Energy Prices: How a truck driver shortage in Europe can hit your wallet in the US

Europe has become the epicenter of a systemic energy crisis that has caused blackouts and shutdowns of factories there – but this is also affecting prices in the US. One example: the price of natural gas that heats half of US homes, increases by 180%.
Oil prices are also very high, thanks to production long depleted by OPEC and the United States. Analysts expect that gasoline prices will continue to rise.

What is happening? There are specific and complex reasons for the price hike.

CNN’s Julia Horowitz explains how many factors are involved They converged to create an energy crisis in Europe:
  • The cold spring depleted natural gas stocks.
  • Rebuilding supplies has been tough, thanks to an unexpected jump in demand as the economy recovers from Covid-19.
  • There is a growing appetite for LNG in China.
  • Russia is also supplying the market with less natural gas than it was before the pandemic.
  • Meanwhile, other sources of energy were less available, as cool summer weather cooled wind farms in the North Sea.
  • Countries are abandoning coal as pressure mounts to tackle the climate crisis.
  • Germany is also working to phase out nuclear power by 2022.

Countries like Spain and France are stepping in to subsidize energy bills.

No wonder US diplomats are raising their voices in disappointment with Russia’s plan to join Europe with a new pipeline that will make Russia a natural gas booster on the continent.

This is the path from coal-fired plants to your iPhone. CNN Written by Jill Desis About power outages in China.

“The world’s biggest polluter is trying to make good on a pledge that its carbon emissions will peak before 2030. This requires its counties to use less fossil fuels per unit of economic output, for example by burning less coal for power generation. At the same time, demand has soared. on goods made in China with the global economy emerging from the epidemic, and the result: there is not enough energy to continue.

The shortage of drivers may lead to the closure of gas stations. In the United Kingdom, where Prime Minister Boris Johnson was proud to take his country out of the European Union with his Brexit plan, they are now offering emergency visas to foreign truck drivers to keep gas stations open.

that they You may have to call the army To enter and drive trucks to fill dry service stations.

Don’t make fun of them for that. In the US, Massachusetts has mobilized the National Guard to help get kids to school because there aren’t enough bus drivers either.

What happened to the drivers? CNN Written by Liz Stark:

Data from the Bureau of Labor Statistics shows the number of drivers who dropped out at the start of the pandemic. Between March and April 2020, the trucking industry lost more than 88,000 jobs, and road and passenger transit lost more than 185,000 in that month alone.

One of the reasons Costco has once again limited toilet paper purchases is a lack of drivers.

When CNN wrote in May about the beginnings of a shortage of truck drivers, there was a suggestion that higher wages could actually be It has the opposite effect on drivers, who use pay to cut hours driving and get a higher quality of life from a stressful occupation that keeps them away from home.

The auto industry is worse off than we thought. Meanwhile, automakers around the world are still frustrated by the lack of microchips. Add it to a number of other deficiencies.

Chips “are just one of the many unusual disruptions the industry is facing — including everything from resin and steel shortages to labor shortages,” said Mark Wakefield, global co-head of automotive and industry practices at industrial consultancy AlixPartners, Chris Isidore told CNN Business. “There is no room for error for automakers and suppliers right now.”

Millions of cars are short. A shortage of parts will cause automakers to build 7.7 million fewer cars globally than they would otherwise make, according to AlixPartners.

This is a significant increase from the projected vehicle shortage of 3.9 million vehicles in May.

When will there be microchips? Isidore writes: “Microchip supply was widely expected to decline in the second quarter of this year, then begin to improve. But the surge in Covid-19 cases has caused a new round of shortages, with chip factories forced to shut down temporarily in some Countries that have been hit hard, like Malaysia.”

When do prices drop? This was written by Dana Peterson, chief economist at The Conference Board This inflation wave may last for a year.

“Yes, the intensity of price hikes slowed over the summer, but variable delta and turbulence risk another bout of consumer price hikes in the US in the fall. And even if it doesn’t, consumers are unlikely to see lower prices this year thanks to a shortage of computer chips, rising wage pressures With businesses reopening and rents rising again.”

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