The big freeze of 2010
Posted by butalidnl on 9 January 2010
The big freeze of 2010 is now on its 9th day. It’s been freezing here in the Netherlands since New Year’s Day, and its been more or less the same in North America and Asia for the same period. We get snow and freezing temperatures here every winter, but it usually keeps on for a week or two. This winter, we have already entered the third week of below-freezing temperatures (if we count the freeze before Christmas), and things are getting too cold for too long for people and the infrastructure. And with the news that the cold seems to be feeding on itself, and thus may last much longer, the economy is sure to suffer.
Higher price of oil
One obvious result of the big freeze is that the price of oil will surely rise. It has already exceeded $80/barrel, and the freeze is just over two weeks old. Imagine what would happen when the freeze goes on for a whole month. In some countries, utilities are being urged to use up their coal to free up the supply of oil and natural gas for home use. But the coal is sure to also run out after a while.
The snow and cold are affecting all kinds of transportation. Airport runways are sometimes closed due to the snow; train schedules are cut down, or even sometimes cut off due to the cold and snow; and even trucks and cars couldn’t get through all the snow in the roads. All these could be absorbed if the snow stops right away – with more intensive schedules after to recover the lost time and miles; but they could no longer recover if the cold lasts two weeks more.
The supply of salt used to keep the roads open is fast running out in many countries in Europe. When it does, we will just have to live with snowed-in highways. And in addition to the inconvenience this would cause personal travel, it also wrecks havoc on the movement of supply trucks with all kinds of necessities, from soap to flour..
And there is the matter of it being so cold that people do not want to go shopping. In fact, people ration their time out, and generally buy only necessities. What this would do to the output of the retail sector is anyone’s guess. At least, the sales of winter-related things like sweaters, socks, thermal underware, etc. should perk up a bit.
And then there are the other disruptions: citrus fruits in Florida are in danger of freezing and getting rotten in the process; school closures forcing their parents not to report to work; floods in the Balkans due to melting snow; buildings collapsing due to the weight of the snow on their roofs.
All these disruptions and more will be taken in stride if the snows end right away. However, the way things look right now, the cold spell will last at least a week or more longer. Thus, the economy will surely suffer from the big freeze of 2010.