Supply chain strains threaten U.S. oil output
American oil producers are struggling to source workers, vehicles and equipment to help make the most of rising global demand and a seven-year high in crude prices, according to executives at oilfield service firms. These issues are holding back the world’s top oil producer and consumer, with global output struggling to match demand.
As well as damaging the automotive and technology industries, the current shortages are also having an effect on renewable energy, oil and gas industries. Companies that are digitalizing operations and introducing renewable power to reduce greenhouse gas emissions are therefore being affected. On top of this, equipment shortages and lengthy delays are leading to higher prices for what is currently available.
Many companies are worrying about the upcoming weeks. Brad James, Chief Executive of Enterprise Offshore Drilling saying that the problems “are going to get worse.” Ru Schaefferkoetter, CEO of Trido Solutions has said that steel and aluminum can be “hard to find”, and the supplies of these materials could worsen as the Biden Administration incentivizes solar development. Biden’s Infrastructure Bill, which could be signed into law includes funding to expand renewable energy through a new Grid Authority.
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Toyota to develop alternative fuels with other Japanese automakers
Toyota Motor Corp has announced that it will join forces with Japanese vehicle makers Mazda Motor Corp, Subaru Corp, Yamaha Motor and Kawasaki Heavy Industries to explore the use of alternative sustainable fuels for internal combustion engine vehicles, including hydrogen and synthetic fuels derived from biomass.
The recent announcement means that if successful, it would allow the companies to support decades-old existing supply chains which employ hundreds of thousands of staff that may have otherwise become redundant due to the focus on manufacturing electric vehicles (EVs). Converting these internal combustion engines to green fuels like hydrogen is technologically difficult but Toyota’s Chief Executive Akio Toyoda seems keen on the challenge.
Global regulations surrounding carbon emissions are tightening, meaning automakers are ramping up production of EVs. Japan has previously said that it aims to be carbon neutral by 2050 and is supporting the use of hydrogen fuel. As well as developing vehicles powered by hydrogen, Toyota is aiming for 15 EV models by 2025 and is investing $13.5 billion over the next decade to support its battery production capacity.
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Supply chains take a hit as Port of Vancouver is cut off due to storm
Canada’s largest port, Vancouver has been cut off from all rail services due to flooding, landslides and rainstorms that hit British Columbia and the Pacific Northwest. Officials are now warning that this will severely impact the country’s supply chain.
Shipment delays with everything from containers to bulk commodities are on the cards for the Canadian supply chain, with port spokesperson Matti Polychronis saying that “vessel delays are expected due to disruption to terminal operations.” He revealed that the port is working with “all levels of the government” to “gauge the likely impact of the delays on terminal operations and to develop a recovery plan.”
The shipping industry is still facing widespread disruptions, and the port of Rotterdam has warned that supply chain congestion is set to continue through 2022. Hans Nagtegaal, the person in charge of container traffic at the port has commented on the recent issues, saying that “the supply chain is like gears or cogs that need oil to allow them to run smoothly again,” and “the oil we need is schedule reliability. We need schedule reliability to pick up.”
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