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Oct 11, 2021
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A sinister tale of energy transition

On the main beneficiaries of the global crisis

As the price of natural gas rises and the pressure on the energy sector and other industries rises, fertilizer plants have begun to close worldwide.

American company CF Industries closed its two factories in the UK in Ince and Billingham. Norwegian Hurt International announced a 40% cut in ammonia production at several of its European sites. Spanish fertilizer manufacturer Fertiberia decided to stop production at its factories in Palos de la Frontera and Puertollano. Lithuanian company Achema canceled plans to resume ammonia production. High production costs led to the partial closure of ammonia production at the company’s plant OCI in Gelin (Netherlands). The largest ammonia producer in Germany SKW Piesteritz announced a 20% cut in production.

Austrian company Borealis AG is also cutting ammonia production due to high natural gas prices after other major European fertilizer producers cut their production. German chemical giant BASF due to rising electricity prices, he announced a decision to cut production at factories in Antwerp (Belgium) and Ludwigshafen (Germany).

The Odessa Port Plant (OPP), one of Europe’s largest fertilizer producers, is halting production due to the same increase in gas prices.

The situation is aggravated by the decision of China to limit the export of fertilizers. Several Chinese fertilizer companies have said they are temporarily suspending product exports. By cutting back on exports, Beijing wants to limit the rise in fertilizer prices on the domestic market. Chinese Prime Minister Li Keqiang urged to pay attention to high prices for fertilizers and other means of agricultural production, noting that the situation poses a threat to the country’s food security.

Restricting exports from China could be a blow to the global fertilizer market, as China accounts for 10% of world exports of the main nitrogen fertilizer urea and about 30% of the main phosphorus fertilizer diammonium phosphate. India, Pakistan, the countries of Southeast Asia, Latin America and Australia, the main importers of Chinese fertilizers, will suffer the most.

A lack of fertilizer will automatically lead to poor harvests of major food crops. This means that food will rise in price. Agronomists know that one ton of mineral fertilizers increases the yield: 8-15 tons of grain, 50-70 tons of potatoes, 30-40 tons of sugar beets, 5-6 tons of raw cotton, 2-3 tons of flax fiber.

However, it is not just a matter of quantity. Nitrogen fertilizers increase the protein and gluten content of cereal grains. Without them, it is impossible to grow durum wheat, from which pasta and high-quality flour are made. The inevitable rise in prices for flour, bread and pasta will be a direct consequence of the energy crisis and the related rise in ammonia prices.

Prices for sugar will rise: mineral fertilizers will increase its content in sugar beets. The less fertilizer, the less sugar, and the more expensive it is. Fodder crops will suffer from the rise in fertilizer prices. First of all, maize, in the cost of which about 20% falls on fertilizers. With the rise in feed prices, meat, chicken and eggs will rise in price.

Analysts Bloomberg believe that a “perfect storm” has arisen on the fertilizer market, which creates exorbitant risks for agricultural producers and requires urgent government support measures. In particular, Brazilian President Jair Bolsonaro said that due to the shortage of fertilizers and the increase in their cost, his country with a population of 213 million is facing a food crisis.

Under these conditions, if the PRC takes emergency measures to protect their agricultural producers, the European Union does the opposite. Head of the European Commission Ursula von der Leyen suggested to increase investments in green energy, that is, to extinguish the fire with kerosene. Against the backdrop of rising gas prices, she suggests spending money on green energy.

In the European Union, there are concerns that higher energy prices “Undermine Europe’s environmental ambitions, consumers are likely to pay higher electricity bills, which could affect their support for a rapid transition to climate neutrality”writes CNBC… However, this only “reinforces the plan to phase out fossil fuels,” says European Commission Vice-President Valdis Dombrovskis.

Is there any logic in the fact that the European Union began to seek gas independence from Russia, buy LNG from the United States, slow down the launch of a pipeline from Russia to Europe – and got an energy crisis, soaring gas and electricity prices, and finally, a food crisis?

There is logic, if we explain what is happening not by the insanity of politicians, but by the interests of quite specific ruling and ruling groups.

The largest German company producing solar power plants and wind turbines, BayWa re, sold 49% of its shares to a Swiss investment fund in the spring Energy Infrastructure Partners (EIP), a subsidiary of the bank Swiss loan, 15% of the shares of which are owned by a group of American investment funds led by Black Rock, and another 15% – by the Saudi Qatari and British and investment funds. Black rock, in turn, is a shareholder in a leading French manufacturer of solar power plants and wind turbines neon

European giants such as Siemens and General, also controlled by American investment monsters.

In the green energy sector in the United States, NextEra Energy is leading, through its subsidiary NextEra Energy Resources builds a significant proportion of wind and solar power facilities in America. Facilities owned NextEra Energygenerate more electricity from wind and solar than any other company in the world. Shareholders NextEra Energy Inc., – giant American investment funds and banks Vanguard, Black Rock, JPMorgan… Among the shareholders of the world’s leading manufacturer of wind farms General Electric – Vanguard, Black Rock and loyalty… All the same faces!

American financial capital, concentrated in gigantic investment funds carrying tens of trillions of dollars, is also the beneficiary of the “pandemic”, controlling Big Pharma corporations. Shares of the world’s largest investment fund BlackRock have been growing in value since the beginning of the coronavirus epic, despite the energy crisis. The shares of other gray cardinals of the global crisis are also growing.

Green energy and the associated energy transition turned out to be an ominous tale. This industry is down. It is pulling the world into an energy crisis, which is pulling behind a food crisis that can take on a global scale.

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