Energy: The Challenge Ahead
Authors: Howe R.J. 
Published: December 2007

Introduction

In planning my presentation, I realized that this audience would be quite different from most of those I have spoken to in the past several years on the subject of energy. By virtue of your jobs and your interests, you already recognize that this country has a serious energy problem. Also, most of you are actively engaged in trying to solve it. What I want to give you this morning is not an account of why we have an energy crisis or a list of which parties may be at fault. Instead, I want to emphasize the magnitude of the problem and propose some solutions to it. Hopefully, the information I present will set the stage for subsequent presentations present will set the stage for subsequent presentations during this 2-day symposium. I will start with the numerical information, then discuss some options, and draw several conclusions. We have all heard many times that the U. S., with only 6 percent of the world's population, consumes about one-third of the world's energy. What we often do not hear is that we produce about 30 percent of the world's economic output with this energy. Thus, we are doing a fairly good job with the energy we are using. Another important aspect of these statistics is the tremendous spread in per capita energy consumption among the various nations of the world.

ENERGY CONSUMPTION

Table 1 illustrates this point. Energy consumption is shown in million Btu's per capita per year. There is a 70-to-1 spread between the U. S. and India. And a 3-to-1 spread between the U. S. and Japan. These differences are also reflected in the relative standards of living of the countries shown. I hasten to add that these are 1970 figures, and, in many cases, the gaps are closing, as we will see in a moment. There is also a direct relationship between economic growth as measured by GNP and energy demand, as shown in Fig. 1. Total U. S. energy consumption is shown in the lower curve. The other curve shows the ratio of energy consumption to GNP in constant 1958 dollars. As you can see, this ratio has not varied too much over the past 20 years. Most forecasters are saying that this ratio will remain about constant during the next 15 years.

WORLD ENERGY DEMAND

As I mentioned earlier, the differences in per capita energy consumption rates between the U. S. and certain other countries are closing. This is illustrated by our forecast of the compounded energy growth rates shown in Table 2. While U.S. energy demand is forecast to grow 4.3 percent per year, we are forecasting a rate of 5.4 percent in Europe; 8.2 percent in the Far East; 6.3 percent in other areas percent in the Far East; 6.3 percent in other areas of the free world and 4.9 percent in the Communist countries. This results in an over-all growth rate of 5.4 percent for the total world. These figures reflect the energy demands of the emerging nations, as well as other nations such as Japan that are developing rapidly into major industrial powers. The numbers suggest that the U. S. will be facing stiff competition on a global basis for energy supplies in the future.

NPC SUPPLY/DEMAND PROJECTION

In Dec., 1972, the National Petroleum Council published a report entitled "U. S. Energy Outlook." published a report entitled "U. S. Energy Outlook." This report summarizes the work of more than 1,000 industry and government people over a 3-year period. It represents a very thorough analysis of the nation's energy situation. The results of that study will be illustrated in a very abbreviated form.

PROJECTED U. S. ENERGY DEMAND PROJECTED U. S. ENERGY DEMAND The NPC's projections of possible future demand for 1985 were based on a number of factors. As we have just seen, one of these factors is GNP. Others include the cost of energy, population growth, and environmental controls. In projecting energy demand, each major consuming sector was analyzed separately. TABLE 1 ENERGY CONSUMPTIONMILLION BTU'S PER CAPITA PER YEAR

Energy Country Consumption United States 345 Canada 325 Germany 170 U.K. 165 USSR 130 JAPAN 115 MEXICO 35 INDIA 5

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