The most important source of our modern civilization is energy. Energy is in everything. It comes in different forms — heat (thermal), light (radiant), mechanical, electrical, chemical, and nuclear energy. The use of energy has been a key in the development of human society by helping it to control and adapt to the environment. Managing the use of energy is inevitable in any functional society. In the industrialized world, the development of energy resources has become essential for agriculture, transportation, waste collection, information technology, communications that have become prerequisites of a developed society. The increasing use of energy since the Industrial Revolution has also brought with it a number of serious problems, some of which, such as global warming, present potentially grave risks to the world.

In society and in the context of humanities, the word energy is used as a synonym of energy resources, and most often refers to substances like fuels, petroleum products and electricity in general. These are sources of usable energy, in that they can be easily transformed into other kinds of energy sources that can serve a particularly useful purpose. All forms of energy are stored in different ways, in the energy sources that we use every day. These sources are divided into two groups — renewable (an energy source that can be replenished in a short period of time) and nonrenewable (an energy source that we are using up and cannot recreate in a short period of time). Renewable and nonrenewable energy sources can be used to produce secondary energy sources including electricity and hydrogen.

Renewable energy sources include solar energy, which comes from the sun and can be turned into electricity and heat. Wind, geothermal energy from inside the earth, biomass from plants, and hydropower and ocean energy from water are also renewable energy sources. However, we get most of our energy from nonrenewable energy sources, which include fossil fuels — oil, natural gas, and coal. They’re called fossil fuels because they were formed over millions and millions of years by the action of heat from the Earth’s core and pressure from rock and soil on the remains (or “fossils”) of dead plants and animals. Another nonrenewable energy source is the element uranium, whose atoms we split (through a process called nuclear fission) to create heat and ultimately electricity.

We use all these energy sources to generate the electricity we need for our homes, businesses, schools, and factories. Electricity “energizes” our computers, lights, refrigerators, washing machines, and air conditioners, to name only a few uses. Oil is one of the most important of all these energy sources. Oil that we use these days comes from a material called Crude oil. Crude oil is a smelly, yellow-to-black liquid and is usually found in underground areas called reservoirs. Scientists and engineers explore a chosen area by studying rock samples from the earth. The amount of crude oil produced has been getting smaller each year. However, the use of products made from crude oil has been growing, making it necessary to bring more oil from other countries.

As the supply of this crude oil is decreasing with the increasing demand we call it an Energy crisis. More precisely an energy crisis is any great bottleneck (or price rise) in the supply of energy resources to an economy. It usually refers to the shortage of oil and additionally to electricity or other natural resources. An energy crisis may be referred to as an oil crisis, petroleum crisis, energy shortage, electricity shortage or electricity crisis. As we live in the age of oil, but it is drawing to a close. The worlds’ most widely-respected geologists, physicists, bankers, and investors in the world are absolutely terrified by a phenomenon known as global “Peak Oil.”

Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. The concept is based on the observed production rates of individual oil wells and the combined production rate of a field of related oil wells. The aggregate production rate from an oil field over time appears to grow exponentially until the rate peaks and then declines, sometimes rapidly, until the field is depleted. It has been shown to be applicable to the sum of a nation’s domestic production rate and is similarly applied to the global rate of petroleum production. It is important to note that peak oil is not about running out of oil, but the peaking and subsequent decline of the production rate of oil.

If 2005 was the year of global Peak Oil, worldwide oil production in the year 2030 will be the same as it was in 1980. However, the world’s population in 2030 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil-dependent economies will crumble, and resource wars will explode.

The issue is not one of “running out” so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. an oil based economy such as ours doesn’t need to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as 10 to 15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty. The effects of even a small drop in production can be devastating. For instance, during the 1970s oil shocks, shortfalls in production as small as 5% caused the price of oil to nearly quadruple. The same thing happened in California a few years ago with natural gas: a production drop of less than 5% caused prices to skyrocket by 400%. Fortunately, those price shocks were only temporary.

The coming oil shocks won’t be so short lived. They represent the onset of a new, permanent condition. Once the decline gets under way, production will drop (conservatively) by 3% per year, every year. War, terrorism, extreme weather and other “above ground” geopolitical factors will likely push the effective decline rate past 10% per year, thus cutting the total supply by 50% in 7 years. This estimate comes from numerous sources, many of which believe global oil production will peak and go into terminal decline within the next five years if it hasn’t already. Many industry insiders think the decline rate will far higher. Andrew Gould, CEO of the giant oil services firm Schlumberger, for instance, recently stated that “An accurate average decline rate of 8% is not an unreasonable assumption.”

Some industry analysts are anticipating decline rates as high as 13% per year. Source A 13% yearly decline rate would cause global production to drop by 75% in less than 11 years. If a 5% drop in production caused prices to triple in the 1970s, what do you think a 50% or 75% drop is going to do? Estimates coming out of the oil industry indicate that this drop in production has already begun. The consequences of this are almost unimaginable.

People tend to think of “alternatives to oil” as somehow independent from oil. In reality, the alternatives to oil are more accurately described as “derivatives of oil.” It takes massive amounts of oil and other scarce resources to locate and mine the raw materials (silver, copper, platinum, uranium, etc.) necessary to build solar panels, windmills, and nuclear power plants. It takes more oil to construct these alternatives and even more oil to distribute them, maintain them, and adapt current infrastructure to run on them.

If oil production remains constant, there is enough to last 42 years. That figure is 61 years for natural gas and 133 years for coal. Oil and gas wells produce less as they become depleted which is just one reason production will not stay constant. Everyone realizes oil and gas will become scarce and expensive within the lifetimes of living humans. Inevitably, there will be a transition to sustainable energy sources. The transition may be willy-nilly or planned–the choice is ours. Because of our numbers and our technology, we humans greatly influence the ecology of Earth. Yet Earth does not come with an operating manual and we need to look to science to create one. The new era of limited and expensive energy will be very difficult for everyone on Earth but it will be even more difficult if it is not anticipated. It is of utmost importance that the public and especially policymakers understand the global energy crisis and the underlying science.