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How Will Higher Fuel Prices Affect Different Parts of the World?
Reports of higher energy costs are causing concern around the world as pressure increases on businesses and people who buy goods and services.
The biggest shortage1, the Associated Press reports, is a lack of natural gas in Europe. European countries import 90 percent of their supply. Much of it comes from Russia. European prices have increased by five times since the start of the year.
Experts blame several events for the gas shortage. They say demand increased after coronavirus restrictions2 were lifted. They say the past cold winter reduced reserves. And the summer was less windy than usual, so less wind energy was generated3.
Europe's chief supplier, Russia's Gazprom, held back extra gas supplies during the summer to build up supplies in Russia. In addition to that, China's electricity demand has come back after the COVID-19 pandemic. China has bought up limited supplies of liquid natural gas, which is transported by ship, not pipeline4. There also are limited plants to export natural gas from the United States.
Europe pushes renewable energy
It is difficult to say how long higher fossil5 fuel prices will last, said Claudia Kemfert. She is an energy expert at the German Institute for Economic Research in Berlin.
"The long-term answer that has to be taken out of this is to invest in renewables and energy saving," she said. Renewable energy comes from the wind and sun.
The European Union's executive6 commission7 urged member nations recently to speed up approvals for renewable energy projects. The group said "clean energy...is the best insurance against price shocks in the future."
However, some gas-dependent European industries are cutting back on manufacturing products. German chemical companies BASF and SKW Piesteritz have cut the production of ammonia, an important part of fertilizer.
That caused a problem for Hermann Greif, a farmer in Germany's area of southern Bavaria. He said he could not buy fertilizer for his crops.
"There's no product, no price, not even a contract," he said. "It's a situation we've never seen before." He said the situation might result in a smaller crop in the coming year.
High energy prices already were hitting German farmers, who need diesel8 fuel to operate machinery9 and to keep animals warm, said Greif. He grows corn to make biofuel, or fuel made from crops.
Higher heating costs?
People in the northern part of the world are expected to face higher costs for heating this winter. That includes in the United States, where officials have warned home heating prices could rise as much as 54 percent.
Governments in Spain, France, Italy and Greece have announced measures to help low-income households. The European Union has urged similar aid.
Much depends on the weather. Europe's gas reserves are usually rebuilt over the summer. But now they are at unusually low levels.
"A cold winter in both Europe and Asia would risk European storage levels dropping to zero," says Massimo Di Odoardo. He is with the research business Wood Mackenzie.
That would leave Europe dependent on additional natural gas from a new Russian pipeline or on Russia sending more gas through pipelines10 in Ukraine. The new Nord Stream 2 pipeline beneath the Baltic Sea has not been approved in Europe. It may not begin operations until next year.
Kemfert in Berlin said Russian suppliers' decision to sell less gas on the open market shows they want "to put pressure on the early certification of Nord Stream 2."
Electricity shortages11 hurt businesses, people
In China, power cuts have followed increased prices for coal and gas. Electric companies in some parts of the country are limiting electricity. Factories in Jiangsu province and Zhejiang in the southeast temporarily shut down in mid-September. That could affect export suppliers.
Chenchen Jewelry12 Factory is in Dongyang, a city in Zhejiang. The factory faced power cuts over 10 days, general manager Joanna Lan said. The factory makes hairbands, paper products and gifts. Eighty to 90 percent of its goods are for export to the U.S., Europe and other markets. Orders were delayed "by at least a week," Lan said. "We had to buy generators14."
The biggest city in the northeast, Shenyang, turned off streetlights and elevators and cut power to restaurants and shops a few hours a day.
Jenny Yang is an energy market expert at IHS Markit. She said China's gas imports have jumped. However, increasing demand in Japan, South Korea and Taiwan also has helped push up prices around the world.
In Brazil, higher gas and oil prices are a problem because a lack of rain has made hydroelectric dams less productive15. That has made electricity more costly16.
Rosa Benta is a 67-year-old from Sao Paulo. She fears she will no longer be able to provide for her unemployed17 family members.
"Several times, (energy company) Enel called me saying I had debt. I told them: ‘I'm not going to stop feeding my son to pay you,'" Benta said. "If they want to cut the electricity, they can come."
Words in This Story
reserves –n. a supply of something that is stored so that it can be used at a later time
fossil fuels –n.(pl.) fuels (coal, oil, natural gas) which are formed in the Earth from dead plant and animal matter
insurance –n. protection from bad things that may happen in the future
certification -–n. official approval to do something legally
generator13 –n. a machine that produces electricity
elevator –n. a machine used for carrying people and things to different levels in a building
1 shortage | |
n.缺少,缺乏,不足 | |
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2 restrictions | |
约束( restriction的名词复数 ); 管制; 制约因素; 带限制性的条件(或规则) | |
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3 generated | |
a.生成的 | |
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4 pipeline | |
n.管道,管线 | |
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5 fossil | |
n.化石,食古不化的人,老顽固 | |
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6 executive | |
adj.执行的,行政的;n.执行者,行政官,经理 | |
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7 commission | |
n.委托,授权,委员会,拥金,回扣,委任状 | |
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8 diesel | |
n.柴油发动机,内燃机 | |
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9 machinery | |
n.(总称)机械,机器;机构 | |
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10 pipelines | |
管道( pipeline的名词复数 ); 输油管道; 在考虑(或规划、准备) 中; 在酿中 | |
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11 shortages | |
n.不足( shortage的名词复数 );缺少;缺少量;不足额 | |
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12 jewelry | |
n.(jewllery)(总称)珠宝 | |
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13 generator | |
n.发电机,发生器 | |
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14 generators | |
n.发电机,发生器( generator的名词复数 );电力公司 | |
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15 productive | |
adj.能生产的,有生产价值的,多产的 | |
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16 costly | |
adj.昂贵的,价值高的,豪华的 | |
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17 unemployed | |
adj.失业的,没有工作的;未动用的,闲置的 | |
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