Anenergy crisis orenergy shortage is any significantbottleneck in the supply ofenergy resources to aneconomy. In literature, it often refers to one of the energy sources used at a certain time and place, in particular, those that supplynational electricity grids or those used as fuel in industrial development. Population growth has led to a surge in the globaldemand for energy in recent years. In the 2000s, this new demand – together withMiddle East tension, the falling value of the US dollar, dwindling oil reserves, concerns overpeak oil, andoil price speculation – triggered the2000s energy crisis, which saw theprice of oil reach an all-time high of $147.30 per barrel ($926/m3) in 2008.[citation needed]
Most energy crises have been caused by localized shortages, wars and market manipulation. However, the recent historical energy crises listed below were not caused by such factors.
Most energy crises have been caused by localized shortages, wars and market manipulation. Some have argued that government actions like tax hikes, nationalisation of energy companies, and regulation of the energy sector shift supply and demand of energy away from its economic equilibrium.[1] However, the recent historical energy crises listed below were not caused by such factors.Market failure is possible whenmonopoly manipulation of markets occurs. A crisis can develop due to industrial actions likeunion organizedstrikes or government embargoes. The cause may beover-consumption, aginginfrastructure,choke point disruption, or bottlenecks atoil refineries or port facilities that restrict fuel supply. An emergency may emerge during very cold winters due to increased consumption of energy.
Large fluctuations and manipulations in futurederivatives can impact price. Investment banks trade 80% of oil derivatives as of May 2012, compared to 30% a decade ago.[2] This consolidation of trade contributed to an improvement of global energy output from 117,687 TWh in 2000 to 143,851 TWh in 2008.[3] Limitations on free trade for derivatives could reverse this trend of growth in energy production. Kuwaiti Oil Minister Hani Hussein stated that "Under the supply and demand theory, oil prices today are not justified," in an interview with Upstream.[4]
Pipeline failures and other accidents may cause minor interruptions to energy supplies. A crisis could possibly emerge after infrastructure damage fromsevere weather. Attacks by terrorists ormilitia on important infrastructure are a possible problem for energy consumers, with a successful strike on aMiddle East facility potentially causing global shortages. Political events, for example, when governments change due to regime change, monarchy collapse,military occupation, andcoup may disrupt oil and gas production and create shortages. Fuel shortage can also be due to the excess and useless use of the fuels.
"Peak oil" is the period when the maximum rate of globalpetroleumextraction is reached, after which the rate of production enters terminal decline. It relates to a long-term decline in the available supply of petroleum. This, combined with increasing demand, significantly increases the worldwide prices of petroleum-derived products. Most significant is the availability and price of liquid fuel for transportation.
The US Department of Energy in theHirsch report indicates that "The problems associated with world oil production peaking will not be temporary, and past 'energy crisis' experience will provide relatively little guidance."[20]
To avoid the serioussocial andeconomic implications a global decline in oil production could entail, the 2005 Hirsch report emphasized the need to find alternatives, at least ten to twenty years before the peak, and to phase out the use of petroleum over that time. Suchmitigation could include energy conservation, fuel substitution, and the use of unconventional oil. Because mitigation can reduce the use of traditional petroleum sources, it can also affect the timing of peak oil and the shape of theHubbert curve.
Energy policy may be reformed leading to greaterenergy intensity, for example inIran with the2007 Gas Rationing Plan in Iran,Canada and theNational Energy Program and in the US with theEnergy Independence and Security Act of 2007 also called theClean Energy Act of 2007. Another mitigation measure is the setup of a cache ofsecure fuel reserves like the United StatesStrategic Petroleum Reserve, in case ofnational emergency.Chinese energy policy includes specific targets within their 5-year plans.
Andrew McKillop has been a proponent of a contract and converge model or capping scheme, to mitigate both emissions ofgreenhouse gases and a peak oil crisis. The imposition of acarbon tax would have mitigating effects on an oil crisis.[citation needed] The Oil Depletion Protocol has been developed byRichard Heinberg to implement a powerdown during apeak oil crisis. While manysustainable development and energy policy organisations have advocated reforms toenergy development from the 1970s, some cater to a specific crisis in energy supply includingEnergy-Quest and theInternational Association for Energy Economics. TheOil Depletion Analysis Centre and theAssociation for the Study of Peak Oil and Gas examine the timing and likely effects of peak oil.
EcologistWilliam Rees believes that
To avoid a serious energy crisis in coming decades, citizens in the industrial countries should actually be urging their governments to come to an international agreement on a persistent, orderly, predictable, and steepening series of oil and natural gas price hikes over the next two decades.
Due to a lack of political viability on the issue, government-mandated fuel prices hikes are unlikely and the unresolveddilemma of fossil fuel dependence is becoming awicked problem. A globalsoft energy path seems improbable, due to therebound effect. Conclusions that the world is heading towards an unprecedented large and potentially devastating global energy crisis due to a decline in the availability of cheap oil lead to calls for a decreasing dependency onfossil fuel.
Other ideas concentrate on design and development of improved, energy-efficient urban infrastructure in developing nations.[21] Government funding for alternative energy is more likely to increase during an energy crisis, so too are incentives foroil exploration. For example, funding for research intoinertial confinement fusion technology increased during the 1970s.
Kirk Sorensen and others[22] have suggested that additional nuclear power plants, particularlyliquid fluoride thorium reactors have theenergy density to mitigateglobal warming and replace the energy frompeak oil,peak coal andpeak gas. The reactors produce electricity and heat so much of the transportation infrastructure should move over to electric vehicles. However, the high process heat of themolten salt reactors could be used to makeliquid fuels from any carbon source.
Themacroeconomic implications of asupply shock-induced energy crisis are large, because energy is the resource used to exploit all other resources. Oil price shocks can affect the rest of the economy through delayed business investment,[23] sectoral shifts in the labor market,[24] or monetary policy responses.[25] Whenenergy markets fail, an energy shortage develops. Electricity consumers may experience intentionally engineeredrolling blackouts during periods of insufficient supply or unexpectedpower outages, regardless of the cause.
Industrialized nations are dependent on oil, and efforts to restrict the supply of oil would have an adverse effect on the economies of oil producers. For the consumer, the price ofnatural gas,gasoline (petrol) anddiesel for cars and other vehicles rises. An early response from stakeholders is the call for reports, investigations and commissions into the price of fuels. There are also movements towards the development of moresustainable urban infrastructure.
In the market, new technology andenergy efficiency measures become desirable for consumers seeking to decrease transport costs.[27] Examples include:
Other responses include the development ofunconventional oil sources such assynthetic fuel from places like theAthabasca Oil Sands, morerenewable energy commercialization and use ofalternative propulsion. There may be arelocation trend towardslocal foods and possiblymicrogeneration,solar thermal collectors and othergreen energy sources.
Tourism trends andgas-guzzler ownership varies with fuel costs. Energy shortages can influence public opinion on subjects fromnuclear power plants to electric blankets. Buildingconstruction techniques—improvedinsulation, reflective roofs, thermally efficient windows, etc.—change to reduce heating costs.
The percentage of businesses indicating that energy prices represent a barrier to investment has increased in 2022 (82%) as found in recent surveys, particularly for those who see it as a significant obstacle (59%). According to varied energy prices and energy intensity across nations and industries, various countries have different percentages of businesses that view energy costs as a key obstacle, ranging from 24% inFinland to 81% inGreece for example.[28]
An electricity shortage is felt most acutely in heating,cooking, andwater supply. Therefore, a sustained energy crisis may become ahumanitarian crisis.If an energy shortage is prolonged acrisis management phase is enforced by authorities.Energy audits may be conducted to monitor usage. Various curfews with the intention of increasingenergy conservation may be initiated to reduce consumption. For example, to conserve power during the Central Asia energy crisis, authorities inTajikistan ordered bars and cafes to operate by candlelight.[29]
In the worst kind of energy crisisenergy rationing and fuelrationing may be incurred.Panic buying may beset outlets as awareness of shortages spread. Facilities close down to save on heating oil; and factories cut production and lay off workers. The risk ofstagflation increases.[citation needed]
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