Yesterday, the UN released a report on global warming that said that the world is not prepared for the extreme weather and other challenges. The report says there is high risk level for diseases in Africa, increased wildfires in North America, and decreased food production and starvation in South America. The effects of global warming on the economy is believed to be significant. A rise of 2.5 degrees could lead to a lose of .2%-2.5% of income for the global economy. The reports states that developed countries need $70-$100 billion a year to fund the methods required to offset the impact of climate change. The future isn’t the only thing that is worrying scientists. This past winter has been one of the coldest ones on record in the US. This has not only effected agriculture but also the energy industry. The average temperature for the winter was 6 degrees colder than normal. The chilling effects of the weather saw natural gas prices skyrocket and natural gas supplies fall to lows not seen since 2001. In order for natural gas supplies to regain the necessary amount before next winter, producers are going to have to increase extraction of natural gas. This is going to cause the producers higher costs because it will cost more to extract more natural gas and the price of natural gas is going to fall as less of it is used during the spring and supplies increase.
Unfortunately for natural gas producers, the costs mentioned above aren’t the only ones caused by global warming. Global warming has impacted many of the materials used in fracking, making it more expense to extract and more difficult to extract larger quantities. One of the key components to fracking is a certain type of white sand located in Wisconsin. The sand is used to open the cracks to allow oil and gas to flow up to the surface. The recent winter freeze though has made it extremely difficult to extract and transport. One of the major issues is that both sand and cement producers use the same freight system and because both of these industries are booming right now, there aren’t enough freights to ship the necessary amount of sand. This has led to costs to transport sands to be predicted to be 12% higher. The average price of sand drilling is expected to rise from $56 from $50. Frack sand prices is predicted to continue to increase for the next three years, continuing to support higher natural gas and oil prices.