Economics of Energy



Economics of Energy

Introduction

This paper is about the economics of energy resources. This means that the production, supply and consumption of energy from different sources are studied in the latter paragraphs. We have also discussed different alternatives to energy produced from oil. Sustainable energy is also discussed which is produced using renewable resources. Another form of energy i.e. solar energy is highlighted in the end.

Supply & demand of Oil

Demand for hydrocarbons and their derivatives is controlled by the global supply markets. If it is perceived that there is or will be a shortage in supply in the short, medium or long term, commodity prices tend to remain stable or rise.

High demand raises the activities in all branches of industry to supply the consumer, and if instead there is a low demand, the effect is felt in all industry activities. Industrialized countries are the largest consumers of oil in the world. The North American region is one that consumes more oil even though it is one of those that have fewer reservations.

Consumption by Region

The ups and downs in supply and demand for oil may be longer or shorter periods, but have always been part of the oil business. It is not easy to make predictions about the general behavior of the global oil market in the medium and long term.

Currently the largest commercial oil flow is directed from the Middle East to Europe, Asia Pacific and the United States and from Russia to Western Europe. They are also important exports from Venezuela to the U.S. and to a lesser extent from Mexico to the same destination. Some projections estimate that during 2000-2030 the global energy demand increase at a rate of approximately 1.8% per year.

The effect of economic and population growth will balanced by an annual decrease in energy intensity of 1.2%, due to the combined effect of structural changes in the economy, technological advances and the increasing cost of energy.

World Energy Consumption - MM Tons Oil Equivalent

Currently the global demand for energy in developing countries is 40%, but demand is expected to grow rapidly, in contrast to the slowdown will experience the industrialized countries, whose energy demand will settle at a level close to 0.4% per year in the European Union.

World Energy Consumption

Fossil fuels will remain at the top of energy consumption by 2030, representing 90% of total supply. Oil will remain the main source of energy (34%), followed by coal (28%). The coal supply between 2000 and 2030 will be led by Asia, while natural gas will represent a quarter of the world's energy supply.

Data on consumption of energy by source

World Primary Energy Consumption by Region and Type

Data on Supply Of Energy

World Primary Energy Production and supply by Region and Type

World Energy Consumption by Region and Energy Source and Projections

Sustainable Energy

Sustainable energy (or renewable) is one that, unlike the traditional (costly, polluting and exhaustible), can be obtained from natural sources such as virtually endless sun, air, rain and water movement which strengthens swell the rivers and the ...