Global energy consumption has doubled in the past thirty years and is expected to increase by another 60% by 2030. According to the International Energy Agency (IEA) and the Organization for Economic Co-operation and Development (OECD), consumption rose from 5.5 billion toe (tons of oil equivalent) in 1971, to 10.3 billion toe in 2002. By 2030, global energy demand is expected to reach 16.3 billion toe, 1.6 times that of 2002.

Figure 1: Global Primary Energy Consumption, 1971-2030
Source: Energy White Paper 2005 (Japan) ^[1]

Despite the steady rise in both energy supply and consumption, over 1.6 billion people, 35.8% of the population in the developing world, still live without electricity^[2]. Predictions of energy demand in 2050 vary, but some scientists expect that providing an acceptable quality of life to the majority of the world will require three times the energy consumed in 20003^[3], illustrating the close link between eradication of global poverty and growing energy demand.

On a per-source basis, oil provided 36% of the total energy consumed as of 2002. Coal accounted for 23%, natural gas 21%, nuclear 7%, and hydro, biomass and other renewables combined provided 13% of the energy consumed globally. Renewable energy sources excluding hydro and traditional biomass -mostly solar and wind power- remained at only 0.5% of primary global energy consumption.

Although Japan's energy efficiency is high, total energy demand since 1960 has been growing at almost the same rate as the GDP.

Figure 2: Japan’s Energy Demand
Source: Energy White Pages 2004 (Japan) ^[4]

Figure 3: Multi-Country Comparison of GDP and Primary Energy Consumption
Source: Energy White Pages 2004 (Japan) ^[4]

Note' Energy consumption (toe)/real GDP (both actual 2001 archived results) have been adjusted to 1 unit of Japan energy consumption. Source: Institute of Energy Economics Japan "Energy Economic Statistical Summary"

A major concern regarding Japan's energy consumption is its reliance on imported energy to meet 96% of its demand (including nuclear energy as an imported source of energy)^[5]. This makes Japan more dependent on foreign energy than almost any other country in the world.

About 80% of global energy consumption is reliant on non-renewable fossil fuels such as oil, natural gas, and coal. Given this situation and a rapidly increasing demand, the latter half of the 20th century has been characterized by an intense debate concerning our primary dependence on oil and the possibility that reserves may soon dry up, raising questions about energy supply prospects in the first half of the 21st century.

According to the IEA, global oil consumption has grown more than 26% since the 1990s, increasing from 66 million barrels to around 84 million barrels per day (1 barrel = 159 liters) in 2005. The largest consumer is the United States, where about 5% of the world's population accounts for more than 20% (20 million barrels per day) of the world's oil consumption. Japan, with 2% of the world's population, consumes 5 million barrels per day, or roughly 6% of total global consumption.

The demand for oil is expected to rise further over the next fifteen years. The IEA and EIA (US Energy Information Administration) predict that by the year 2020, world oil consumption will be about 115 million to 117 million barrels of oil per day, taking into account the increasing demand from China and other emerging nations. This is almost a 40% increase over consumption rates in 2005.

Given such rapid increases in demand, is it possible to have a stable supply? With a tight supply to demand in 2004 and 2005, oil prices rose sharply in the global market. Although this price increase is not a direct result of oil depletion, it did reveal the severity of supply side challenges that have arisen along with increased global consumption.

“Peak Oil Theory” regarding future oil reserves of the world's oil-producing countries, maintains that after reaching mid-point depletion of available oil resources, production will soon peak followed by a long decline. Even if oil reserves will not be exhausted immediately, there is a strong risk that after peak oil the market will fall into chaos as supply becomes unable to keep up with demand. One of the main justifications for this theory is that the discovery of new oil fields peaked in the 1960s^[6], and has since been constantly declining. While there is a chance that new oil fields will be discovered, it is unlikely that “giant fields,” such as Saudi Arabia’s Ghawar, will ever be found again.

Figure 4: ASPO Peak Oil Projections
Source: ASPO, 2004 ^[7]

Colin Campbell, geologist and founder of the Association for the Study of Peak Oil (ASPO), says that oil reserves outside of the OPEC nations have already peaked, and that oil supply will have peaked globally by 2010^[7] (Figure 4). There are also those who, while not disputing the concept of peak oil, maintain that it will not happen for several more decades.

Figure 5: EIA Peak Oil Projections
Source'EIA ^[8]

Estimating the total historic amount of extractable oil to lie between 2.2-3.9 trillion barrels, based on United States Geological Survey (USGS) evaluations and, taking EIA's predicted 2% per year increase in global demand (Figure 3), EIA predicts that “peak oil” will occur sometime between 2026 and 2047. Even in this somewhat conservative projection we see that after the peak, which will happen in the first half of the 21^st century, oil supply will decrease rapidly.

The major criticism of peak oil theorists maintains that their way of looking at oil reserves is flawed, and that with future technological advances in the field of oil extraction it will be possible to produce as much as 3 - 5 trillion barrels^[9]. These criticisms are accompanied by some recent optimistic views regarding oil and natural gas reserves. According to an IEA report, “Resources to Reserves, Oil and Gas Technologies for the Energy Markets of the Future” (released in September 2005), oil and natural gas will make up over half of the energy supply over the coming decades. As of today, 1.5 trillion barrels of oil and natural gas have been consumed and, according to the report, we can expect the same amount to be consumed over the next twenty-five years. As there are at least 5-10 trillion barrels that could technically be extracted, including non-conventional oil sources (see below), there is no fundamental problem with supply. However, meeting the rapidly growing demand with a stable supply will require large investments and technological advances. The report concludes that oil, natural gas, and other hydrocarbon resources are plentiful, and that most of these can be turned into proven reserves in the future at oil prices significantly below current levels^[10].

Clearly, scientists have differing views regarding peak oil. However, with global demand for oil expected to grow approximately 40% over the next fifteen years, there is widespread recognition that the supply potential of conventional oil resources may face major challenges.

Many consider non-conventional oil to be the key to avoiding future gaps between energy supply and demand. Non-conventional oil is oil extracted using techniques other than the traditional oil well method, and is made mostly from tar sands, oil shale, bitumen, biofuels, thermal depolymerization (TDP) of organic matter, and the conversion of coal or natural gas to liquid hydrocarbons. Scientists disagree about how much of these non-conventional reserves can be extracted, but the IEA and World Energy Council (WEC) point out that the amount of existing non-conventional oil reserves rivals, and possibly surpasses, that of conventional oil reserves.

The “World Energy Assessment”^[9] has identified three issues for consideration regarding the extraction of non-conventional oil -economic costs, energy input, and ecological impacts. For example, producing one barrel of oil from the Athabasca Tar Sands in Canada will require the removal and processing of about five tons of tar. This in turn requires large amounts of hot water and other energy inputs, something that geologists and environmental scientists remain skeptical about. Economists, on the other hand, point out that if the price of conventional oil remains high, non-conventional oil development and usage will become widespread.

Many people believe that the fossil fuels that provide 80% of our current energy can continue providing energy security for as many as fifty years. This is based on the fact that, if current consumption rates continue, we have forty years worth of proven oil reserves, two hundred years worth of coal, and about sixty years worth of natural gas. However, market economics and supply side deficiencies raise the possibility of temporary instability, making it increasingly important to consider both economic and environmental issues.

The “World Energy Assessment” (2000) draws the following conclusion.

"The ultimate resource base of unconventional oil is irrelevant to the 21st century's energy supply. Occurrences of such oil that are already known and under exploitation can provide the global supply likely to be required in the 21st century. On the other hand, economic or environmental considerations-or both-could convert unconventional resources back to neutral material, as has occurred in recent decades with previously designated coal resources."9

We must always keep in mind the impacts of our energy consumption on the environment, society, and future generations, realizing that it is our responsibility to share the earth's scarce resources and ensure an adequate supply for use in the 22nd century and beyond by reducing our current consumption and developing new sources of energy.

A desire to diversify energy supply in the second half of the 20th century has lead to increased efforts to find an alternative to oil. But what would such diversification look like?

Many people have had great expectations for nuclear energy as the new major primary energy source, and Japan has placed particular emphasis on developing it. By the year 2000, there were about four hundred nuclear power plants in operation around the world. Of these, about one hundred were in the United States, and about fifty were operating in Japan. According to the IEA, by the year 2002 some 7% of primary energy production was from nuclear power, but this figure is not expected to change much by 2030.

Fast-breeder reactors, capable of using all of the uranium and reusing nuclear waste material, have been in development in Japan for several decades. Yet, in April of 2005 the Japan Nuclear Power Committee stated, in regards to the feasibility of such new nuclear power sources, that based on economics and other conditions, such reactors would not come into the commercial use before 2050. The possibility of a dramatic increase in nuclear power efficiency in the near future remains low, and the uranium efficiency will continue to be an issue.^[10]

Wind, solar, biomass, and various other renewable energy sources, have been the object of much research and development and promising new technological possibilities are being explored. Yet, according to the IEA, the actual percentage of total energy produced by renewables has only grown from 4.6% in 1970, to 5.5% in 2000. Despite anticipated growth in all major renewable energy sources over the next few decades, the IEA's official prediction is that, as with nuclear power, renewable energy will not capture a larger share of primary energy supplies.

Long-term perspectives regarding alternative energy research can be seen in the research into nuclear fusion and the development of ITER (International Thermonuclear Experimental Reactor) in France, as well as in the exploratory research into the potential development of Solar Power Stations (SPS). Few specialists anticipate, however, that these will supply a substantial portion of energy for the 21st century.

Our great dependency on fossil fuels and the difficulty in making the transition to new key sources of energy supply are clear. When we talk of the sustainable use of energy, both the quality and quantity of energy consumed are of critical importance.

In terms of quantity, a common theme emerging from the interviews we conducted for this study was the importance of more progressive energy conservation, and the need for increased effort to develop a solid long-term energy conservation vision and strategy encompassing in particular automobiles, homes, and industrial facilities. Without much more radical energy conservation measures, it is hard to see how the energy supply-demand gap can be bridged as the world moves toward some 9 billion people in 2050 who all want a decent life. It is important not only to focus on the energy conservation performance of individual products, but also to adopt a broader societal vision on energy conservation.

The main concerns regarding quality of energy are related to CO2 emissions and their contribution to climate change. Achieving sustainability will inevitably require a safe form of energy with low CO2 emissions. At the same time it is also imperative to identify the most efficient energy alternatives and develop the necessary infrastructures in developing countries in order to meet growing demand.

Issues surrounding short-term security and instability of the current fossil fuel supply are also driving the shift to sustainable energy systems. Yet, neither nuclear nor renewable energy is rising to take the place of fossil fuels and, as previously noted, the IEA and other predictions do not anticipate large changes in the composition of major energy sources before 2025-2030.

Given these realities, achieving social and economic development goals such as a healthy, functioning global economy, the abolition of poverty, peace, and a comfortable standard of living for all, will require great innovations in energy systems and technologies and a strong sense of urgency from decision-makers and business leaders.

1. Japan Agency for Natural Resources and Energy. Energy White Paper 2005 (Tokyo, 2005)
2. International Energy Agency (IEA). World Energy Outlook 2002 (WEO 2002)
3. Kerr, R. A. and Service, R. F. "What Can Replace Cheap Oil - and When?", Science Vol. 309, (July, 2005)
4. Japan Agency for Natural Resources and Energy. Energy White Pages 2004 (Tokyo, 2004)
5. Japan Agency for Natural Resources and Energy. http://www.enecho.meti.go.jp/faq/world/q03.htm (accessed November, 2005)
6. Yoshinori Isii, "Chikyuu no 'Piku oiru' ni kan suru seimei" [The Earth's Declaration on "Peak oil"] 22 March 2003, http://www007.upp.so-net.ne.jp/tikyuu/myenvironmentalism/philosophy/do_you_know.html#7e5 (accessed November, 2005)
7. Cambell, C. J. Oil and Gas Liquids 2004 Scenario. Uppsala Hydrocarbon Depletion Study Group. (ASPO, 2004)
8. Energy Information Administration, H. Wood, J.H., Long,G.R. and Morehouse, D.F. Long-Term World Oil Supply Scenarios: The Future Is Neither as Bleak or Rosy as Some Assert (EIA: 2004)
9. United Nations Development Program,World Energy Assessment (WEC/UNDP/UNEP : 2000)
10. International Energy Agency, Resources to Reserves - Oil and Gas Technologies for the Energy Markets of the Future (IEA: 2005)