Energy Crisis in Europe: Firewood Becomes the New Gold
26 November 2022 Aaron Gilland Forest Industry Fraud
|This month I’m taking a little different twist on timber security by looking at theft, but also at global conditions that could have a dramatic impact on the timber industry as a whole for many years to come. This is not the first time that a wood crisis in one part of the world had a great impact beyond the immediate area. It was not that long ago that a wood shortage in Japan brought floating sawmills to the US Northwest to meet the emergency need.|
The current situation in Europe could have the same impact on the US and global supply chains. When there are shortages in any product or resource, there are thieves who either take advantage of the situation or steal to meet personal needs.
This month we take a look at the wood shortage situation in Europe. We’ll first try to get a sense of the extent of the problem and how ordinary people and especially the poor are most adversely affected by the energy crisis just as winter moves into the area.
Once we get an idea of the lives of energy consumers, we’ll look at some of the complex issues raised in Europe that got them there.
Hope you find it all enlightening. It might also be a good time to try to read our crystal balls to see how this could eventually affect the US timber industry.
Throughout Europe energy prices are spiraling out of control.As a result, many Europeans resort to firewood to keep themselves warm as the winter months have already arrived in many parts of the continent. People are venturing into the forests to cut down their own fuel and those trees are on public and private land.
Gas and electricity prices have risen dramatically placing average citizens in jeopardy while temperatures drop.
As a result, many citizens are looking to wood as a heat source this winter, but even obtaining wood for fuel has become a problem. In Bulgaria, which relies heavily on wood burning for most households, prices have doubled. Local media reports from Poland last month asserted that prices of firewood have already doubled this year. The Telegraph reported in August that firewood sales in the UK have increased five-fold.
Some desperate residents are burning household garbage to stay warm.
Furthermore, prices for wood pellets has nearly doubled according to a Bloomberg report. In July, the EU also banned the import of Russian wood and pellets.
The spiking prices are felt most by the poorest, especially those in Central and Eastern Europe where low-income households tend to be more reliant on firewood than gas.In anticipation of a wood shortage, timber theft is quickly rising as gas and electricity become increasingly un-affordable for ordinary Europeans. In spite of tighter controls by Forestry departments, forest owners find the thefts are getting more frequent and more brazen.
The story is the same across the continent. Firewood prices are soaring, warehouses have filled their waiting lists until next year, and there are growing concerns this situation will lead to major environmental problems.
Some government agencies have expressed concerns about the illegal logging, but others have chosen to turn a blind eye to the problem. In those cases, the government has even encouraged citizens to burn whatever they can, unless it is harmful, like tires.
This tug of war between the needs of the people for survival and the government and property owners’ needs to prevent theft and protect forests and property will only get worse.
With Russian energy imports dwindling, Europeans pray for a mild winter and European policymakers pray they can avoid energy rationing.
The impact is pervasive. It affects not only the citizens’ well-being, but the economy, the environment, and the dwindling oil and gas supply is slowing down the Continent’s economy and crippling industrial production. Germany, Europe’s largest economy is heading for a recession.
|Why is There an Energy Crisis in Europe?|
While ordinary Europeans are looking for solutions and help today, policymakers are seeking long-term solutions to ensure reliable fuel sources for many years to come.
|The reasons behind Europe’s problems are far from straightforward and illustrate how complex and interconnected the global energy market is. The interdependence of world markets affects economies, prices, and efforts to meet a variety of energy-related challenges. Add to that the push by world governments to remove traditional heat sources and rely on “green energy” and you can begin to see how big a problem we may all see in the near future. |
In an article from the World Economic Forum, published on October 13, 2021, here are five things to know about Europe and its energy.
1. Global demand is recovering strongly after the worldwide pandemic.In 2020, demand for natural gas fell by 1.9%. That was partly because of change in energy use during the worst periods of pandemic disruption. But it was also the result of a mild winter in the northern hemisphere. Since then, demand is rebounding throughout 2021 and global gas consumption could have grown 7% higher than pre-pandemic levels by 2024. Some of this is also a result of a major switch from coal to gas. Even though gas consumption is expected to slow, the government may need to legislate to ensure a smooth transition.
2. Europe is reliant on gas imports
European gas production is in decline. Several North Sea gas deposits are running dry, as are a number of gas fields in the Netherlands. This leaves Europe increasingly dependent on gas imports, primarily from Russia and Norway. This could be an opportunity for Russia to underscore its credentials as a reliable supplier to the European market, but instead its exports are down from their 2019 level.
3. Prices are high and could go higher
There has been a 600% increase in European gas prices so far in 2021. Although governments are seeking ways to provide help against spiraling costs, the exposure to volatile global gas prices underscores the importance of building a strong, home-grown renewable energy sector to further reduce the reliance on fossil fuels.
4. Winter is coming – again
The problem of low gas stocks is only part of the problem. Chartering ships to transport LNG around the world has been affected by a lack of shipping capacity, making responses to spikes in demand both difficult and expensive. Vessel charter rates have also spiked.
5. The energy transition: it’s complicated
Gas burns cleaner than oil or coal. It is used widely as a substitute for both in the production of electricity. Although it is playing a role in helping decarbonize electricity generation, gas is still a source of greenhouse gas emissions. The International Energy Agency (IEA) predicts a 9% increase in annual gas demand between 2020 and 2024. That is significantly higher than the demand growth that would need to be maintained to stay in line with the target of net-zero emissions by 2070.
In the meantime, Europeans are fighting for reliable and affordable heat during the winter months right now. They can’t wait for a global solution. So, they turn to wood as an immediate source of energy and access for most people is only available by stealing what they can find. Their family depends on it.