Why energy is more expensive

Transcript

NIALA BOODHOO: Good morning! Welcome to Axios Today!

It’s Wednesday, October 6th. I’m Niala Boodhoo.

Here’s how we’re making you smarter today: Latina entrepreneurs show resilience despite the pandemic. Plus, manatees are dying in droves off the Florida coast.

But first, today’s One Big Thing: why energy is getting more expensive.

The price of gasoline at US pumps is up by about 50% in the last year - and it’s not just here. Energy prices are climbing around the world and as Axios’ Kate Marino has been writing, it could affect our post-pandemic economic recovery.

Good morning, Kate.

KATE MARINO: Good morning.

NIALA: Kate what's causing this global rise in energy prices?

KATE: Well, it's kind of a perfect storm of demand for energy skyrocketing while supply remains a little bit constrained. You know, if you think back to the beginning of the pandemic, there were very few flights taking place, people weren't going on trips, office buildings and movie theaters were shuttered. So the demand for energy was really low. A lot of oil and gas producers, you know, naturally they cut back on production. Oil and gas prices fell a lot at that point which made producers even less willing to produce if they're not gonna be able to sell it at a profit. And it's really just as simple as it's bouncing back in a huge way from those lows.

NIALA: What does this mean for the American consumer?

KATE: In the U.S., our energy prices have been higher this year. If you look at the Consumer Price Index or the CPI, which is one major measure of inflation, it's latest reading in September showed that energy costs were up 25% compared to a year ago. So, you know, if your electricity bill is $50 or $60 a month or more, I mean, that really adds up month after month now that this has been going on for a little while. And it does affect the country's economic recovery overall. Every dollar that goes to electric and heating bills is a dollar that isn't spent on shopping or going out to eat. So for people on tighter budgets, this can be a pretty significant impact and it does flow through to impact the overall economic recovery.

NIALA: And how are we seeing this play out in other countries? Like for example, in the U.K., this has been a real headache over the past couple of weeks.

KATE: Yeah, the problems sort of started to make headlines in Europe and in particular, the U.K. where they were facing natural gas shortages over the summer. The shortage of natural gas in Europe led some power companies to swap natural gas for oil and then that's been pushing up the prices of both natural gas and oil. And because these are global markets, not local markets, it does impact buyers and sellers and consumers all around the world.

NIALA: Do we know when we might see prices even out? What's it going to look like this fall?

KATE: Well, this is the million dollar question. In this case, some experts say that, you know, once supply chain bottlenecks even out, prices might start coming down and we just need a little time for the supply to get to the demand. But on the other hand, you do have multiple investment banks, including Bank of America, Goldman Sachs, they're forecasting oil at $100 a barrel by the end of the year. So, unfortunately the answer is no one really knows when we're going to get a little bit of relief from this price rally.

NIALA: Kate Marino is a business editor for Axios. Thank you, Kate.

KATE: Thank you.

NIALA: Back in a moment with new polling that shows Latina entrepreneurs still want to open new businesses.

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NIALA: Welcome back to Axios Today! I’m Niala Boodhoo.

Latinas are more likely to own or plan to open their own businesses than non-Hispanic women in the U. S., according to a new poll from Telemundo, the Latino Victory Foundation and Hispanics Organized for Political Equality. Telemundo's Marina Franco is with us now. Hi Marina.

MARINA FRANCO: Hi, Niala. Thank you so much for having me.

NIALA: Marina, can you break down these numbers for us? How significant are they?

MARINA: I think the most significant part of this poll is that it shows the resiliency amongst this community because they have been the hardest hit. So before the pandemic, Hispanic small businesses were opening at a far greater rate than any other groups, but within those Hispanic small businesses, Latina-owned small businesses were actually booming. So, then they were the most affected by the pandemic and its after effects in terms of loved ones lost, in terms of business closures. They had the most layoffs. They had the most closures according to a Stanford study. And in terms, of course, of unemployment. So it's very interesting that even after that, they still say that they are the most interested group in opening new businesses again.

NIALA: Marina, are there any specific stats that kind of stand out to you? Like what should people take away from the poll

MARINA: Yes for entrepreneurs, especially I think it is notable that it is twice the rate as non-Latinas who are interested in not only starting their own businesses, but that already do have their own business. And, of course, since before the pandemic, these Latina-owned businesses were also important employers. So even Small Business Administration data shows that they weren't just opening say a flower shop that they run themselves, they were employing more people. So the fact that they remain so willing to open up new businesses that they own, means that they will be employing other people as well.

NIALA: Marina Franco is a Reporter for Telemundo News and one of the co-authors of Axios Latino. Thanks, Marina.

MARINA: Thank you.

NIALA: It's been a devastating year for manatees in Florida. As of September 24th, 957 have died. That's the most ever since the state has been keeping records and it's more than 10% of the total population of the gentle giants of the waterways of Florida. Axios Tampa Bay’s Ben Montgomery is here to explain why. Hey Ben, what's going on here?

BEN MONTGOMERY: The first few months of this year were especially bad for the manatees. When they moved into their winter feeding grounds into the goons and rivers in Florida, they found a depleted amount of seagrass bed. The sea grasses here have been fading and deteriorating for quite some time. And so they started dying at a really rapid rate, broke all sorts of records.

NIALA: Are there any successful efforts underway to get sea grass in a healthier position for manatees?

BEN: The fact is there have been some polluters through the years in the state of Florida - you know, “Joe and Jane six pack” who fertilized their lawn because they want to keep green grass. Large industrial agriculture polluters have really harmed the waterway. There have been people who've found success in trying to restore seagrasses over the years, but it seems like it will start to come back and then be impacted negatively by even more pollution.

NIALA: Ben Montgomery is a Tampa Bay reporter for Axios. Thanks Ben.

BEN: Thanks so much.

NARRATOR: In a wondrous place known as the Hundred Acre Wood is a bear named Winnie the Pooh.

NIALA: Before we go today: for all you Pooh fans out there, a piece of what inspired those iconic words is up for sale.

EEYORE: Alright now, the first stick to pass all the way under the bridge wins. Now on your marks, get set, go

NIALA: That countryside bridge in southern England that inspired author A. A. Milne is up for auction today - it’s listed at 50,000 pounds, or almost 70,000 dollars but auctioneers are hoping it will go for five times that amount.

They’re also hoping the bridge will be bought and installed in a nearby museum so that Sussex doesn't lose one of it's proudest local cultural touchstones.

That’s all we’ve got for you today! You can reach our team at podcasts at axios dot com or reach out to me on twitter. You can also text me at (202) 918-4893.

I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.