Introduction to Energy Supply
What are the defining characteristics of our current energy portfolio? What are the challenges associated with this supply? How will we meet future energy demand with socially and environmentally sustainable supply?
"People's need for energy is essential for survival, so it is not surprising that energy production and consumption are some of the most important activities of human life. Indeed, it has been argued that energy is the key 'to the advance of civilization,' that the evolution of human societies is dependent on the conversion of energy for human use."
The world’s energy demands face long run growth that is driven by rising population and worldwide living standards which will lead to increasing industrial and consumer use of energy. (See Demand for Energy).
Overall energy needs experienced a surge in the 19th century with the spread of the industrial revolution; these needs were served primarily by coal. By the mid twentieth century, oil became the leading fuel source. New resource discoveries helped to supply energy demand stemming from new modes of transport – automobiles and air travel - as well as from the spread of electricity. Oil’s position as the dominant source of energy was strengthened by new supplies and relatively low prices until 1973. During the oil shocks of 1973 and 1979, the average price of oil increased substantially, contributing to economic slowdowns and a discernible shift to other energy sources (see figure below) such as coal and nuclear. Triggered by these events, investments in energy efficiency helped to double the average miles per gallon in U.S. automobiles and Japan emerged as the most energy efficient country in the world.
In the last few years growing energy requirements eventually led to shortages in production capacity, prompting higher energy prices – up until mid-2008 – and an ongoing search for new energy resources. For example, high cost investments in deepwater frontiers, advanced recovery techniques and unconventional technologies were needed to help meet oil supply needs. And, production of clean burning natural gas, which has become increasingly important as an energy supply, has moved on to unconventional resources in North America, for example, to satisfy demand.
In recent years, coal has been the fastest growing source of fossil fuel energy, led by strong demand in Asia, substantial supplies, and its lower relative cost. (See Energy Prices). Growth in nuclear power has been flat since 2004 and limited by challenges associated with plant approvals and safety, waste storage, and disposal.