The world needs a long-term plan to avoid new energy crises

Many of the major problems in the energy sector that the world is facing last year’s struggles are likely to continue to darken economies in 2022, either because of the persistent catalyst – COVID-19, or because they are a by-product of complex long-term changes that are under way, such as the accelerated boost to the future with low levels of carbon emissions, writes the Nikkei Asia Review.

that the ability to avoid mistakes that threaten the security of energy supply or cause a prolonged jump in the price of key economic components such as fuel and electricity is extremely underdeveloped.

One clear lesson from last year’s painful energy shortages and rising prices, which have helped fuel inflation, is that global energy needs cannot be managed in the short term. . This obliges governments to critically review past decisions and prepare with more robust responses, strategies designed and implemented with sober consciousness, rather than through a scribbled footnote.

Energy crises the last three months of 2021, marked by a huge shortage of natural gas in Europe and coal in China, led to turbulence in electricity supply and rationing, which crippled a number of production activities in a few weeks. They also forced a number of utility companies to leave the business, which further increased end-user bills.

As desperate buyers in Europe and China paid the highest prices to acquire liquefied natural gas and coal from international markets, more price-sensitive markets in Asia had to either ‘sneeze’ more on liquefied natural gas imports or limit production.

China has patched up coal shortages by increasing production in local mines and limiting energy consumption by ending price controls and restrictions.

But Beijing’s promise to start gradually declining the use of coal by 2026 means that the country must start building a system of reliable and affordable alternative energy supplies in order to abandon its factories and power plants from fossil fuels. China’s slowing economy does not need more shocks in energy supplies, and regression to increased coal use, even for short periods, will undermine Beijing’s confidence in plans to achieve carbon neutrality by 2060

The European Union (EU) has provided temporary relief to consumers and companies by reducing taxes, reducing prices and increasing subsidies for the poor, even when the region is resorting to burning more coal and oil, for

Europe’s energy transition has become an obligation, with gas from Russia’s main supplier falling into a geopolitical hub and renewable energy proving unreliable, while the nuclear alternative in most countries is blocked by government regulations, policies and public prejudice.

But last year’s energy crisis is unlikely to be a one-off event and China it and Europe are not the only ones who may stumble again. The major transition in energy will bring down other countries from time to time, unless politicians start carefully detailing national energy transition roadmaps.

This should start with a comprehensive inventory of energy. current energy sources and consumption rates, taking into account projected growth in national fuel and electricity demand in the coming decades and implementing a fossil fuel replacement plan, taking into account the availability, costs and infrastructure needs of new energy sources.

In the meantime, we must stop blindfolded at the edge of the cliff, ensuring that the exploration of new oil and gas reserves continues until we can be sure that we have found reliable , affordable and adequate alternatives to cleaner energy.

As we will have to rely on oil and gas for most of our energy needs over the next few years Governments should ensure that companies looking for ways to reduce carbon emissions from the production, refining and transportation of liquid fossil fuels have adequate support and funding.

import-dependent countries are hoping for slightly lower oil prices in 2022, as growth in the number of COVID-infected people by 2021 gives way to more moderate consumption growth. OPEC also seems willing to continue phasing out production cuts despite projections of significant oversupply in 2022

But the US and other major consumer countries, including China and India, will they need to find a way to re-engage with OPEC +, while the latter would do well to be more sympathetic to the pain threshold for buyers when it comes to fuel prices.

If the United States and other like-minded people begin to routinely use their strategic oil reserves to cool prices because OPEC + is reluctant to respond to their demand to pump more oil, producers’ plans to rebalance the market could fail. At the same time, the depletion of strategic stocks only to cool prices in the absence of a real supply shortage must be carefully considered and a vulnerable solution to political abuse.

Finally, the President of The United States, Joe Biden, may need to stop hampering local oil and gas production through tighter shale regulation and restrictions on new exploration, not only in the interest of domestic prices, but also in terms of maintaining diversity in global crude oil supplies

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