Energy Crisis

An energy crisis occurs when there is a shortage of energy resources to meet our needs. In most cases it is actually a bottleneck somewhere in the system that causes the shortage and the result is that prices rise rapidly in a short time frame. This can happen for a variety of reasons but it is usually the result of failures in the market, usually when somebody has a monopoly over supply. Because the consequences of an energy crisis are huge, especially economically it is important that we do everything that we can to prevent them from happening. Perhaps you've already read some articles about the peak oild theory.

In the past an energy crisis was the result of a failure in the market and not the actual shortage of energy resources. We are now however at the point where there is a real risk that there will not be enough supply to meet demand. The area that most people talk about when they worry about the energy crisis is a shortage of oil. In reality we are still a long way from running out of oil even though the price has risen dramatically because the oil that was easiest to get to has already been used. That means that means that we have to use oil that is harder to get to and more expensive to produce.

While most of the attention when it comes to an energy crisis is oil the far greater concern should be electricity. These days it is nearly impossible to get a new power plant built because of all the regulations involved. The result is that there is a real risk that we will not be able to produce enough electricity to meet our needs. In addition the electrical grid that distributes the power is in need of major upgrading which may lead to a situation where the power can't get where it needs to be.

While there are concerns about the availability of energy there are ways to address the problem, the most obvious would be the use of alternative energies. There are lots of options here like solar power and wind power which are currently being significantly under used. The main reason for this is that they are not able to compete on cost with the more traditional forms of energy. However as we face a shortage of other sources of energy this will change and alternative sources of energy will become more attractive financially.

One thing that we do have to be careful with when we are looking at the use of alternative fuels is the consequences of using them. A classic example of this is the use of biofuels. For a time there was a great deal of hype about how biofuels would solve all of our energy problems. However people soon started asking what we eat if we turned all of our agriculture production into fuel. The result is that biofuels have lost a lot of popularity as a fuel source.