If one were to glance at today’s headlines, it’s hard not to notice that there appears to be some perfect storm brewing in the global energy industry. While many countries are currently experiencing an energy crisis, one can’t help but wonder if it will spread globally and if and how that might impact the entire world’s economy.

#1. The Growing Energy Demand

According to BP’s recent Statistical Review of World Energy 2014, world energy consumption has been growing at an average annual rate of 1.4 percent per year for over three decades. This trend is projected to continue over the coming years, driven by rapidly rising demand in emerging economies like China and India, coupled with slower but still robust growth in more mature markets.

#2. Unstable Markets

In today’s globalized world, there is no place for energy markets to be unstable. If anything, businesses should come together and begin making plans now for when problems arise. These plans can include increased investment into renewable resources like wind or solar, as well as exploring better ways of conserving energy already being used on a small scale around certain parts of the world.

#3. Political Instability

While Saudi Arabia may seem like an impenetrable force, we can’t forget that OPEC is a political organization. Suppose enough countries band together for a similar change and start thinking about renewable energy as a long-term solution rather than immediate profit. In that case, it will only be a matter of time before Saudi loses its monopoly. Sure, it might take years, but it’s worth keeping an eye on developing relations between OPEC countries.

#4. Lack of Access to Basic Needs

More than 2 billion people around the world lack access to clean drinking water. In addition, there are 940 million people who do not have electricity. This causes more deforestation as people use wood for fuel. Without proper sanitation, the disease is rampant, and many people die from diseases like cholera that are easily preventable through proper sanitation (e.g., toilets).

#5. Infrastructure Deficiencies

Along with exponential population growth, African countries are experiencing a severe energy deficit, which is particularly evident in power capacity. Sub-Saharan Africa is presently ranked third among all regions as far as per capita consumption of energy (65.6 kg of oil equivalent per person) — with South Asia and Latin America being first and second, respectively — while it only ranks 27th when it comes to electricity consumption.

#6. Inefficient Use of Resources

In many African countries, 60% of urban populations and 80% of rural households live without electricity. As a result, kerosene lamps are often used to light homes, schools, and businesses. However, these kerosene lamps produce a large amount of air pollution that can lead to lung cancer. They are also dangerous because they require smoke-free zones due to their fire hazard risk. In addition, they pose a threat as they emit carbon monoxide, which is toxic when inhaled.


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