Energy Sector

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Energy Sector


Twentieth-century affluence in the industrialized countries relied on the highly concentrated energy found in fossil fuels, especially easily accessible oil. Steep increases in the productivity of workers resulted in economic growth and rising household incomes, which transformed the experience of everyday life. In particular, automobile-dependent suburbs spread, and increasingly larger living spaces became filled with electrified appliances of all descriptions.

The industrialized countries, with less than 20 percent of the worlds population, still use more than 60 percent of all primary energy. However, most future growth in production and consumption will take place in developing countries with huge populations eager to emulate lifestyles of the affluent. A pressing question is how future demand for energy can be accommodated.

With most commercial energy long provided by fossil fuels, networks of facilities for prospecting, extracting, refining, and distributing are well established. But the richest oil reserves are being depleted, and alternatives to fossil fuelsnuclear power and various forms of renewable energypose a variety of challenges requiring substantial investments in research and infrastructure. Such investments will be forthcoming only when alternatives such as nuclear power have long-term prospects for social acceptability, which is necessary for profitability.

Since energy is required for all aspects of production and consumption, a sharp increase in its price can have a substantial dampening effect on the entire economy. The experience of the oil embargo by the Organization of Petroleum Exporting Countries (OPEC) and sharp increases in oil prices in the 1970s demonstrated the vulnerability of even the most powerful oil-importing countries and their susceptibility to panic, inflation, and recession. Some of the incremental wealth amassed by oil exporters ended up as loans to developing countries (in part to pay for oil) that they were unable to reimburse. Such a sequence of events could easily be repeated.

The history of human use of fuels and minerals has been a race between the exhaustion of the richest deposits, which bids up the price, and the development of powerful new technologies that lower the costs by exploiting lower-quality resources or obtaining more work per unit of raw-energy input. Temporarily higher prices for oil could stimulate massive investments in research and infrastructure to expand the long-term supply of energy from unconventional sources. However, the costs and risks, including those associated with the inevitable environmental impacts, may be extremely high. In parallel with the search for new sources of supply, the effective demand for energy services needs to be substantially reduced by changes in the energy-intensive lifestyles made possible by cheap oil.

Lifestyle decisions about housing, mobility, and diet have the most impact on household demand for energy. The affluent have come to require diets rich in animal products, foods transported long distances, large housing spaces with year-round temperature controls, personal cars for trips to work and shopping, and air travel for recreation. It remains to be seen if a marked shift in lifestyles can be achieved voluntarily, either as a response to crisis or in search of what has been called a new American dream. One hopes that the race to build consumer societies in developing countries can be based on more sustainable lifestyles. While engineering research and corporate research and development focus on new technologies for enhancing energy supply and improving efficiency, social scientists face the double challenge of developing credible scenarios involving sustainable lifestyles and evaluating possible ways to achieve those scenarios.

SEE ALSO Energy; Energy Industry; Natural Resources, Nonrenewable; Petroleum Industry; Solar Energy


Smil, Vaclav. 2000. Energy in the Twentieth Century: Resources, Conversions, Costs, Uses, and Consequences. Annual Review of Energy and the Environment 25: 2151.

Faye Duchin