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EsadeGeo Daily Digest, 15/09/2021

EsadeGeo Daily Digest, 15/09/2021

Financial Times – David Sheppard / Why Europe fears a gas crunch even before winter demand begins

  • Natural gas prices in the UK and continental Europe have soared to record highs because of tight supplies ahead of winter, raising fears of a severe economic hit to industry and weather-induced shortages.
  • Storage filling has not happened at the pace traders would have liked in 2021. Russia has been sending less gas to Europe, for reasons fiercely debated in the industry.
  • These range from Russia’s need to refill its own storage to suspicions that it is trying to pressure European governments, including Germany, to approve the start-up of the highly controversial Nord Stream 2 gas pipeline.
  • Europe has also been phasing out coal plants in recent years, limiting the opportunity to switch fuels when prices rise. The UK and parts of continental Europe are more reliant on wind turbines for electricity generation, but remarkably still weather in recent weeks has slashed wind’s contribution to the grid.
  • Politico – Zia Weise, Karl Mathiesen, America Hernandez and Aitor Hernández-Morales / Soaring power prices drive anxiety over EU climate plans

Bloomberg – Reed Landberg / U.K. inflation surges to its fastest in more than nine years

  • U.K. inflation surged more than expected to the strongest pace in more than nine years, prompting investors to anticipate a sharper increase in interest rates next year. 
  • Consumer prices jumped 3.2% in August from a year ago, the most since March 2012, after dipping back to the central bank’s 2% target the month before, the Office for National Statistics said on Wednesday. 
  • The ONS said that much of the increase is likely to be temporary. The strongest upward pressure came from prices charged by hotels and restaurants. That was heavily skewed by figures from last year when the government’s Eat Out to Help Out program led to large discounts across the sector. 
  • More enduring signs of inflation both in the cost of transport and those shouldered by manufacturers point to higher prices for raw materials and labor. That’s threating to overheat an economy that the BOE is stoking with 150 billion pounds ($208 billion) of asset purchases by the end of this year.
  • The Economist / America’s consumer-price inflation stays above 5% in August

The Washington Post – Scott Wilson and David Weigel / Gavin Newsom is projected to prevail in his effort to remain in office

  • Gov. Gavin New­som (D) was projected to defeat a recall campaign against him Tuesday thanks to a large Democratic turnout and broad fears within the state over the surging coronavirus pandemic.
  • Newsom rodea large Democratic turnout, which he and his proxies worked on ensuring for months in this very blue state. Even more important were public fears over the new wave of coronavirus cases. He has been among the most aggressive governors in the nation in demanding vaccinations and mask-wearing, policies his Republican rivals opposed.
  • The final results may not be known for days, even though the ballot comprised just two questions. The first was whether New­som, elected with nearly 62 percent of the vote in 2018, should be removed from office a year early.
  • The “no” vote against recalling Newsom was ahead by more than 20 percentage points as polls closed. Many of those votes were early mail-in ballots, which heavily favored Democrats.
  • The New York Times – Shawn Hubler / Newsom survives California recall vote and will remain governor

The Guardian – Damian Carrington / 90% of global farm subsidies damage people and planet, says UN

  • Almost 90% of the $540bn in global subsidies given to farmers every year are “harmful”, a startling UN report has found. This agricultural support damages people’s health, fuels the climate crisis, destroys nature and drives inequality by excluding smallholder farmers, many of whom are women.
  • The biggest sources of greenhouse gas emissions, such as beef and milk, received the biggest subsidies, the report said. These are often produced by large industrialised groups that are best placed to gain access to subsidies.
  • Without reform, the level of subsidies was on track to soar to $1.8tn (£1.3tn) a year by 2030, further harming human wellbeing and worsening the planetary crisis, the UN said.
  • Support for the “outsized” meat and dairy industry in rich countries must be reduced, while subsidies for polluting chemical fertilisers and pesticides must fall in lower-income countries, the analysis said.
  • Euractiv – Kira Taylor / EU considering sanctions on companies liable for environmental damage abroad

Today’s energy news:

The selected pieces do not necessarily reflect the views of Javier Solana and EsadeGeo. The summaries above may include word-for-word excerpts from their respective pieces.

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