Prof. ST Hsieh
Director, US-China Energy Industry Forum
August 30, 2022
Mikhail Gorbachev, Soviet leader who helped end the Cold War, has died
PUBLISHED TUE, AUG 30 20224:54 PM EDTUPDATED 11 MIN AGO
The end of cold war meant the US became the only superpower in the world and communism was defeated. But the war in Ukraine started on February 24, 2022, and the rushed sanctions against Russia energy caused major energy crisis in Europe. The statement by a 57-year-old polish man: “I remember the communist times but it didn’t cross my mind that we could return to something even worse.” Who will be able to resolve this large scale “energy poverty?”
Coal has been a mainstay energy source for heating and power generations despite the crusade led by ultra-green elitists around the world to kill fossil energy for years. Their “keep it to the ground” movements damped investment on fossil energy worldwide. Unfortunately, major European nations, not just Poland, are rushing back to embrace coal. Threat of climate change by CO2 emissions is conveniently tabled because Europeans have to be warm and fed in the winters. How about the rest of the world?
French President Marcon is still insisting on “energy transition” for getting over this “energy crisis.” Good luck, soon winter will be the test!
The root cause of this energy crisis in Europe is the inept politicians rushed the sanction against Russian energy. So far, all EU nations and Britain are still following the US lead supporting Ukraine with massive financial aid and military equipment. As such the war in Ukraine has no end in sight yet. But is it sustainable?
European leaders now are forced to deal with this “house on fire” energy crisis because winter is about one month away. They do not have any capacity to deal with the war in Ukraine anymore but blaming every trouble they face now to Putin. But the “solutions” that they are contemplating such as capping power price are against free market principle. Even they can get through this winter, the damages to the European energy market might not be reversable. Fortunately, energy market is globalized already, Europe as a net energy importer is on the “receiving end” rather than who call the shots. This is the fundamental weakness for EU rushing to sanction Russian energy in the first place.
The intense challenges for these European leaders are, however, managing their limited energy supply with “pain-sharing” so that they do not face social unrest at home this winter. If they fail, chaos will not be news and governments may fall.
‘This is beyond imagination’: Poland homeowners are lining up for days, sleeping in their cars to buy fuel — and coal stocks are still white-hot due to the demand
Jing Pan Tue, August 30, 2022 at 7:50 AM·3 min read
It’s still summer in Poland. But winter is coming.
According to Reuters, outside the Lubelski Wegiel Bogdanka coal mine, people are lining up in their cars and trucks to stock up on coal.
Why? Because 3.8 million households in the country are relying on it for heating in the winter.
“This is beyond imagination, people are sleeping in their cars,” a 57-year-old man named Artur tells Reuters. “I remember the communist times but it didn’t cross my mind that we could return to something even worse.”
After Russia’s invasion of Ukraine, Poland and the European Union placed an embargo on the import of coal from Russia. Although Poland produces coal, the country largely leans on imported coal for much of its household heating.
Lukasz Horbacz, head of the Polish Coal Merchant Chamber of Commerce, tells Reuters that the embargo “turned the market upside down.”
“As much as 60% of those that use coal for heating may be affected by energy poverty,” Horbacz says.
Despite climate activists’ continued efforts to replace coal in power generation, the black sedimentary rock is still in demand.
Making a comeback
Poland isn’t the only country that’s using coal.
According to the International Energy Agency, coal consumption is set to increase globally.
“Based on current economic and market trends, global coal consumption is forecast to rise by 0.7% in 2022 to 8 billion tonnes, assuming the Chinese economy recovers as expected in the second half of the year,” the IEA says in a recent report.
“This global total would match the annual record set in 2013, and coal demand is likely to increase further next year to a new all-time high.”
The IEA notes that as the world economy bounced back from the COVID-19 pandemic, global coal consumption already rebounded by roughly 6% in 2021.
Analysts point out that the supply and demand dynamics for coal could lead to its glorious revival.
“Looking at the year ahead through the northern winter with gas prices in Europe and gas supply availability, countries are turning back to coal,” Shaw and Partners senior analyst Peter O’Connor tells CNBC.
“And supply [of coal] is tight. Why? Because nobody’s building capacity and markets will remain tight given the weather and COVID. So that market will stay higher for longer, probably well into the 2023 calendar year.”