Anyone have a view on what happens to the energy industry in the event we enter a great depression? For context, here's what happened in the 1930s:
Source: Historical Statistics of the United States p165; BP Statistical Review of World Energy 2011 (.xls)
I do not of what relevance data from the US Great Depression would have on the modern world. The car was only getting going at that time as well as electrification and of course commercial air travel was still unheard of. A better example would be our own case. Our GNP is down circa 15% from peak which is of itself a 'depression' and if you look at our energy usage you will see that we are consuming 25% less oil than peak from 200k to 150k/bpd. Electricity demand is also well down, you can get the figures from Eirgrid.
There was not much energy conservation during the thirties.
Over 25% of our energy usage could be reduced by insulating to a passive house standard.
As far as I'm aware, world energy production dipped slightly a couple of years back but increased in 2010 and was expected to increase again in 2011.
Yip, in a depression, when the price of a commodity goes down, consumption goes up!Originally Posted by cimon9999
Anyone have a view on what happens to the energy industry in the event we enter a great depression? For context, here's what happened in the 1930s:
Source: Historical Statistics of the United States p165; BP Statistical Review of World Energy 2011 (.xls)
Or to put it another way, when people stop buying certain products, those who sell them reduce the price of same.
As they should.
Until the advent of the next boom?
I understand what your getting at... with an economic depression there will of course be less energy consumption due to factories closing down, less commuters on the road, less people able to spend money on heating and so on.
2012 is going to be really interesting, Iran is expecting to enter into war with Israel and possibly US.. this will obviously send the price of oil to new heights. With that there will be less economic output due to high costs of shipping, transportation and general operations of any sound economy reliant on fuels. This will then affect food production and prices.
The EU been an oil net importer will be heavily affected by this.. while the currency is already debt ridden, less economic output will surely set it into decline. The US dollar many hold a little longer due to its global reserve currency status and linkage to the oil trade. Even still, it cannot ignore the physical forces of the market much longer. It is heavily in debt and with more bailouts and Central bank lending it will continue to add pressure to bond holders.
What we are witnessing is a controlled demolition of the world economy.. the worst hasnt even begun.
Without as much as a contingency plan, the Irish government are leading us blindly into the abysses.. while they could be availing of the great opportunity to help our nation prosper by purchasing large reserves of precious metals which in the event of currency devaluation will increase in value and allow our nation to function while the rest of the world is screaming on the streets to be fed.
Consider it rude, the support of economic sovereignty for which your German masters have no say.
Good question cimon9999, particularly for a country as heavily dependent on imports for primary energy (90%) as Ireland.
Whilst some countries have succeeded in reducing the energy intensity of their economies over the last few decades, Ireland has vastly increased the energy intensity of our economy, which will bite us savagely were another great depression to occur.
The domestic energy industry as presently constituted would be forced to contract as its feedstock became increasingly unaffordable and this would of necessity exert further depressive force on Ireland's economy.
In the great depression of the 1930's, building out the global electricity infrastructure served as a major economic stimulus and from an energy industry perspective, Ardnacrusha and its smaller hydro cousins enabled the ESB to grow and prosper, perhaps we might be forced to rely once again on our renewable resources
From the oil perspective the situation is very different from 1929, the oil industry now depends heavily on unconventional sources, including deep offshore, which are very capital intensive and this leaves a lot less headroom for serious and sustained price reduction.
In fact as the competitive pressure of LNG on US shale gas prices begins to recede due to the increased markets in Asia, we now witness the rumblings from within the industry about the need to begin to recoup capital outlay, the majors have now almost completed their acquisitions of the minors, which means that the trail of sugar daddies is coming to an end.
Who knows, maybe Corrib gas will begin to flow sometime this decade and we might see a new renaissance for gas conversion kits for our cars, which saved our bacon in the 1970's and 80's.
Best regards, Pat. ____please help test our new site
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A good point. If oil consumption is a leading indicator, then things are looking down again:
Source: IEA OMR
That said, there doesn't seem to be much change in electricity or total energy consumption:
Source: BP Stat Rev
Source: Eirgrid
This is worth a watch.
Anyway, the current fossil fuel based (for the most part) energy supply system will have difficulty keeping up with global demand.
See this graph, global per capita energy usage.
World Bank, World Development Indicators - Google Public Data Explorer
Now, see this graph, global population growth.
World Bank, World Development Indicators - Google Public Data Explorer
Now, do the maths.
If both general trends continue upwards there will be serious issues meeting supply in the future. This will be reflected in the increasing cost of energy (this is already true) and eventually scarcity.
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