Energy crisis

When a supply of energy resources is not available to create sufficient energy for a particular area, an energy crisis occurs. Places around the world have experienced energy crises since the early twentieth century, though energy crises became more widespread and serious in the twenty-first century. As energy resources have become globalized and many countries vie for the same limited sources, an energy crisis in one place may cause similar crises in other places. Energy crises affect all aspects of countries’ economies and usually have numerous, intertwined causes.

Background

Energy crises occur when people lack the resources that they need to create enough energy—for electricity, heat, or machines. Although people have used various energy sources for heat and mechanical energy for millennia, energy crises became society-wide problems only after the widespread adoption of electricity and fuel-powered motors. In the 1800s, British scientists Michael Faraday discovered basic principles about electricity generation, and German inventor Karl Benz invented an automobile that used fossil fuel for energy. These technological developments led to dramatic increases in energy consumption in the early twentieth century. Technology continued to develop throughout the twentieth century, which led to an even larger human dependence on energy. In the late twentieth and early twenty-first centuries, economies around the world were completely dependent on electricity and motor-powered vehicles. An energy crisis, which limits the amount of energy people and industries have access to, has the power to impact every aspect of an economy, and prolonged or drastic energy crises affect the global economy.

Overview

Energy crises have happened in various parts of the world throughout the twentieth and twenty-first centuries, though they happen only in places that depend on electricity and other forms of energy. Energy production helped develop economies around the world, and, in turn, those economies became reliant on energy. These crises happen for many reasons, including geopolitics, natural disasters, technological developments, and social norms. Although energy crises are created by a lack of resources to create energy, they have happened even when a plentiful supply of resources exists but is unavailable to a particular country or group.

The first energy crisis in the United States occurred in the early twentieth century after World War I. As early as World War I, world leaders—including politicians in the United States—linked the ability to produce energy with national security. The technology used during World War I, including ships and automobiles, required fossil fuels. A common slogan among Americans during the war was “Petroleum Will Win the War,” as they realized that the technology fueled by petroleum was an important factor in winning the war. After the war, the United States continued to rely on fossil fuel, and the country even dramatically increased its energy consumption after the war because more consumers were using automobiles and electricity. Furthermore, scientists at the time speculated that the United States had used nearly its entire supply of oil. Although new technology would help people extract more oil from the land, the late 1910s and early 1920s were the country’s first energy crisis.

The US government and industry leaders responded to the crisis, with the government enforcing new regulations on oil producers and industries implementing conservation efforts to reduce their oil consumption. American politicians also became interested in drilling for oil in other countries to increase the world’s supply of oil. Additional regulations also helped the United States maintain its oil supply. During World War II, the country again faced an energy crisis. Domestic oil consumption grew significantly from 1940 to 1950, and by 1950 Americans were consuming more oil than they were producing. Again, the United States sought to drill oil in other countries to supplement domestic production, and the Middle East became a popular location from which to import oil. European countries also began importing oil from other countries, including those in the Middle East.

By the 1970s, many countries saw a dramatic increase in the per-person demand for energy since the beginning of the century. Furthermore, the world’s population had increased from less than 2 billion in 1900 to approximately 3.5 billion in 1970. This population increase further increased the world’s energy demand. Despite the growing demands, new technology allowed humans to extract oil in new places throughout the world. In total, the world had a plentiful supply of fossil fuels; however, certain regions had more control over oil production than others. In the oil-rich Middle East, countries formed the Organization of Petroleum Exporting Countries (OPEC), which sets prices and export rates for its member countries. In 1973, the members of OPEC clashed with the United States on its support for Israel during the Arab-Israeli War, and OPEC announced an embargo against the United States. The United States faced an energy crisis because of the embargo, even as domestic demand for oil continued to grow. Again, the US government responded to the crisis with government regulations. The federal government created the Federal Energy Administration, which eventually became the Department of Energy. President Richard Nixon also instituted a rationing program that was meant to curb demand and ensure steady prices. The government’s response to the embargo did little to curb the crisis. OPEC finally ended the embargo in 1974, which also ended the energy crisis in the United States.

In the twenty-first century, demand for energy continued to increase as the world’s population grew and more countries industrialized their economies. The world used more energy than ever before, and people produced most of the energy they used from burning fossil fuels, which releases carbon and other greenhouse gases into the atmosphere. Although scientists had warned that continued reliance on fossil fuels would cause climate change, most countries and industries made few changes to renewable energy sources, such as solar and wind. In the early 2000s, generating electricity with such renewable sources was more expensive than extracting fossil fuels. The world faced a new type of energy crisis starting in the 2000s as governments and organizations tried to reduce the harm caused by energy consumption. By the 2010s some governments made pledges to consume more energy created by renewable resources. Some also passed laws reducing the emissions that new vehicles could produce.

Traditional energy crises also occurred in the 2000s and 2010s. In 2010, Pakistan experienced an energy crisis. Surging demand and the failure of the power infrastructure helped cause the crisis. Thousands of people were left without power for days because of the crisis. In the late 2010s and early 2020s, Gaza also experienced an energy crisis, with thousands of people being cut from electricity for days at a time. The cause of Gaza’s energy crisis was mostly geopolitical, though Gazans also had problems affording energy that was available because of its high cost. The crisis in Gaza even caused the shutdown of numerous hospitals and other healthcare facilities.

The world faced another energy crisis in the early 2020s. During this crisis, the world’s economies and energy production were affected by the COVID-19 global pandemic that started in 2020. When the world’s economies finally began to reopen after the pandemic, the entire world seemed to demand more energy all at once—which taxed the world’s energy production capabilities. The crisis was made worse because of dramatically increased oil prices, which increased because of inflation and a rise in production costs that occurred during the pandemic. Furthermore, the specter of climate change continued to motivate countries and individuals to attempt to decrease the burning of fossil fuels. By the early 2020s, the price of energy produced by renewable methods was roughly the same price as energy produced with fossil fuels. Although this helped people use more renewable energy sources, the world did not produce enough energy from renewable sources to completely end fossil fuel consumption. Other factors, such as natural disasters and failing infrastructure, also made energy markets more volatile. The volatility in the markets made them prone to crises. For example, China faced an energy crisis in 2021 because it reduced the amount of coal it burned, and the pandemic decreased the production of other fossil fuels. In the United States, energy grid failures caused by natural disasters also caused short-term energy crises. Countries such as India and Pakistan also faced energy crises at the time because larger, wealthier nations, such as China and European countries, imported more fossil fuels to cover their own domestic demands. This reduced the overall availability of energy resources. Governments again took action to address the energy crises happening around the world. For example, China began to again increase coal production for briefly to help correct the energy crisis it faced. Furthermore, in 2022 the United States and some European countries made renewed pledges to decrease fossil fuel consumption.

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