Power outages

Kelly Evans's afternoon commentary & top market stories

VIEW IN BROWSER | SUBSCRIBE WED, SEP 01, 2021 YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC AS OF WED, SEP 01, 2021 • 11:18 ET DJIA 35326.16 -0.10% -34.57 S&P 500 4529.21 +0.14% +6.53 NASDAQ 15358.69 +0.65% +99.46   EDITOR'S NOTE I wasn't joking about fossil fuels not being able to compete. In fact, none other than the Iraqi finance minister is issuing the same warning to fellow OPEC members today--just as the cartel holds its latest meeting.    Writing in The Guardian, Ali Allawi and IEA coauthor Fatih Birol note that the expected plunge in oil demand by 2050 would decimate oil-producing economies like Iraq. Last year offered a grim preview--the collapse in oil prices amid Covid doubled Iraq's poverty rate. Plus, Iraq itself is suffering from extreme heat (by one estimate, its temperatures are rising 7x the global average), and the country is already seeking major reforms to reduce its reliance on carbon exports.    Given that solar power is likely to be the future, sunny spots like Iraq would seem well-positioned to capitalize on that. The worst sites in Iraq still get 60% more direct energy than the best sites in Germany, Allawi notes--and yet Germany has more than twice as much solar power as Iraq has in oil, gas, and hydropower combined. Plus, "distributed" solar built on-site, which bypasses the need for a well-functioning electric grid, could mitigate another issue that has plagued poorer nations like Iraq.    But even if OPEC's days are numbered, the group is enjoying as much influence as ever. Recall the Biden administration pleading with OPEC to produce more oil last month to alleviate the spike in oil prices to upwards of $75 a barrel in the U.S. OPEC did reach a deal to increase supply by 400,000 barrels a day in each of the next few months back in July, about a 2% increase by December. Further increases, especially with the spread of Delta slowing demand, are unlikely.    The U.S. isn't the only one dealing with high energy bills. The situation is arguably worse in Europe, where natural gas prices (which supply household and business electricity) have spiked to 5-6x what they were two years ago, to the highest levels on record.   Remember how I mentioned that carbon prices in Europe have surged to a record high? They traded above 60 euros a tonne this week for the first time. That's disincentivizing new gas production in Europe, which is also competing with Asia for liquefied natural gas supplies. The largest gas field in Europe, Norway's Gronigen, is shutting down next year--eight years earlier than planned, because of earthquake risks.    "The result," writes David Sheppard in the Financial Times today, "is something approaching a global gas crunch." And it leaves Russia alone as basically the "OPEC" of natural gas--the only country with spare capacity that could meet this demand. But Russia's Gazprom has "declined to send any additional supplies to Europe...before the controversial Nord Stream 2 pipeline is approved." So either they can't or they won't meet the need.    People are already worried about what this could mean for Europeans if temperatures plunge this winter and heating is unaffordable, or outages crop up.   Louisiana offers a scary glimpse of at this. Hurricane Ida wiped out electricity in a region that is heavily dependent on it, and less energy diversified. In our home, in New Jersey, when the electricity goes out, our nat gas-powered generator comes on. Even if we didn't have one, I could still cook with gas, and turn on the gas fireplace for heat (which is exactly what our neighbors did when Hurricane Sandy wiped out power for two weeks.) I could still drive my car with gasoline. When everything goes electric, you lose that resiliency.   Every household and business on the planet right now should be thinking hard about how they get power, and how good their backup options are. The "mushy middle" of this global energy transition could be a very uncomfortable place to be.    See you at 1 p.m!   Kelly Kelly Evans Twitter: @KellyCNBC Instagram: @realkellyevans KEY STORIES  Apple announces first states that will let you keep a digital version of your driver's license on your iPhone Eight states will roll out a feature allowing users to add driver's license and state IDs to Apple Wallet for iPhone and Apple Watch. Private payrolls increase by just 374,000 in August, far short of the 600,000 estimate, ADP says Private payrolls rose just 374,000 for the month, well below estimates but above July's 326,000, according to ADP. September is the toughest month for stocks, but this time could be different A lot of the old seasonal trading rules have not worked as well in the last few years. Weekly mortgage-refinance demand drops as interest rates stall Mortgage rates have not moved much recently, but that could be about to change. You should keep your checking and savings accounts at different banks—here's why Trick yourself into saving money by splitting your paycheck between two separate bank accounts. Google reportedly plans to put its own chips in Chromebook laptops from 2023 Google is edging closer to rolling out its own central processing units for its Chromebook laptops, according to a report from Nikkei Asia. China gaming stocks rally despite regulators limiting kids' playing time Chinese regulators announced that minors would only be allowed to play online games for three hours a week, a dramatic tightening of previous regulations. Biden will place U.S. support for Ukraine front and center during Zelenskyy visit President Joe Biden will unveil a financial and military aid package for Ukraine when President Volodymyr Zelenskyy visits the White House on Wednesday. The rise of Lowe's and what's next for the home improvement giant post-pandemic The American home is undergoing a makeover during the Covid-19 pandemic, and home improvement giant Lowe's is reaping the benefits from it. Here's how retirement plan tax breaks may widen racial wealth gaps Tax breaks for retirement plans reward workers for saving. But these write-offs may be widening the racial wealth gap, analysis shows.     IN CASE YOU MISSED IT Student housing hot this year Hurricane Ida's impact on the supply chain The economic hit levied by Hurricane Ida   Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel Digital Products Feedback Privacy Policy   © 2021 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS