How is the Energy sector fueling the global economy? |
|
|
10 Nov 2010 |
|
|
The world is waiting to see how innovations in new energy, combined with the factors of today’s energy market, will affect where our energy comes from, and how much it will cost. Given our global dependency on oil, we must examine the state of the world’s energy producers, as well as the consumption patterns of the top energy consumers. The Middle East moves from oil-centric |
|||
|
Click to enlarge |
Currently, the Middle East leads the world in oil production, followed by Russia, but these nations are facing their own economic challenges, and will need to make some hard choices as the world looks to cleaner and more efficient sources of energy.
For many oil-producing states, oil is their main export. Middle Eastern economies are hugely dependent on oil production, and their growth is largely determined by fluctuations in oil prices. However, GDP per capita growth in the region lags behind other emerging countries, and their economies will need to diversify outside of the energy sector in order to generate enough economic growth to sustain the countries’ projected population increase. We are already seeing success in new industries that are offshoots of the energy sector, such as petrochemicals and aluminum, but the Middle East is also home to large and growing global financial centers and airlines.
|
Click to enlarge |
In Russia, oil, oil products, and natural gas make up nearly two-thirds of all exports. As a result, the sharp decline of global oil prices in the second half of 2008 meant that the Russian economy was especially hard hit by the recession. Indeed, Russia's economy shrunk by 7.9% in 2009. With growing political pressure around the world to conserve energy and lower carbon emissions, the Russian government is putting policies in place to encourage energy innovation and infrastructure investment.
China and the U.S. consumption patterns
At the other end of the spectrum are the world’s top oil consumers: the United States and China. U.S. consumption of oil fell during the recent global economic downturn, but China’s consumption continued to expand along with their economy. The major source of energy for China’s industrial powerhouse is actually coal; however, clean coal technology is still largely unproven and prohibitively expensive. Given the dubious honor of being the world’s biggest polluter, China is under increasing pressure to find more energy efficient means to power their rapidly growing economy. Still, it may be the developed world that has to step up to the plate first.
