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Introduction

Introduction

Terese is a 20-year-old mother living in a small village in Senegal. She spends most of her day laboring over simple everyday tasks that a woman living in a developed country with reliable access to energy could perform in minutes. In order to cook meals, Terese must grind her homegrown grains using traditional tools like a mortar and pestle. Even though the village has a grain-grinding machine, it requires several liters of expensive gasoline in order to function-resources Terese does not have and cannot afford. Cooking this meal into an edible form over a simple fire can take up to two hours, not counting the time it takes to gather the wood. In addition, she must spend several hours a day walking to and from a well to gather water because the village lacks the electricity to run a modern water pump.

Most people take energy for granted, never realizing how much they use-and waste-to accomplish even the most basic activities in their daily routine. Yet, energy is a scarce and valuable commodity, one that will play an increasingly important role in the lives of all global citizens in the coming years. One day, the forces of globalization may bring a supply of energy and thus greater opportunity to Terese’s village. But globalization is also complicating the global energy landscape in ways that we are only beginning to understand. 1

Energy usage has been such a basic element of human advancement for so long that it is perhaps not surprising it has acquired mounting significance in the era of globalization. It pervades every aspect of life: enabling the simplest everyday tasks, shaping the environment around us, underpinning economic growth, and increasingly affecting the geopolitical calculations of all governments. In addition, the estimated $26 trillion dollars to be invested in the energy sector between 2007 and 20302 suggests the energy industry is the ” biggest business in the world; there just isn’t any other industry that begins to compare “3

First and foremost, energy in all its forms, perhaps more than any other commodity, has fueled the continuing integration of the nations of the world and their economies. Higher energy consumption has both influenced and been influenced by the forces of globalization, raising the stakes involved in the formation of national energy policies and the proper operation of global energy markets. Strong global economic growth and the need to ship more goods and services around the world have raised demand for energy in many sectors.

If current energy agreements and policies are acted upon, it will have a marked effect on energy demand. The Energy Information Administration (EIA) projects that between 2008 and 2035 world energy consumption will increase 36 percent, about 1.2 percent per year.  Ninety-three percent of that increase is predicted to occur within non-OECD countries like China and India.4

The economic turmoil of 2008-2009 created widespread uncertainty in the energy sector. Governments are still strapped with heavy debt and fear a double dip recession. However, there has been some success in inserting new energy policies into international agreements and reforms. At the 2009 G20 Summit in Pittsburgh, an agreement was made addressing fossil fuel subsidies (totaled $312 billion in 2009). The global economy’s recovery will play a large role in determining energy prospects in the coming years.5

Recent spikes in demand, due to increased transportation and trade, when matched with the declining level of supply in the short term, have created a shock that the average consumer feels deeply because high energy prices mean the cost of living rises and energy costs assume a growing share of household spending. The economic recession has hurt consumers more by augmenting the effects of the energy shock.

While the exact size of future global energy demand is in constant flux, all trends suggest that consumption of energy will grow at least as steadily as global population. Thus energy issues will only become more prominent in the global dialogue as emerging economies such as China and India continue to modernize and industrialize, and as developed countries place an ever greater premium on securing energy assets and achieving energy independence.

This issue brief will provide an overview to the field of energy, surveying several of the most important types of energy and the issues specific to each type. It will also explore the relevance of energy considerations to three central aspects of globalization: the environment, development, and geopolitics. The brief includes both description and analysis, providing both real-world examples and broader background concepts that contextualize them. Most importantly, the issue brief will address the critical questions and controversies at the heart of the ongoing debate about the role of energy in a globalized world.


 

1 ”A Day in the Life of Terese,”Global Energy Network Institute, 

2 “World Energy Outlook 2010.”

3 “Slumbering Giants Awake”

4 Energy Information Administration “Highlights.”

5 World Energy Outlook 2010.”