The world is facing a global energy crunch caused by weather and a resurgence in demand, especially as winter approaches and more energy is needed to heat homes in the cooler parts of the planet.
Astronomical increases in natural gas prices, skyrocketing coal costs and predictions of $100 oil are all pointing to a looming energy crisis that governments will have to face.
Further complicating the picture is mounting pressure on governments to accelerate the transition to cleaner energy as world leaders prepare for a critical climate summit in November.
In Europe, natural gas ins now trading at the equivalent of $230 per barrel, up more than 130 percent since the beginning of September and more than 8 times higher than the same time last year, according to data from Independent Commodity Intelligence Services. The cost of natural gas is also rising in East Asia.
The frenzy to secure natural gas has pushed up the price of coal and oil, causing central banks and investors to worry as rising energy prices contribute to inflation which was already a major concern as the global economy is still trying to recover from the lingering effects of the COVID-19 pandemic.
The crisis is rooted in soaring demand for energy as economic recovery takes hold, complicated by an unusually long and cold winter that has depleted stocks of natural gas in Europe. The dynamics are reverberating globally as the energy crunch is causing oil prices to hit 7-year highs in the USA this week.
Prices haven’t been that high since 2014 and analysts say there is no immediate relief in sight. A severe winter will only make matters worse.
In the Philippines, we have seen fuel prices being hiked almost weekly and while energy prices have not yet shot up, we should be bracing ourselves for the worst case scenario. Electricity consumers of Negros Island have been treated to an example of how runaway energy costs can affect our lives last month when damage to a submarine cable caused electric bills to spike. If government cannot come up with a viable strategy to face the impact of a looming energy crunch, we may have to gird ourselves for higher electric and fuel bills as we wait for the global energy situation to ease.
A global energy crunch is out of our control. While we wait for our government and Department of Energy to respond and minimize the impact to Filipinos, we will still have to come up with our own strategies to conserve energy and further reduce consumption.*