From less than 6200 MTOE, Metric Tons of Oil Equivalent, in 1973, global primary energy supply has risen by more than 100% to just below 13400 MTOE in 2012. Global energy demand is expected to jump by 35% by 2035 due to rising global population and demand from Asian countries like India and China. However, it is unlikely that traditional oil will be adequate to meet this ever-growing demand for energy.
Currently, oil and coal together cater to more than 60% of the global energy demand. Presuming that consumption patterns don’t change significantly, the world’s oil and coal reserves are expected to run out in the next 60-80 years and 120-140 years respectively. With renewable sources of energy contributing just 13.5% of the world’s energy, it is obvious that the world is heading towards a significant shortage of energy.
The Time to change is now
Now that it is evident that the current energy production and consumption patterns are not sustainable, businesses, and the world in general, should focus on adapting to alternate sources of energy. Our entire modern civilization is completely dependent on a reliable and efficient energy source for its existence. Imagine a world without electricity and gasoline. Once this happens, all industries will stop functioning and the entire global transportation infrastructure will collapse. If businesses wish to survive, then they will have to start planning the change immediately.
You cannot wait until oil runs out before planning a switch to nuclear power, renewable energy, or unconventional oil. Each energy source has its own unique advantages and challenges, and planning for the change in advance is the best way to minimize its impact on your business.
Your business can adapt to the energy shortage in the following ways:
- Continue using fossil fuels and start preparing for a shift in the future.
- Start using alternate fuels along with fossil fuels.
- Plan a switch to alternate fuels in a time-bound manner even before fossil fuels are depleted.
Think out of the box
Businesses, small and big, are guilty of equating alternate energy sources with nuclear power or renewable sources of energy like solar and wind power. Energy expert Daniel Yergin has highlighted three alternate sources of energy that have nothing to do with renewable energy. Unconventional oil like shale oil and deepwater oil wells combined with natural gas can prove to be an effective substitute to oil and coal.
Instead of focusing on the shortfalls of nuclear and renewable energy, you can plan a shift to these unconventional sources of energy for your business. This will ensure your firm is prepared for the inevitable drying up of oil and coal reserves even if solar or wind energy technology has not developed quickly enough to free your business from its dependence on fossil fuels.