Energy Supply and Demand – some optimistic signs!

Visitors to our website will know that while we look at energy consumption on a household by household basis, we are also interested in macro trends. For years we heard about the pending scarcity of oil and natural gas. While the world continues to become industrialized, does this only accelerate our anticipated scarcity? On the contrary, recent evidence shows not only increased supply, but (somewhat surprisingly) decreased demand.

Only in the last decade have we  started hearing of “America’s energy self-sufficiency”. I must confess that based on what I knew then, I dismissed this as political grandstanding. Yet a few short months ago, I had the pleasure of attending a Greater KW Chamber of Commerce discussion on energy by Jim Prentice (an ex Energy Minister for Canada) who laid out the facts. It is now generally accepted that the US will achieve energy independence by as soon as 2035, and a net exporter of oil 5 years before that!

Canadians will be very familiar with the promise of tar sands, despite their environmental challenges. The good news is that markets seem to be holding around $100 – which is the upper end of the range where heavy oil becomes cost effective. As such, Canadian independence appears even more achievable.

The most encouraging piece of evidence can be found in our consumption practices. In a recent blog in the Economist we find that while per capita GDP in the US rose 2.5% annually between 1986 and 2011, energy consumption decreased by .17%. For all of the skeptics that scoff at such a small decrease, I ask “how many households were running PVR’s, PC’s, 50” TV’s, etc in ‘86?” Yes, all of these additions, and a net reduction of .17%! So despite our voracious appetite for convenience (and by association energy) we are consuming less. This is likely because the manufacturers are developing increasingly efficient products.

In case you think that the US might be an island unto itself, think again. Like most energy efficiency measures, the US is a significant laggard to Europe. In fact, the article explains, that energy consumption peaked in Great Britain around 40 years ago, and in Germany almost 35 years ago. Intuitively, one needs to look no further than the differences in the fleets of the two populations…. the compact diesels of Europe vs the popularity of the truck in the US.

While this is not a call for increased (and unbridled) consumption, it does give us some positive signs for the future! Energy supply is increasing and (local) demand is falling!

If you have any questions, concerns or require additional information please feel free to comment below or contact us at any of the sources provided., 519.579.5330, Twitter @HoggMechanical, Facebook Hogg Mechanical

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