How Will Higher Fuel Prices Affect Different Parts of the World?
2021-10-25
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1Reports of higher energy costs are causing concern around the world as pressure increases on businesses and people who buy goods and services.
2The biggest shortage, the Associated Press reports, is a lack of natural gas in Europe.
3European countries import 90 percent of their supply.
4Much of it comes from Russia. European prices have increased by five times since the start of the year.
5Experts blame several events for the gas shortage.
6They say demand increased after coronavirus restrictions were lifted.
7They say the past cold winter reduced reserves.
8And the summer was less windy than usual, so less wind energy was generated.
9Europe's chief supplier, Russia's Gazprom, held back extra gas supplies during the summer to build up supplies in Russia.
10In addition to that, China's electricity demand has come back after the COVID-19 pandemic.
11China has bought up limited supplies of liquid natural gas, which is transported by ship, not pipeline.
12There also are limited plants to export natural gas from the United States.
13It is difficult to say how long higher fossil fuel prices will last, said Claudia Kemfert.
14She is an energy expert at the German Institute for Economic Research in Berlin.
15"The long-term answer that has to be taken out of this is to invest in renewables and energy saving," she said.
16Renewable energy comes from the wind and sun.
17The European Union's executive commission urged member nations recently to speed up approvals for renewable energy projects.
18The group said "clean energy...is the best insurance against price shocks in the future."
19However, some gas-dependent European industries are cutting back on manufacturing products.
20German chemical companies BASF and SKW Piesteritz have cut the production of ammonia, an important part of fertilizer.
21That caused a problem for Hermann Greif, a farmer in Germany's area of southern Bavaria.
22He said he could not buy fertilizer for his crops.
23"There's no product, no price, not even a contract," he said.
24"It's a situation we've never seen before."
25He said the situation might result in a smaller crop in the coming year.
26High energy prices already were hitting German farmers,
27who need diesel fuel to operate machinery and to keep animals warm, said Greif.
28He grows corn to make biofuel, or fuel made from crops.
29People in the northern part of the world are expected to face higher costs for heating this winter.
30That includes in the United States, where officials have warned home heating prices could rise as much as 54 percent.
31Governments in Spain, France, Italy and Greece have announced measures to help low-income households.
32The European Union has urged similar aid.
33Much depends on the weather.
34Europe's gas reserves are usually rebuilt over the summer.
35But now they are at unusually low levels.
36"A cold winter in both Europe and Asia would risk European storage levels dropping to zero," says Massimo Di Odoardo.
37He is with the research business Wood Mackenzie.
38That would leave Europe dependent on additional natural gas from a new Russian pipeline or on Russia sending more gas through pipelines in Ukraine.
39The new Nord Stream 2 pipeline beneath the Baltic Sea has not been approved in Europe.
40It may not begin operations until next year.
41Kemfert in Berlin said Russian suppliers' decision to sell less gas on the open market shows they want "to put pressure on the early certification of Nord Stream 2."
42In China, power cuts have followed increased prices for coal and gas.
43Electric companies in some parts of the country are limiting electricity.
44Factories in Jiangsu province and Zhejiang in the southeast temporarily shut down in mid-September.
45That could affect export suppliers.
46Chenchen Jewelry Factory is in Dongyang, a city in Zhejiang.
47The factory faced power cuts over 10 days, general manager Joanna Lan said.
48The factory makes hairbands, paper products and gifts.
49Eighty to 90 percent of its goods are for export to the U.S., Europe and other markets.
50Orders were delayed "by at least a week," Lan said. "We had to buy generators."
51The biggest city in the northeast, Shenyang, turned off streetlights and elevators and cut power to restaurants and shops a few hours a day.
52Jenny Yang is an energy market expert at IHS Markit.
53She said China's gas imports have jumped.
54However, increasing demand in Japan, South Korea and Taiwan also has helped push up prices around the world.
55In Brazil, higher gas and oil prices are a problem because a lack of rain has made hydroelectric dams less productive. That has made electricity more costly.
56Rosa Benta is a 67-year-old from Sao Paulo.
57She fears she will no longer be able to provide for her unemployed family members.
58"Several times, (energy company) Enel called me saying I had debt. I told them: 'I'm not going to stop feeding my son to pay you,'" Benta said.
59"If they want to cut the electricity, they can come."
60I'm Mario Ritter, Jr.
61And I'm Jill Robbins.
1Reports of higher energy costs are causing concern around the world as pressure increases on businesses and people who buy goods and services. 2The biggest shortage, the Associated Press reports, is a lack of natural gas in Europe. European countries import 90 percent of their supply. Much of it comes from Russia. European prices have increased by five times since the start of the year. 3Experts blame several events for the gas shortage. They say demand increased after coronavirus restrictions were lifted. They say the past cold winter reduced reserves. And the summer was less windy than usual, so less wind energy was generated. 4Europe's chief supplier, Russia's Gazprom, held back extra gas supplies during the summer to build up supplies in Russia. In addition to that, China's electricity demand has come back after the COVID-19 pandemic. China has bought up limited supplies of liquid natural gas, which is transported by ship, not pipeline. There also are limited plants to export natural gas from the United States. 5Europe pushes renewable energy 6It is difficult to say how long higher fossil fuel prices will last, said Claudia Kemfert. She is an energy expert at the German Institute for Economic Research in Berlin. 7"The long-term answer that has to be taken out of this is to invest in renewables and energy saving," she said. Renewable energy comes from the wind and sun. 8The European Union's executive commission urged member nations recently to speed up approvals for renewable energy projects. The group said "clean energy...is the best insurance against price shocks in the future." 9However, some gas-dependent European industries are cutting back on manufacturing products. German chemical companies BASF and SKW Piesteritz have cut the production of ammonia, an important part of fertilizer. 10That caused a problem for Hermann Greif, a farmer in Germany's area of southern Bavaria. He said he could not buy fertilizer for his crops. 11"There's no product, no price, not even a contract," he said. "It's a situation we've never seen before." He said the situation might result in a smaller crop in the coming year. 12High energy prices already were hitting German farmers, who need diesel fuel to operate machinery and to keep animals warm, said Greif. He grows corn to make biofuel, or fuel made from crops. 13Higher heating costs? 14People in the northern part of the world are expected to face higher costs for heating this winter. That includes in the United States, where officials have warned home heating prices could rise as much as 54 percent. 15Governments in Spain, France, Italy and Greece have announced measures to help low-income households. The European Union has urged similar aid. 16Much depends on the weather. Europe's gas reserves are usually rebuilt over the summer. But now they are at unusually low levels. 17"A cold winter in both Europe and Asia would risk European storage levels dropping to zero," says Massimo Di Odoardo. He is with the research business Wood Mackenzie. 18That would leave Europe dependent on additional natural gas from a new Russian pipeline or on Russia sending more gas through pipelines in Ukraine. The new Nord Stream 2 pipeline beneath the Baltic Sea has not been approved in Europe. It may not begin operations until next year. 19Kemfert in Berlin said Russian suppliers' decision to sell less gas on the open market shows they want "to put pressure on the early certification of Nord Stream 2." 20Electricity shortages hurt businesses, people 21In China, power cuts have followed increased prices for coal and gas. Electric companies in some parts of the country are limiting electricity. Factories in Jiangsu province and Zhejiang in the southeast temporarily shut down in mid-September. That could affect export suppliers. 22Chenchen Jewelry Factory is in Dongyang, a city in Zhejiang. The factory faced power cuts over 10 days, general manager Joanna Lan said. The factory makes hairbands, paper products and gifts. Eighty to 90 percent of its goods are for export to the U.S., Europe and other markets. Orders were delayed "by at least a week," Lan said. "We had to buy generators." 23The biggest city in the northeast, Shenyang, turned off streetlights and elevators and cut power to restaurants and shops a few hours a day. 24Jenny Yang is an energy market expert at IHS Markit. She said China's gas imports have jumped. However, increasing demand in Japan, South Korea and Taiwan also has helped push up prices around the world. 25In Brazil, higher gas and oil prices are a problem because a lack of rain has made hydroelectric dams less productive. That has made electricity more costly. 26Rosa Benta is a 67-year-old from Sao Paulo. She fears she will no longer be able to provide for her unemployed family members. 27"Several times, (energy company) Enel called me saying I had debt. I told them: 'I'm not going to stop feeding my son to pay you,'" Benta said. "If they want to cut the electricity, they can come." 28I'm Mario Ritter, Jr. 29And I'm Jill Robbins. 30The Associated Press reported this story. Mario Ritter Jr. adapted it for VOA Learning English. Susan Shand was the editor. 31__________________________________________________ 32Words in This Story 33reserves -n. a supply of something that is stored so that it can be used at a later time 34fossil fuels -n.(pl.) fuels (coal, oil, natural gas) which are formed in the Earth from dead plant and animal matter 35insurance -n. protection from bad things that may happen in the future 36certification -n. official approval to do something legally 37generator -n. a machine that produces electricity 38elevator -n. a machine used for carrying people and things to different levels in a building 39We want to hear from you. Write to us in the Comments section, and visit our Facebook page.