as well as CO2, gas, and energy costs tripling since 2019, which Paul Davies, CEO of Carlsberg Marston’s, said will be a ‘crisis far graver than that which we faced during the COVID lockdowns.’” – Epoch Times, Aug. 30
All Europeans are suffering, especially folks on a fixed income or pension as discretionary income is wiped out by inflated energy bills and everyday necessities.
Nearly three-quarters of state pension will be swallowed up by energy bills next year… “Pensioners face ‘terrifying’ winter as latest price cap predictions suggest annual gas and electricity fees could hit £7,000 and wipe out nearly three-quarters of their annual state pension… Higher energy bills often hurt pensioners significantly more than the rest of the population because they spend a greater amount of their income on heating their home… Four in 10 people over the age of 66 rely on the state pension as their main source of income.” – Daily Mail, Aug. 28
European energy costs have surged with record rallies in natural gas as Russia curbs pipeline supplies to “unfriendly” countries that refuse to pay for gas in rubles. Hydropower supply is also scarce due to the worse drought in 500 years, and nuclear power station shutdowns that were in motion before the pandemic and Ukraine war are contributing to Europe’s dependence on depleted inventories of natural gas. The confluence of crises guarantees hardship across Europe this winter no matter what governments do. Resorting to the money printing press will only worsen the situation.
European Energy Soars as Pressure Mounts on Leaders to Ease Pain… “European energy extended its blistering rally as the worst supply crunch in decades heightens pressure on politicians to do more to rescue industries and households.” – Bloomberg, Aug. 25
Soaring prices for fuels create higher levels of inflation, it undermines the euro currency, and disrupts the manufacturing industry. As Europe trends into recession this fall and winter and politicos fail to mitigate the energy crisis, it heightens the threat of social unrest and political upheaval as blackouts arrive, folks freeze in their homes, and families are unable to afford basic necessities amid food insecurity with regional famines around the world.
Kyle Bass: “These policies are going to end up starving the poor children of the world and killing many of them…I can’t believe it’s not on the front page of every paper, every day.” – CNBC Market Alert via Will Hild, Aug. 30, 2022
Higher gas prices deepen Europe’s fertilizer crunch, threaten food crisis… “Europe’s fertilizer crunch is deepening with more than two-thirds of production capacity halted by soaring gas costs, threatening farmers and consumers… Fertilizer companies are being especially affected because gas is both a key feedstock and a source of power for the sector. Wholesale fertilizer prices, which fell back after climbing to multiyear highs following Russia’s assault, are rising again as European Union producers curb capacity… ‘We are extremely concerned that as prices of natural gas keep increasing more plants in Europe will be forced to close,’ said Maximo Torero, chief economist at the United Nations Food and Agriculture Organization. ‘This will switch the EU from being a key exporter to an importer, putting more pressure on fertilizer prices and consequently affecting the next planting season.’” – Business Standard, Aug. 27
Food bank users ‘asking for non-cook food because of energy cost fears’… “The cost-of-living crisis has seen a rise in food bank users, as shop prices rose by a record 5.1% in August, according to the latest report by the British Retail Consortium. This, combined with a huge surge in energy bills, has led to an ‘unsustainable situation’, Ian Oulton, a trustee of West Cheshire Foodbank, said. Mr. Oulton claimed the charity is seeing a 70% increase in use compared to pre-pandemic levels… He added: ‘The majority of people coming here are working people. People with full-time jobs are now requesting non-cook food because people can’t afford to put the oven on.’” – Evening Standard, Aug. 31
Nigel Farage Clashes w/Together Against Sizewell Nuclear Power Campaign – GBNews, Aug. 31
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