The Cost of Covid Crisis
The cost of living crisis... or the cost of covid crisis as it should be called. Billions of pounds created out of thin air devalued the pound and led to a situation where inflation was inevitable. Business found themselves with a currency worth less having to pay for overseas goods and services. The global economy ground to a halt, production of goods stopped creating a global shortage.
Nearly 40 years ago as a child, I took part in a school play called 'The Bumblesnouts' about aliens who come to earth educate earthlings and save the planet from destruction. The teachers at the time told us that oil would run out in 40 years. Well, the time has come and we are using more oil than ever. I decided on a career path in the Merchant Navy, eventually working on ships which were contracted by the largest oil companies in the world to look for new oil & gas and also survey existing fields. I spent almost a decade doing this so I know a thing or two about how much oil there is left, and there's plenty. Technology will be the thing to save the planet, not the indivudual actions of you or me which why all this net zero and making people pay the cost for it is all nonsense.
In 2021, oil prices went below zero, this prompted oil companies to stop looking for new oil & gas and stop surveying existing fields. The plug was literally pulled overnight on production, tens of thousands including myself lost our jobs. Most of my colleagues and I moved away from the oil industry onto other areas of shipping. I did a stint on offshore wind farm vessels, billions are being spent by energy companies subsidised by our tax on these offshore wind farms. Eventually I decided to move ashore temporarily to manage ships.
Now the problem is that when you stop production, it's not so simple to restart, many of the staff have found employment elsewhere. Equipment and rigs which have been idle for months or years with minimum maintenance takes months to get going again safely. Energy companies want sustained high prices before making the commintment to restart operations.
The chart below shows the number of oil and gas rigs which are used to extract the minerals. As can be seen, the number took a substantial hit during covid and is nowhere near the pre covid levels, yet demand has been built back as government eased restriction. This combined with decades of underinvesting due to a net zero agenda has led us to extortionately high prices.
The knockon effect affects everything, oil is still the global source of energy and considering the global supply chain market which exists today where everything is shipped and trucked from A to B. As countries have relaxed their covid restrictions, the supply has not kept up with demand, and is unlikely to do so for quite some time. The price of every single consumer item will increase as a consequence.
The United Kingdom has been and will continue to be hit particularly hard by the cost of living crisis. The problem is that when COVID hit, many EU workers lost their job and returned to their home countries, Brexit took effect and they were unable to or did not want to return. This has led to a situation where the usual businesses who relied on low cost labour were left without staff. The UK relies heavily on foreign imports, any country which relies heavily on imports will be proportionately more affected than those that don't in times of economic hardship.
Prior to covid we had near year on year of inflation, yet wages in the lower end did not keep up as there was a constant stream of people who would work for less than the previous person, so while the EU was good for the economy and business, it was not good for wages. Businesses are now screaming at government to allow temporary visas to fill these vacancies... The answer should be a firm no! In a time where inflation is at a record high, employers must increase wages, allowing in cheap labour will only exacerbate and cost of living crisis.
So we have a situation caused by an incompetant government which spunked away billions on covid, persues an unnecessary green agenda whilst the population suffers unlike ever before struggling to heat their homes and put food on the table.
The future of our nations economic health will rely on a competant government which needs to invest in home grown security, from food to energy. The government needs to utilise the North Sea oil and gas reserves which they have slowly been shutting down and underinvesting in over the past decades. The government needs support farming to ensure that we have our own sources of food.