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An energy crisis is any great shortfall (or price rise) in the supply of energy resources to an economy. It usually refers to the shortage of oil and additionally to electricity or other natural resources. The crisis often has effects on the rest of the economy, with many recessions being caused by an energy crisis in some form. In particular, the production costs of electricity rise, which raises manufacturing costs. For the consumer, the price of gasoline (petrol) and diesel for cars and other vehicles rises, leading to reduced consumer confidence and spending, higher transportation costs and general price rises.
Economy
Oil demand Transportation represents the greatest demand for crude oil, followed by heating and power generation. In addition, the plastics, pharmaceuticals and synthetic fibre industries rely on crude oil to manufacture feedstocks for their production. The demand for heating oil during the northern hemisphere winter produces seasonal fluctuations in demand, typically building in the lead up to winter. The United States has by far the largest, consuming around 25% of the world's total oil production and 40% of the world's gasoline production, while creating 21.4% of Gross World Product(GWP) (The population of the United States is about 5% of the total world population). Due to depleted domestic reserves and expanding demand each year, approximately 2/3 of the oil and gasoline consumed by the U.S. is being imported from foreign countries. This dependency leaves the U.S. highly vulnerable to any supply disruption and/or ratcheting up of prices. Historical crises
Peak oil There has been much debate about peak oil, which is defined as the point at which world oil production peaks and then goes into irreversible decline. Proponents of this theory argue that because oil is being used much faster than it is being found, and that as current oil fields go into decline there will not be enough new ones to replace them. Mainly because of insufficient and/or inaccurate data on world oil reserves, many debate that either this point has already occurred, will occur within the next decade while others argue that it will not happen for many decades. * Future and alternative sources of energy It is possible that the world is heading towards a global energy crisis due to a decline in the availability of cheap oil and recommendations to a decreasing dependency on fossil fuel. This has led to increasing interest in alternate power/fuel research such as fuel cell technology, hydrogen fuel, biomethanol, biodiesel, Karrick process, solar energy, tidal energy and wind energy , and fusion energy. To date, only hydroelectricity and nuclear power have been significant alternatives to fossil fuel (see Future energy development), with big ecological problems (residues and water spending). Hydrogen gas is currently produced at a net energy loss from natural gas, which is also experiencing declining production in North America and elsewhere. When not produced from natural gas, hydrogen still needs another source of energy to create it, also at a loss during the process. This has led to hydrogen being regarded as a 'carrier' of energy rather than a 'source'. There have been alarming predictions by groups such as the Club of Rome that the world would run out of oil in the late 20th century. Although technology has made oil extraction more efficient, the world is having to struggle to provide oil by using increasingly costly and less productive methods such as deep sea drilling, and developing environmentally sensitive areas such as the Arctic National Wildlife Refuge. The world's population continues to grow at a quarter of a million people per day, increasing the consumption of energy. The per capita energy consumption of China, India and other developing nations continues to increase as the people living in these countries adopt more energy intensive lifestyles. At present a small part of the world's population consumes a large part of its resources, with the United States and its population of 300 million people consuming far more oil than China with its population of 1.3 billion people. Efficiency mechanisms such as Negawatt power can provide significantly increased supply. It is a term used to describe the trading of increased efficiency, using consumption efficiency to increase available market supply rather than by increasing plant generation capacity. See also | ||||||||||||
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