During the global lockdowns in 2020, demand for fossil fuels plummeted. With reduced manufacturing, transportation, and travel needs, there simply wasn’t a push for the supply.
However, coming out of these restrictions in 2021, there has been a surge in demand for fossil fuels that has resulted in global energy shortages.
This is due to several factors. China, a manufacturing powerhouse in the global economy, has a higher demand for coal now that pandemic-related restrictions are being lifted. As the world’s largest consumer of fossil fuels, they rely heavily on coal to power their production. The shortage, partially spurred by bad weather across the country, has led to factory shutdowns.
Weather changes have also affected countries like Britain, which gathers around 24% of its energy from wind power. This has caused a heavier reliance on oil to generate electricity. Countries that supply coal, such as India, have also been impacted by weather-related issues such as monsoons that have halted coal transportation.
All of these factors have created a perfect storm for rising oil and gas prices.
What does this mean for diesel?
Expect to see diesel prices rise throughout the year. While the shortage is predicted to level out in 2022, according to International Monetary Fund Chief Economist Gita Gopinath, there is a current scramble for energy alternatives – diesel being one of them. With countries like Britain having to switch to different sources of energy, and the price of natural gas tripling over the last few months, they’ve fallen to relying on oil or diesel to power their generators.
This chain of events has led to rising gas and diesel prices, the former of which has hit a seven-year high in the United States. Countries across the world have already encountered drastic shortages of gas and diesel, with some pump stations going days or a week without any supply.
In the short run, this has left many overseas truckers with huge delays on refueling. In the long run, this drastically affects the international supply chain for many products, as transportation is halted. This will likely ripple into the United States as prices for diesel rise higher and higher, and with a trucker shortage already in place, it’s easy to see where this could create problems across the country.
The Problem With Renewable Energy
As we’ll cover in a separate article, the push for cleaner energy alternatives has been an important discussion in the diesel industry. With electric vehicles being manufactured for a broader variety of uses, including school buses, it’s easy to wonder whether this will become a long-term threat to the diesel industry. However, an issue that the electric vehicle industry will run into is one that is already brewing across the globe.
Weather changes have crippled energy production for many countries that rely on wind or hydropower for their electricity needs. Brazil, which relies on hydropower for 60% of its electricity, is currently returning to fossil fuels via natural gas power plants to avoid blackouts. This is due to strong drought conditions that have reduced the water levels in their reservoirs, which are running at just under a third of their total capacity.
With renewable energy sources experiencing losses due to weather changes, from droughts to changing winds, countries must make up the difference through other means. Whether this is reopening natural gas power plants or running diesel-powered generators, it spells trouble for the future of renewable energy.
How Does This Affect Me?
Aside from rising diesel prices that may put a squeeze on your wallet, this global energy shortage will impact shops and drivers in another very important way.
Here at Highway and Heavy Parts, we have already noticed supply chain issues regarding the shipment of diesel parts. Some diesel parts have become relatively scarce, such as remanufactured actuators. This is due to shipping and manufacturing delays, as well as a decrease in available cores. For certain types of actuators, the only way to see them manufactured is via remanufacturing the core, as they have been phased out of regular production by the OEM. Pair that with rough shipping schedules and you have a parts shortage that affects everyone.
This supply shortage affects not only the truckers, fleets, and repair shops – but even the vendors. Some vendors have had to diversify their supply, and source parts from new suppliers.
At HHP, we stand behind the quality of our parts and strive to only provide the best for our customers. Despite the supply chain issue, rest assured that our parts supply will not decrease in quality.
As the demand for fossil fuels continues to peak, it is important to stay on top of your engine maintenance. Supply chain shutdowns due to energy shortages can make it difficult to get your parts on time, or to source your parts at all.
At Highway and Heavy Parts, we take the guesswork out of diagnosing your engine issues. Give our ASE-certified technicians a call at 844-447-1453, and we’ll be more than happy to help.
From diagnosis to delivery, we’re Highway and Heavy Parts!
