The global appetite for energy is immense – and growing. Each day, the world consumes “85 million barrels of oil, 240 billion cubic feet of natural gas, 14 million tons of coal and 500,000 pounds of uranium.” The numbers are growing. Given China’s awakening economy, soon mankind’s thirst for oil will surpass 1,000 barrels a second. That’s enough to drain an Olympic swimming pool in 15 seconds. At that rate, demand would empty more than 38,000 swimming pools each week. As the numbers suggest, “Our birthright of abundant, reliable energy is coming to an end.” Historically, the world has passed through eras of increasing demand for fuel, creating rising pressure on markets and supply chains. This inevitably led to a series of “break points.” Each break point opened a period of innovation when infrastructures changed to adjust to the new energy demands. Ultimately the “energy cycle’s” elaborate dance between growth and dependency generates more demand and another innovation provoking break point. This is nothing new.
Today, oil consumption and economic growth are clearly related. Expanding economies tend to consume increased amounts of oil. As the global economy, driven by growth in the U.S., China, India and elsewhere, continues to expand, the demand for oil will also increase. China’s economic growth and its growing petroleum demand are closely linked. In fact, the alliance between energy use and economic expansion in China is following the U.S. model. The key question is not when the last drop of oil will spill from the world’s oil-distribution spigot. The question is when the world will reach the point of declining production. As oil becomes harder to discover and acquire, producers can fall behind the curve – not because there isn’t enough oil, but because the refineries can’t keep up or the oil is trapped in shale deposits.
To keep the global economy growing, production needs to increase each year. World demand isn’t staying level, it’s expanding. The impending collision between the thirst for oil and its diminishing availability simply indicates that a major energy break point is looming. Just as kerosene provided the nineteenth century’s energy breakthrough, today’s world needs an innovation or a new technology that will bridge the past, present and future. No single cure-all exists – not natural gas or nuclear power, and not even electric-powered vehicles. These all have important roles, but they are not sufficient to stave off the oil break point. The pain associated with break points and rebalancing is usually borne, disproportionately, by individuals. Companies and governments have the resources to find alternative energy sources and adjust, but regular citizens are trapped in the long lines, squeezed by constricted budgets and troubled by the twists of an uncertain future. Individually, you can take steps to protect yourself. Look for ways to conserve energy. Substitute SUVs for smaller, more fuel-efficient automobiles. As you make daily life decisions, operate with the understanding that energy prices are probably going to rise. The era of inexpensive gasoline and stable energy prices is over. Price volatility is the norm for the foreseeable future.
Historically, difficulties in obtaining a steady flow of energy have always given way to new technologies, methods and resources. Just as the great British leader Winston Churchill anticipated trouble looming on the horizon and shifted his country’s naval forces from coal to petroleum-based fuel, tomorrow’s leaders have an opportunity to see the oncoming break points before they arrive. This is their chance to find new methods and energy sources that will contribute to a brighter tomorrow.