Tag Archives: Energy prices

California’s High Power Prices Could Derail Liberal EV Dream, by Tyler Durden

What happens when the operating costs for electric cars are higher than those for internal combustion cars? You know what the answer will be. More subsidies for electric cars. From Tyler Durden at zerohedge.com:

California electricity rates are increasing far faster than the rest of the country. Last year, electricity prices rose 1.7 times faster than the rest of the county, and residential prices jumped 2.7 faster.

These increases are terrible news for residents who want to swap their combustion engine vehicles for electric ones.

Pacific Gas & Electric Co. (PG&E), Southern California Edison Co. (SCE), and San Diego Gas & Electric’s (SDG&E) exceptionally high power rates make charging an electric vehicle very costly and could soon be as expensive as filling up a combustion engine vehicle at the gas station, according to Environment & Energy Publishing.

“It’s a huge problem,” said Severin Borenstein, director of the Energy Institute at the University of California, Berkeley’s graduate business school. He said if people who embraced EVs begin to “tell their neighbors about their catastrophic electric bills” after charging up at home, “that’s gonna be a huge problem.”

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The end of fiat hoving into view… by Alasdair Macleod

Skyrocketing food and energy prices, rising interest rates, crashing financial markets, and economic depression will spell the end of Western fiat currencies. From Alasdair Macleod at goldmoney.com:

Tragic though the situation in Ukraine has become, the real war which started out as financial in character some time ago has now become both financial and about commodities. Putin made a huge mistake invading Ukraine but the West’s reaction by seeking to isolate Russia and its commodity exports from the global marketplace is an even greater one.

Furthermore, with Ukraine being Europe’s breadbasket and a major exporter of fertiliser, this summer will bring acute food shortages, worsened by China having already accumulated the bulk of the world’s grains for its own population. Inflation measured by consumer prices has only just commenced an accelerated rise.

Because they discount falling purchasing power for currencies, rising interest rates, and collapsing bond prices are now inevitable. Being loaded up with bonds and financial assets as collateral, the consequences for the global banking system are so significant that it is virtually impossible to see how it can survive. And if the banking system faces collapse, being unbacked by anything other than rapidly disappearing faith in them fiat currencies will fail as well.

Unforeseen financial and economic consequences

Back in the 1960s, Harold Wilson as an embattled British Prime Minister declared that a week is a long time in politics. Today, we can also comment it is a long time in commodity markets, stock markets, geopolitics, and almost anything else we care to think of. The rapidity of change may not be captured in just seven calendar days, but in recent weeks we have seen the initial pricking of the fiat currency bubble and all that floats with it.

This is turning out to be an extreme financial event. The background to it is unwinding of economic distortions. Through a combination of currency and credit expansion and market suppression, the difference between state-controlled pricing and market reality has never been greater. Zero and negative interest rates, deeply negative real bond yields, and a deliberate policy of artificial wealth creation by fostering a financial asset bubble to divert attention from a deepening economic crisis in recent years have all contributed to the gap between bullish expectations and market reality.

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Here’s How the Energy Crisis Turns Into Hunger and Then… War? By Chris MacIntosh

Most people don’t realize that petroleum prices feed into food prices. From Chris MacIntosh at internationalman.com:

Energy

We have previously warned about a whopping food crisis and supply problems in the fertilizer market. Well, now is worse because that was BEFORE we had the natural gas crisis. Why is that important?

Natural gas is THE critical input into making fertilizer. Urea is essentially ammonia in solid state, the process of which entails reacting ammonia with CO2. And we all now know — thanks to the climate nazis — that CO2 is currently the devil. The problem of course is that with no natural gas there is no urea, and with no urea there is no fertilizer. And with no fertilizer… well, we will eat each other.

Here are the spot urea prices.

Something else that we had noted some time back (in Korea) but which now seems like a larger problem.

Here is an article about an Australian farmer who warns the urea supply crisis could halt normal life within weeks.

Here’s what he says:

‘Not only will we not be able to grow cattle and we will not be able to grow food and we will not be able to grow grain or anything like that, but even if we could, we can’t move it, because we can’t turn a wheel in a truck because we have no Adblue,’ [AdBlue is needed for diesel vehicles — half of all trucks on Australian roads run on diesel

As of February we might not have a truck on the road in Australia, we might not have a train on the tracks.

‘So quite literally the whole country comes to a standstill as of February.’

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Europe: Non-competitive Power Prices Derail Growth, by Daniel Lacalle

There’s a lesson here for those the US economy can be burdened with energy mandates that make no economic or common sense. From Daniel Lacalle at dlacalle.com:

Despite an endless chain of monetary and fiscal stimuli, the Eurozone consistently disappoints in growth and job creation. One of the reasons is demographics. No monetary and public spending stimulus can offset the impact on consumption and economic growth of an ageing population, as Japan can also confirm.

However, there is an especially important factor that tends to be overlooked. The lack of competitiveness of the Eurozone industry due to rising and non-competitive power prices.

Residential electricity prices in the European Union between 2010 and 2014 averaged near $240/MWh, whereas the U.S. averaged nearly $120/MWh, or less than half of EU prices. Gasoline and gasoil prices were also twice as expensive in the average of the European Union compared with the United States (https://www.globalenergyinstitute.org/sites/default/files/2019-07/EU_Report.pdf).

This trend has not improved. In 2020, the average residential consumer’s electricity price in Europe showed an increase of 13% over the average price ten years before.

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