Europe Faces Catastrophic Energy Crisis Amidst Record High Prices of Natural Gas
- 17-Sep-2021 6:52 PM
- Journalist: Patrick Knight
Soaring Liquified Natural Gas prices in Europe and the UK, which tripled this year, have caused a serious energy crisis in these areas. The already high demand for natural gas got further heightened due to the recent fire breakout at a crucial electricity cable that serves as the power importing channel from France to Britain.
UK’s natural gas crunch is a part of Europe’s burgeoning energy crisis, the repercussions of which could be seen in the form of multiple fertilizer plant shutdowns. CF Industries Holdings, a major key player in the fertilizer industry, on Wednesday, closed two of its ammonium nitrate production facilities at Ince in Cheshire and Bellingham in Teeside, UK. Yara International has also curtailed the production at its ammonia plants at Norway owing to the shortage of natural gas feedstocks.
Apart from the fertilizer industries, other industries are also suffering heavily due to frequent outages. UK Steel had to go on to stop operations at peak electricity hours on account of surging energy prices in the market. The timing for this crisis is also adding to the continent’s growing worry as time is continuously dissipating to allow Europe to fill sufficient energy stocks before the arrival of windless winters when other sources of energy generation would not be feasible.
Natural Gas, composed of methane and other higher alkanes, is a non-renewable fossil fuel that is responsible for running every household and industry. It is the energy source for electricity generation, cooking, and heating. It is also used as a raw material for the manufacture of fertilizers, plastics and other industrial chemicals.
As per ChemAnalyst, the natural gas market is facing significant supply-demand tension owing to the COVID19 impact in the previous and the running year. The post-COVID revival of production facilities in most of the countries has led to a sudden surge in the natural gas demand that has led to an increase in its prices.
With the current supply crunch in the European region, almost all the sectors (ranging from petrochemicals, fertilizers, mining, construction, pharmaceuticals to domestic functioning) will get affected owing to power outages and low productions. As a potentially larger impact, the soaring energy prices will be passed on to the consumers in the form of mounting inflation rates of various commodities. However, an urgent and appropriate government intervention might cap the rising prices and contribute to economic recovery.