Cuba's Havin' A Blackout // What the Pickering Closure Could Do to Ontario // Glencore Strikes One of Japan's Priciest Coal Deals

Cuba's Havin' A Blackout

Havana, Cuba's capital, will be scheduling blackouts this month as well as canceling carnival in order to weather the energy crisis.

"The capital, home to a fifth of the population of 11.2 million and center of economic activity in Cuba, had been spared the daily power outages of four or more hours that the rest of the island has endured for months," reports Yahoo! News. "Blackouts have sparked a few small local protests this summer and a year ago in July fueled a day of unprecedented unrest across the country as discontent boiled over."

The energy crunch has exacerbated the pain of America's 2019 sanctions on the import-dependent country. "Soaring prices for food, fuel and shipping have exposed import dependence and vulnerabilities such as a decaying infrastructure. The country’s economy declined 10.9% in 2020, recovering just 1.3% last year."

“This is the moment to show solidarity and contribute so that the rest of Cuba suffers less from the undesirable blackouts," Havana Communist Party leader Luis Antonio Torres told the press.

Cuba's problems are less a reflection of its economic system than an exhibition of a more universal fact: without energy sovereignty, prosperity remains everywhere imperiled and always fragile. We need only look at Germany, its regime being far different from Cuba's, to appreciate this reality.

In order to conserve energy before winter, Berlin and other major German cities are cutting the lights on national monuments and government buildings. Hannover has shut off hot water in public buildings, while Munich has begun to shut off its spotlights.

"The situation is unpredictable," according to Munich's mayor.

Germany's dependence on Russian energy has led it here. Southern European countries have been stingy with sympathy after Germany forced financial austerity on them in the mid-2010s. That's made it difficult for the EU to coax them into a zone-wide gas consumption reduction. Spain's ecological minister, Teresa Ribera, said last week, "Unlike other countries, the Spanish population has not lived above our means from an energy standpoint."

What the Pickering Closure Could Do to Ontario

The Pickering nuclear plant in Ontario, Canada needs to be refurbished or else it will close. It won't be cheap--perhaps $10 billion--but compared to the alternatives, it seems to be the best way to go.

"The primary environmental concern has been that Ontario will fill the Pickering-sized hole in its grid with new natural gas plants, which will increase the province’s greenhouse gas emissions from electricity — a reversal of the last several decades’ worth of effort to shut down coal-fired power plants," writes John Michael McGrath.

No matter what, losing Pickering's capacity would put a big hole in Ontario's energy portfolio. Likely a hole only fossil fuels can fill.

"Aside from the environmental harms, there are also serious economic risks to the province: as the U.S builds more natural gas export terminals in part to meet European demand, natural gas is becoming a more globalized commodity, which makes it more vulnerable to serious price spikes depending on the vagaries of geopolitics," McGrath continued.

But it's not just capacity that the province would lose--4,000 well-paying jobs would also be put out to pasture.

The window to save the plant is shrinking. To learn more about the background of this whole situation, you can watch this interview I did with Edgardo Sepulveda.

Glencore Strikes One of Japan's Priciest Coal Deals

Japan's Nippon Steel Corp. has agreed to pay energy commodity giant Glencore through the nose for coal.

Nippon has agreed to an annual supply deal with Glencore for power plant coal up until March at a price of $375 per ton. "The agreement is three times more expensive than similar deals done last year, and is likely one of the costliest coal contracts ever signed by a Japanese company," Bloomberg reports.

Japan's grid has already been groaning under the pressures of the energy crisis. The recent heat wave has only made it worse. Manufacturers like Nippon have had to bear sky-high prices to keep things running. Earlier this month, Nippon purchased Japan's most expensive natural gas shipment.

"The Glencore deal may be used as the benchmark price for other annual supplies by thermal coal users in Asia," people familiar with the matter told Bloomberg. "That will boost the cost to generate electricity, and threatens to increase power bills for businesses and households."

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