Energy Crisis

The future global economy is likely to consume ever more energy, especially with the rising energy demand of developing countries such as China and India. On top of this, energy demand is expected to grow by almost half over the next two decades. The charts below shows the trends of worldwide energy consumption and the energy consumption of three big giants, USA, China and India till 2040.

At present, we rely on coal, oil and gas (the fossil fuels) for over 80% of our current energy needs – a situation which shows little sign of changing over the medium-term without drastic policy changes. The problems associated with an over reliance of non-renewable energy sources is the fear that our energy resources are starting to run out, with devastating consequences for the global economy and global quality of life. At the same time, the tremendous risk of climate change associated with the use of fossil fuels makes supplying this energy increasingly difficult.

While the potential for a crisis if we run out of energy is very real, but there is still time before that occurs. In the past two decades proven gas reserves have increased by 70% and proven oil reserves by 40%. At expected rates of demand growth we have enough for thirty years supply. Moreover, better technology means that new oil and gas fields are being discovered all the time while enhanced recovery techniques are opening up a potentially huge array of unconventional sources, including tar sands, shale gas and ultra-deep water. While in the long term, the use of renewable sources of energy like harnessing wind and solar energy is inevitable, at present the costs associated are high and the efficiency of the power generated is low to make it viable for developing countries like India and China from adopting them on a large scale.
In the short term, of all the unconventional sources of