The race to reduce the use of fossil fuels sees the energy agendas of governments change with ever greater conviction and commitment, above all towards electrification, research and development of green and blue hydrogen, to produce less polluting fuel, as well as of renewable energies. And it is a race against time for compliance with the Paris Agreements and in view of the forthcoming COP26 meeting in Glasgow, which saw the preliminary meetings held in Milan under the siege of activists from all over the world. But in the meantime an energy crisis is spreading whose media emphasis becomes more and more suspicious for some diehards, and there is already talk of a plot to save a COP26 that may have already failed from the outset.
Energy transition and fuel shortage: is it a global crisis?
It all started with the observation of a complicated thermal year for the northern hemisphere as reported by the Australians on several occasions: low stocks, difficulty in finding ships for transport, the damage caused by hurricane Ida saw Asia and the USA run for cover on supplies, in a crucial period for the energy transition which has placed all the attention and diversification efforts towards liquid gas. Nor should the Baltic Dry Index be underestimated, which traces the trend in ship freight prices, which closed the week at record levels since 2008.
The demand for jet fuel has recovered almost to pre-pandemic crisis levels, and if OPEC and its allies managed oil supply and prices well in the most difficult period of the lockdown, it is now necessary to put a ceiling on prices that seem unstoppable configuring a real energy crisis for Europe but not only, as demonstrated by the case of the United Kingdom.
The United Kingdom is heavily dependent on natural gas supplies from Russia and Norway and the out-of-control jump in prices together with numerous bankruptcies in the chain of companies in the energy sector is affecting the country's industrial production, for which price tensions are join aftermath in the post-Brexit management especially for the entry barriers of foreign workers.
Another excellent victim of the energy crisis, together with India, is undoubtedly China closely linked to global supply chains, which had already badly digested the "belligerent" agreement and the interference generated by the so-called AUKUS between the US, the United United Kingdom and Australia, and is now pushing again on coal mines to avoid electricity rationing at factories. From the food industry linked to that of fertilizers whose prices are skyrocketing, up to the processing industry. And there are already fears for the Chinese technology industry in view of the early November appointments with Singles Day, the largest shopping day in the world, practically the version of Black Friday USA, which follows after only 15 days together with Cyber Monday. And that last year saw a record turnover recorded by Alibaba alone for over 74 billion US dollars compared to 38,4 in 2019!
Thus, as a result of these events, in the first week of October, the prices of natural gas futures for delivery in November jumped by 23% to 117 euros per megawatt hour (just six months ago prices were stable at 15 euros). . The pressure of energy prices creates tensions on inflation but above all fuels doubts about the forecasts of global growth already put to the test by the "bottlenecks" in naval supplies in many industrial sectors, from automotive to microchips. On 6 October, the Bloomberg Commodity index reached its peak for the last 6 years and only Putin's intervention, which reassured the markets on supplies, allowed prices to stabilize. The Russian President already grappling with a new growing wave of deaths from COVD19 has increased gas supplies but accused the European Union of lack of foresight both in storage and in signing contracts which in his opinion should consider a longer term and obviously the fears of a European energy crisis creep in as winter approaches, where one only needs to hope for a mild winter.
Concerned about high energy prices, the US is considering the possible use of strategic reserves as stated by Energy Minister Jennifer Granholm, but it is certainly not possible for the EU given that it imports 90% of the gas it needs, and two thirds of the oil from abroad. Thus the President of the European Commission does not send them to say when she replies to Putin that in any case "the future is renewables, and not gas".
And alongside Van der Leyen is the former German Chancellor Merkel to bring spirits back to dialogue by putting on the table the question of the North Stream 2 gas pipeline, a project opposed by the USA, which joins the northern coasts of Russia and Germany, allowing the at the same time the EU to be less dependent on the supplies that currently pass through Ukraine, with the approval of the USA. A western positioning, the Ukrainian one too close to the Russian borders not to represent a real thorn in Putin's side since the association agreement with the EU signed in 2017, after the Minsk II agreements of 2015. The spokesman of the Russian President Peskov he closed the verbal skirmishes by declaring, not surprisingly, that it will be precisely the commissioning of North Stream 2 that will allow gas prices to be controlled.
And the new frontier of hydrogen, a hope
Against the backdrop of a possible drama for the energy market, the hydrogen frontier seems increasingly present and close, also thanks to the announcement of the Norwegian company: Equinor Asa which has earmarked 12 billion US dollars of investment in research and development of 'green' hydrogen with a clear goal of reaching a market share of at least 10%, to begin with, by 2035.
In fact, the hydrogen race passes through a first phase which will see a larger production of hydrogen produced from water and renewable sources to then focus on the so-called blue hydrogen, composed of natural gas once the problems inherent in pollution have been reduced produced from its production exactly as for the extraction of natural gas.
Norway is currently the largest gas producing country in Western Europe and above all the key country for Great Britain and the European Union for LNG supplies beyond Russia. An excellent diversification opportunity that should make Europeans think.
Conclusions
In November in Glasgow at COP26, the twenty-sixth session scheduled under the auspices of the United Nations, with the joint presidency between Italy and Great Britain, the chess game of the century will be played and above all a balance sheet will be drawn with respect to the commitments of the Paris Agreements of 2015 towards total decarbonisation and the reduction of CO2 emissions to contain the rise in global temperatures.
The Guardian masthead and the usual indiscretions coming from the UN headquarters put the spotlight on the junction of voluntary national contributions and the new targets on which all countries will have to commit themselves in order not to risk sanctions within the next 5 years.
Avoiding procrastination by bypassing 2030, the key date of the famous 2030 Agenda on Sustainability, would help to give a strong and convinced response, but discontent is growing in the European Union. Not to mention the "Polish" rift on the primacy between national law and European law which should make us reflect on the allocation of European structural funds to countries that have never fully committed themselves to the euro, but have always and only exploited the Community table .
The last 5 years have been the hottest on Earth and COP26 remains the last chance to prevent this energy crisis from being underestimated or downsized and not being correctly considered as the start of an irreversible growth spiral of growing and by now evident costs of the effects of political neglect towards environmental protection.
