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Blackstone CEO warns energy crisis may spark riots

2021-10-26T21:55:40.364Z

Blackstone CEO Stephen Schwarzman called on governments to take action in the face of the energy crisis and the transition to clean energy.



How should the global energy transition be?

1:31

New York (CNN Business) - 

Blackstone CEO Stephen Schwarzman warned Tuesday that high energy prices are likely to trigger social unrest around the world.

"We're going to experience a real power shortage. And if there is a shortage, the costs increase. And it's probably going to cost a lot more," the private equity billionaire told CNN International's Richard Quest at a conference in Saudi Arabia.

Oil prices in the United States topped $ 85 a barrel on Monday for the first time in seven years.

Gasoline prices continue to rise, approaching US $ 3.40 a gallon nationally, according to AAA.

Natural gas prices have also skyrocketed, especially in Europe and Asia, causing factories to close.

"People are going to be very unhappy all over the world, especially in emerging markets, but also in the developed world," Schwarzman told the Future Investment Initiative summit.

"What happens then, Richard, is that you have a real malaise. This defies the political system and everything is totally unnecessary."

Part of the problem, said the Blackstone billionaire, is that fossil fuel companies are finding it increasingly difficult to borrow to finance their expensive production activities, especially in the United States.

And without new production, the supply will not hold.

  • Key US inflation report: prices won't return to normal anytime soon

"If you try to get money to do drilling, it is almost impossible to get it," Schwarzman said, adding that this is happening on an "extremely widespread scale."

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Schwarzman called on governments to agree on the rules of the game so that society can successfully overcome the energy transition.

"There is unanimity that something must be done, but the transition from where we are today to a green world is totally undefined," he said.

"Inflation is definitely more than transitory"

The energy crisis is amplifying inflationary pressures as the world economy recovers from the covid-19 pandemic.

Not only does gasoline cost consumers more, but the government also expects heating costs for homes to rise sharply this winter.

Businesses are also being affected by rising energy prices.

BlackRock CEO Larry Fink said one of the problems is that lawmakers are taking steps to curb the supply of fossil fuels faster than demand declines.

  • Inflation will drop to acceptable levels in the second half of 2022, says the US Treasury secretary.

"Short-term policies related to environmentalism in terms of restricting the supply of hydrocarbons have created energy inflation, and we are going to live with that for some time," Fink told the conference.

The energy crisis is one reason the BlackRock boss doesn't think inflation is just a short-term problem, as the Federal Reserve and the White House have argued for much of this year.

"Inflation is definitely more than transitory," Fink said.

"We are in a new regime."

Economic CrisisEnergy

Source: cnnespanol

All news articles on 2021-10-26

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