Coronavirus Effects

We all hope the coronavirus runs its course as quickly as possible. In the meantime, many people are noting a variety of positive effects that responses to the virus are having. The question is whether these effects will persist after the virus is gone. What can we do to retain the positive effects?

Most noticeable effects are related to significantly reducing interactions with others.

  • The use of fossil fuel is decreasing dramatically because of reduced transportation by airplanes, trains and cars.
  • One adaptation to minimize contacts with others is to work from home. Many employers and employees now see this works. See that driving to work isn’t necessary for many types of jobs. In many cases it would be great to continue to work from home. Benefits obviously include decreased use of fossil fuels, but also not facing the stress of the daily commute, and having more time to spend with family.
  • Many educational institutions are implementing or expanding online learning. Besides reducing fossil fuel use, think of the tremendous savings of not having to maintain classrooms and libraries. This could break the burden of high tuition and student debt. My favorite is getting away from lectures, not the way I like to learn. Collaborative online educational projects can be more effective and enjoyable.
  • Many medical clinics are encouraging people to connect first by phone, to avoid the spread of the virus. Telemedicine can help beyond the initial contact with the clinic. Physicians can see patients with online video. People can take advantage of getting prescription drugs by mail.

The following is from an email from my friend Ed Fallon of Bold Iowa.

Coronavirus and Climate

In all seriousness, the coronavirus, as well as the implied risk of a global pandemic, is not to be taken lightly. For details, check out the 1918 global influenza outbreak that sickened 500 million people and killed 50 million.

That said, it’s astounding that so much ink, airtime, and bandwidth are spent on the coronavirus while the present danger of climate chaos is mostly ignored as it wrecks havoc across the globe — particularly in poor communities and the world’s most vulnerable nations.

As this article in The Guardian points out, the coronavirus scare has “disrupted several events linked to the fossil fuel industry. In the past few weeks, the Geneva Motor Show was cancelled, after Switzerland banned all public gatherings of more than 1,000 people. In Houston, the giant annual CeraWeek gathering of oil and gas executives was called off, as was the Formula One grand prix in Shanghai.”

Closer to home, this past week saw Energy Transfer’s (ET) stock drop 30.82 percent. That’s a huge hit at a time when ET hopes to convince regulators in Iowa and Illinois to let it double the flow of oil through the Dakota Access Pipeline. Authorities in both North Dakota and South Dakota have, alas, already given ET the green light. But the Iowa Utilities Board and Illinois Commerce Commission have expressed reservations about the proposal. Perhaps this week’s stock shock will give regulators further reason to say “no.” (See photo at right from protest organized by Save Our Illinois Land and other groups prior to last week’s Illinois Commerce Commission hearing.)

Back to The Guardian story, which nicely sums up what the response to the climate crisis oughta be: “Governments should act with the same urgency on climate as on the coronavirus, leading campaigners say, as evidence mounts that the health crisis is reducing carbon emissions more than any policy.”

It’s too early to tell, but perhaps the coronavirus will do more to curtail greenhouse gas emissions than the goals agreed to at the 2015 Paris Climate Accord — which most of the world’s nations, especially the biggest emitters, have done little or nothing to meet. See this story in The Guardian for details.

Coronavirus and Climate, Ed Fallon

Global air traffic decreased by 4.3% in February with cancellations of tens of thousands of flights to affected areas. But Rob Jackson, the chair of Global Carbon Project, said this would only be meaningful if it led to long-term behavioural change, particularly in aviation, which is one of the fastest growing source of emissions.

“If this could change the way we travel, it could lead to more virtual meetings,” he said. Otherwise, “I see no silver lining to the coronavirus. If gas emissions drop temporarily then great, but it won’t be a meaningful change in the long term unless it shocks us in a global recession. Nobody wanted that in 2008 and nobody wants it now.”

Coronavirus could cause fall in global CO2 emissions. Responses to outbreak also show how government policy and behavioural changes can have impact by Jonathan Watts, The Guardian, March 10, 2020

The dramatic fall of oil prices could upend the American fracking industry, analysts said Monday, as panic over the coronavirus outbreak lessened global demand and Saudi Arabia and Russia flooded the market with new supply.

Now the fracking industry, which President Donald Trump sought to expand with hard-line support for increased fossil fuel production, faces potential ruin. The spread of the coronavirus, which causes the disease known as COVID-19, is grounding flights and halting factory production in China, while rival producers oversupply the market to defend their share. Fracking, a ballyhooed but financially fragile sector, struggled to stay afloat with crude selling at $50 per barrel. If prices stay around $30, or even fall as low as $20, U.S. frackers simply might be unable to keep up.

“It’s a financial bloodbath,” said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis. “With oil prices at the current level, there’s a real risk many of them will simply go bankrupt.”

Plummeting Oil Prices Could Force A Reckoning For The American Fracking Boom. A price war led by Saudi Arabia and Russia is crushing the price per barrel just as the coronavirus is hurting demand By Alexander C. Kaufman, HUFFPOST, Mar 9, 2020

At a time when the energy sector is weighed down by debt and reeling from low commodity prices, American energy producers are now bracing for the biggest demand shock to hit the markets in decades: the effects of the coronavirus outbreak in China and beyond.

The outbreak has already claimed more than 2,600 casualties and infected nearly 80,000 globally, including 3,000 medical staff in China. 

While the outbreak may not sweep the globe as swine flu did in 2009, the fear of a global epidemic managed to shave 975 points off the Dow Monday morning, and experts seem to agree that the economic effects of the fallout are likely to be more severe. 

UBS recently warned that it could drag global economic growth to near negative levels during the first quarter of the year and cause the worst growth slowdown since the 2008 crash.

Here are the three energy sectors that are likely to be hardest hit by the coronavirus epidemic, and why:

#1 Oil, Grounded by Demand

Oil and natural gas prices have remained low for the past year and could remain that way with the biggest oil importer now grounded. 

China, the world’s top oil importer, bought 41.24 million tonnes of crude in 2019, equivalent to 10.04 million barrels per day (bpd). But just two months after the outbreak of the virus, Chinese oil demand is down sharply because of dwindling air travel, road transportation and manufacturing. 

#2 Natural Gas, Already A Wreck

Natural gas prices recently tumbled to historical lows and are down nearly 15% since the start of 2020 with excess supply and inventory build up pressuring prices. The coronavirus outbreak is not helping the situation, either. 

The global LNG leader Royal Dutch Shell has warned that the coronavirus outbreak is already hurting LNG demand and forcing it to reroute supplies previously earmarked for mainland China.

#3 Battery and Energy Storage

Last week, Utility Dive—which covers news and trends in the utility industry—warned that the coronavirus epidemic “… is going to be a very big deal” with respect to Chinese manufacturing.

Eight provinces in the country have already announced work stoppages as a result of the outbreak, which has negatively impacted multiple solar manufacturing campuses. This is highly significant considering that most of the world’s solar panels are made in China.

China also happens to be home to most of the world’s lithium-ion battery manufacturing. Utility Dive has warned that the country’s battery storage production capacity could contract by 10%–or 26 GWh–compared to earlier forecasts.

3 Energy Sectors Most Threatened By The Coronavirus By Alex Kimani, – Feb 24, 2020

But the most recent drop in gas prices is a result—at least in big part—of the reduced economic activity in China due to Covid-19. Economic activity and consumption of oil in China are down significantly. The International Energy Agency has cut its demand outlook by 30% in response. Prices are dropping like a stone and have already reached the point where new fracking is barely profitable, if at all.

Coronavirus may be the straw that breaks the back of oil fracking, pribizco, Finance Market House, Feb 16, 2020

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2 Responses to Coronavirus Effects

  1. Ed Fallon says:

    Thanks for sharing my blog, Jeffrey.

    On Wed, Mar 11, 2020 at 9:52 AM Quakers, social justice and revolution wrote:

    > jakisling posted: ” We all hope the coronavirus runs its course as quickly > as possible. In the meantime, many people are noting a variety of positive > effects that responses to the virus are having. The question is whether > these effects will persist after the virus is gone.” >

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