Extreme Flooding Weighs On China’s Energy Supply Chain
An entire year’s worth of rain fell in the span of just a few days in central China, devastating the city of Zhengzhou, with a population of about 5 million, and leaving dozens dead as floodwaters inundated Henan province. The flash flood halted at least 10 trains holding a cumulative 10,000 passengers. Three of those trains were left on the tracks, with no escape for the passengers, for 40 hours, and 12 of those train passengers are now deceased. Meanwhile, the heavy rains continue to fall and the death toll continues to rise in the region. The Chinese government has resorted to blasting a dam in the area to divert the flooding and to relieve the pressure caused by the mounting waters.
The terror and tragedy experienced by the people directly impacted by the severe flooding can’t be overstated and is far and away from the greatest concern, but it is just one part of the story. Indeed, the devastation and disruption caused by the torrential rains extend far beyond the borders of the Henan province. “The floods drenching central China and submerging swathes of a major economic and transport hub are threatening supply chains for goods ranging from cars and electronics to pigs, peanuts and coal,” Reuters reported on Thursday.
The economic fallout from this slowdown will further burden the people of central China who have already grappled with days of power loss, lack of transportation, and other challenges from the flooding. “Power had been partly restored and some trains and flights were running on Thursday,” the Reuters report continued, “but analysts said disruption could last for several days, pushing up prices and slowing business across densely populated Henan and neighbouring provinces.”
One of the most severely impacted sectors is the coal sector, which China still relies on for the majority of its energy mix, even as it attempts to phase out the high-polluting fossil fuel. What’s more, the interruption to the coal supply chain is occurring at a moment of peak demand as consumers use up more energy trying to beat the summer heat.
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While the flooding in central China is historic, it’s likely going to become more and more of a common sight in coming years, as will these kinds of disruptions to supply chains caused by an increased incidence of severe weather patterns around the world thanks to the advance of global warming. “China routinely experiences flooding in the summer months,” the Guardian reported this week, “but rapid urbanisation, and conversion of farmland, as well as the worsening climate crisis, has exacerbated the impact of such events.
China is far from alone. All over the world, countries’ energy security is threatened by global warming and ever-more-frequent natural disasters, and powerful storm systems. Earlier this year we saw the devastation that an extreme cold snap caused in Texas when abnormally freezing temperatures plus a massive grid failure caused hundreds of deaths. Experts have also warned that the United States’ aging nuclear fleet is unprepared for global warming and the results could be disastrous if industry and political leaders are not proactive.
In an era that is so deeply defined by globalization and ever longer and more complex supply chains, incidents like this week’s flooding in China are shedding a light on the importance of either making these supply chains far more resilient or diversifying and shoring up local markets. Storms like the one continuing to pound Zhengzhou are growing more common and more severe all the time, and they have the power to cripple essential supply chains that impact people's access to food and power overnight. Energy security and sovereignty has never been more important.
By Haley Zaremba for Oilprice.com
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