Short of gas, wind, and power: How a perfect storm is roiling the world’s energy market – By Katherine Dunn (Fortune) / Sept 16 2021
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On Wednesday, two U.K. fertilizer plants announced they would be shutting down production indefinitely—citing not declining business or heavy tax burdens, but the cost of a precipitous rise in European gas prices.
The closures are a worrying sign that the knock-on effects of the European gas rally—the outcome of a perfect storm of hurricanes and stagnant wind farms, European climate policy and the COVID-19 pandemic—are spreading. Higher energy prices risk pushing up costs for everything from fertilizer—and, it follows, already soaring food prices—to transport, heating, and heavy industry, underlying already rising inflation and slowing down the global economic recovery. And while many of the factors are European-specific, low inventories and looming winter demand is causing hand-wringing from China to California.
The gas spike, too, carries a warning of things to come. Europe is ahead of the rest of the world in pushing forward renewable energy policy, and has a bloc-wide goal to reach net zero by 2050. That means it must also contend with a growing reliance on renewable energy—and whether that means, paradoxically, a growing dependence on gas.
