Energy crisis could trigger winter blackouts in US: CEO of coal company

The energy crisis that has led to power shortages and blackouts in Europe and Asia could hit the United States this winter, said the CEO of an energy company.

“We have actually had discussions with electric utilities who are concerned that we will simply have to implement blackouts this winter,” Ernie Thrasher, director of Xcoal Energy & Resources, said as quoted by Bloomberg News. “They don’t see where the fuel is coming from to meet the demand.

He added that utilities are switching from natural gas to coal during the fall and winter months to meet demand.

Global demand for electricity has increased as economies attempt to recover from the COVID-19 pandemic, triggering natural gas shortages mainly in Europe and Asia.

Power producers, including Duke Energy, have warned their customers that bills could rise this winter. Duke’s Piedmont’s natural gas unit said on Tuesday that higher gas prices and lower production would increase customer bills by about $ 11 per month in North and South Carolina.

“This whole supply chain is stretched beyond its limits,” said Thrasher, whose Pennsylvania-based company works in coal logistics. “It will be a difficult winter for us here in the United States.”

Meanwhile, the New York State Civil Service Commission told Bloomberg it is monitoring New York’s utilities to determine if there is enough fuel for the winter.

“Utilities have covered about 70 percent” of their residential electricity needs, the agency said, adding that it expects to meet demand this season.

The benchmark U.S. natural gas contract has rallied, recently hitting seven-year highs, but its price of $ 5.62 per million U.K. thermal units is nowhere near the $ 30 and above paid in Europe and Asia , Reuters noted.

However, the American market is worried about the coming cold, particularly in New England and California, where gas prices to be delivered this winter are well above the national benchmark. In New England, buyers expect gas to cost more than $ 20 per million British thermal units.

In New England, gas for January delivery is skyrocketing, trading this week for over $ 22 at the region’s Algonquin hub, which would be the highest price paid in a month since January and February. 2014.

“Henry Hub prices continue to climb through the winter months, but we should see even larger increases on the east and west coasts of New England and California,” said Matt Smith, senior analyst at the oil for the Americas at the commodities analysis firm Kpler.

Reuters contributed to this report.