Jim Thompson

Email Jim at jim.thompson@ipulpmedia.com

On the Nip Impressions calendar, May is energy trends month. There is hardly a timelier topic, except perhaps food trends, but Nip Impressions does not cover food and my doctor wants me to lose ten pounds, so I try not to think about it.

I would guess a good half of the headlines in the popular press today are about energy. These then fall into two categories, security of supply and what to do about, what I will call "dirty" energy.

Security of supply is largely related to the Russia--Ukraine War, its ramifications on western Europe and, hence, its ramifications on global supply. To the chagrin of the concerned environmentalists, this first problem encroaches on their plans to diminish the use of "dirty" energy as we go forward.

These are issues that will not be quickly resolved, leaving energy consumers frustrated and confused about their stance and their vision of a proactive future energy procurement scenario. At this point, I think we have to say everything is on the table.

I used to say the winter price of natural gas depended on the local weather in southern Connecticut as the energy traders rode the commuter trains into New York each morning to work in the energy trading pits. Now, such a parochial feeling can be found with energy traders and procurers anywhere. They all tend to read their local tea leaves as they decide how much and what price should be each day and in futures contracts, for their local tea leaves are as good a gauge as anything they have.

In other words, in today's turmoil, one can make a case for the future of local energy procurement almost any way one wants to do so. Why this is, though, breaks down into basically two sets of possibilities.

The first is the Russia--Ukraine War. Tell me what this is going to look like in a year, and I can suggest an energy trend that can be applied to your business. Unfortunately, where this war, like all wars, may unfold is impossible to tell. There is absolutely no stability to this situation. It would be a little better if there were substantive peace talks going on, however, neither side is worn down enough to make a capitulative (I just made up this word, but you can figure it out in context) approach to peace talks. In some wars, as we know, this can take years. As long as both sides have access to weapons and ammunition, it will likely continue. Only when the civilians on one side or another become disheartened will conditions likely change. Hence, energy purchasers continue in limbo.

The second is the environmental position of world governments as pertains to energy. Perhaps, at some time in the future when the promises of clean energy can be fulfilled in a very large manner, this will be an easy solution for all. However, despite all the progress, the alternatives are not well developed, and the clean energy solutions can be described as nascent at best. I just recently read, for instance, that 1% of the automobiles in the United States are electric and we are already straining the electrical grid and other infrastructure, such as high-speed charging stations, even though we have barely started down this path.

Prediction--consumers at an industrial level as well as at the home level will continue to be frustrated by the lack of clear trends, for nothing is certain.

Be safe and we will talk next week.

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