Europe Faces Worst Drought In 500 Years As Energy Markets Are Headed For ‘Disaster’

Germany – the European Union’s wealthiest economy – especially has been feeling some of the worst it, as noted in different WinePress reports.

Indian-based outlet Wion displayed a handful of images and clips that depicts what they claim are “biblical scenes across Europe.” While Wion emphasized this had to do with climate change, the imagery and statistics reported demonstrate the level of drought that is occurring, and the subsequent dearth and energy problems it will cause, and a drastic slowdown in domestic shipping.

Watch the video below:

OilPrice.com explains more in detail what this drought is doing to the energy problems gripping Europe:

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Energy markets and nature seem to have it in for Europe. Record-breaking gas prices, rising coal prices, and droughts that interfere with electricity generation in some key markets have combined to push electricity contracts in the EU to record highs as uncertainty about the coming winter deepens.

Reuters reported earlier this week that a number of power forward contracts traded in the EU hit highs because of what increasingly looks like a perfect energy storm, affecting every energy source in one way or another.

A number of factors are adding up: The market is uncertain about whether (French utility) EDF will increase nuclear availability enough for winter, which explains the price differences between the two countries [France and Germany].

Rystad Energy analyst Fabian Ronningen told Reuters.

EDF has had to significantly reduce the capacity utilization rate of its nuclear power plants because droughts in France have reduced water availability for cooling the reactors. But the drought came on top of earlier problems: reactor corrosion that prompted the utility to close some of them earlier this year, effectively reducing the supply of electricity available for sale on the domestic or regional market.

Meanwhile, in Germany, wind output is low, and so is the water level of the Rhine—a key transport route for things like coal, for example. Germany’s economy is quite dependent on this crucial shipping corridor, but when the water level is critically low, shippers simply cannot load the usual volume of cargo, meaning that coal and other commodities are reaching their destinations in smaller mounts and more slowly.

The drought is also affecting hydropower output, adding to worries about future supply. Because of the drought, Norway, which generates more than two-thirds of its electricity from hydropower, announced it would curb electricity exports, threatening supply for other European countries at the worst possible time. In the UK, there’s talk about blackouts.

Meanwhile, Gazprom’s gas flows to Europe remain much lower than usual, with the Russian state major warning this week that gas prices on the spot European market could top $4,000 per 1,000 cubic meters. Recently, spot prices broke the $2,500 barrier.

European spot gas prices have reached $2,500 (per 1,000 cubic meters). According to conservative estimates, if such a tendency persists, prices will exceed $4,000 per 1,000 cubic meters this winter.

Gazprom said.

The European Union has been quick in switching from Russian gas to U.S. LNG amid the Ukraine crisis, but speed has not been enough: U.S. LNG export capacity is not limitless, and producers also have other clients, in Asia. As the winter season approaches, Asian buyers have become more willing to pay hefty premiums for any LNG, which has intensified competition for a limited number of LNG tankers.

No wonder, then, that electricity prices in some parts of Europe have hit records. Even less wonder that industries are beginning to buckle, per a recent Bloomberg report. The report noted that Germany’s year-ahead electricity contract rose to more than 530 euros per MWh earlier this week, which constituted a 500-percent increase over the past 12 months. No industry can absorb such a price shock unscathed, and German industry didn’t.

Germany had to pay the equivalent of more than $15 billion to bail out one of its biggest gas utilities, Uniper, earlier this year. Chemicals giant BASF warned that a gas shortage could wreak havoc on the industry. Aluminum and zinc smelters are closing, and so are fertilizer plants, all because of record gas and electricity prices.

Relief is not in sight unless one considers the filling up of gas storage caverns in Europe a form of relief. The EC had set a target of 80 percent for storage fill rates by October 1. Member-states are on track to hit this target ahead of schedule, but this has come at a cost: the EU’s gas bill this year is ten times higher than it normally is, at over $51 billion.

What’s more, storage alone will not be enough to keep European economies going through the winter months. The EU will need more gas as regular supply. Besides the U.S., there are few other places it can get it. It could be why the head of the German energy regulator warned the EU’s biggest economy would need to reduce gas consumption by a fifth to avoid shortages and rationing in the winter.

The longer these price rises go up, the more this will be felt across the economy. The magnitude of the increase and magnitude of the crisis isn’t comparable to anything in the past few decades.

Daniel Kral, senior economist at Oxford Economics, told Bloomberg this week.

It is unfortunate that Europe is experiencing one unprecedented crisis after another. And it could yet get worse as the oil embargo against Russia kicks in at the end of the year.

Analysts have warned that this could lead to higher prices for oil. This will, in turn, add to upward electricity price pressure due to the switch from gas to oil some utilities in Europe have implemented to shield themselves from prohibitive gas prices.

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AUTHOR COMMENTARY

If you read my report, “Are You Awake? Are You Ready For What’s Coming? Do You Loathe The Honeycomb??,” you know that from the scriptures this drought and dearth is happening, just as the Lord warned he would do to the Gentiles who hate his word, who are high-minded, and do not repent of their wickedness.

Do not let any sluggard and idle gainsayer talk you out of what you can plainly see with your own two eyes: the destruction of the Western world is upon us, and it is too late on a national scale to repent. What YOU need to do is to continue to trust and fear the Lord, get sin out your life, and walk wisely and circumspectly, because we will be going through some pretty incredulous times; hence, why I have warned that you need to prepare the best that you can and take precaution. Do NOT be lazy and wish away all your problems.

[1] The word of the LORD that came to Jeremiah concerning the dearth. [2] Judah mourneth, and the gates thereof languish; they are black unto the ground; and the cry of Jerusalem is gone up. [3] And their nobles have sent their little ones to the waters: they came to the pits, and found no water; they returned with their vessels empty; they were ashamed and confounded, and covered their heads. [4] Because the ground is chapt, for there was no rain in the earth, the plowmen were ashamed, they covered their heads. [5] Yea, the hind also calved in the field, and forsook it, because there was no grass. [6] And the wild asses did stand in the high places, they snuffed up the wind like dragons; their eyes did fail, because there was no grass. [7] O LORD, though our iniquities testify against us, do thou it for thy name’s sake: for our backslidings are many; we have sinned against thee. [8] O the hope of Israel, the saviour thereof in time of trouble, why shouldest thou be as a stranger in the land, and as a wayfaring man that turneth aside to tarry for a night? [9] Why shouldest thou be as a man astonied, as a mighty man that cannot save? yet thou, O LORD, art in the midst of us, and we are called by thy name; leave us not. [10] Thus saith the LORD unto this people, Thus have they loved to wander, they have not refrained their feet, therefore the LORD doth not accept them; he will now remember their iniquity, and visit their sins. [11] Then said the LORD unto me, Pray not for this people for their good. [12] When they fast, I will not hear their cry; and when they offer burnt offering and an oblation, I will not accept them: but I will consume them by the sword, and by the famine, and by the pestilence. [13] Then said I, Ah, Lord GOD! behold, the prophets say unto them, Ye shall not see the sword, neither shall ye have famine; but I will give you assured peace in this place. [14] Then the LORD said unto me, The prophets prophesy lies in my name: I sent them not, neither have I commanded them, neither spake unto them: they prophesy unto you a false vision and divination, and a thing of nought, and the deceit of their heart. [15] Therefore thus saith the LORD concerning the prophets that prophesy in my name, and I sent them not, yet they say, Sword and famine shall not be in this land; By sword and famine shall those prophets be consumed. [16] And the people to whom they prophesy shall be cast out in the streets of Jerusalem because of the famine and the sword; and they shall have none to bury them, them, their wives, nor their sons, nor their daughters: for I will pour their wickedness upon them.

Jeremiah 14:1-16

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[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).

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