TEAM MEMBERS

:
•SYED ALI NAQI •SADAF MANSOOR •QURAT-UL-AIN RAUF •ANUM SAFDAR •ANILA MAHUMMED •SYED USMAN WAZIR

“Deal with the reality or the reality will deal with you…”

"Unless we make decisions now our electricity will start to run out within five years."
Professor Ian Fells, World Energy Council

"This is a very, very difficult problem to solve, and we just have never attempted to solve a problem of this magnitude in this world ever before."
Kelvin Beer, Gas Strategist, Deloitte Petroleum Services

"Britain's homes could be without light and heat for long periods by 2020”
A vision of Britain in 2020, Guardian, 1 July 2003

 Energy flows from many sources, exists in a variety of

interchangeable forms, and drives all systems

 Energy is fundamental to the quality of our lives  Energy is a key ingredient in all sectors of modern

economies

 The US economy had the energy bill of 1 trillion in year

2007

 Pakistan had the oil import bill of $3.5 billion in the

first 7 months of 2006. 65% greater than the last year

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.  a situation marked by disruption in oil supplies resulting in increases energy prices that threatens economic and national security

Pre 1890 Industrial revolution-very low energy

needs

Energy Crisis-A Historic Overview

1973 Oil Crisis
 Oil export embargo by Arab states  The price of oil quadrupled by 1974 to nearly US$12 per

barrel

 A National Maximum Speed Limit of 55 mph  Japan shifted its focus from oil intensive industries to

electronics

 Pro Arab approach of Western Europe and Japanese

Governments

 Introduction of medium size hatchbacks-Fiat Ritmo, Ford

Escort MK3, Renault 14, Volkswagen Golf

1979 Oil Crisis
 Occurred in US due to Iranian Revolution  Oil Price increased to $39.5 /barrel from $15.85  Long lines at gas stations-an estimated 150, 000

barrels/day

 Solar panel of White House  Coupons for gasoline rationing  Poor sales of Sedans and RWD vehicles

1990 spike in the prices of the oil-Gulf

War
 Resulted due to the 1st Gulf War  Mild than the previous crisis  OPEC increased the output to tackle crisis  Oil price hit record $42 per barrel

The 2000-2001 California electricity

crisis

 Resulted due to the manipulation by electricity

producers Enron & Reliant energy rolling blackouts

 Combination of extremely high prices and

 Downsizing by the retail companies  State intervened into the deregulated energy

market to save the consumer

Energy Crisis-2004-2007, “The mother of all crisis”

Peak Oil!!

 Peak Oil-the point or timeframe at which the

maximum global petroleum production rate is reached

 Oil production follows a bell curve

 Plentiful oil at the peak of the curve, scarce and

expensive at the down

 Peak- the point of 50% endowment of oil

2005- the year of peak oil

Worldwide Oil Production in 2030 would be

same as in 1980 BUT not the consumption

the issue is not of “running out” but of

“not having enough”
Shortfall in oil supply of 10% is enough to

shatter an oil dependent economy

The coming shocks in oil demand/supply

won’t be short-lived

Peak Oil applies globally but timings differ

Country Australia Canada China France Germany India Austria Iran Indonesia Japan

Year of Peak Oil 2004 1973 2005 1988 1966 1997 2001 1974 1993 1932

Country Libya Mexico New Zealand Nigeria Norway Russia Trinidad Venezuela UK USA

Year of Peak Oil 1970 2003 1997 1979 2000 1987 1981 1970 1990 1970

Country
Iraq

Oil Peak Year
2018

Kuwait

2013

Saudi Arabia

2014

Implications of Energy Crisis & Peak Oil on World

The effect of decrease in production can be

devastating
3% decline in oil production predicted by Dick

Cheney, CEO of Halliburton
Andrew Gould, CEO Schlumberger, predicted

the decline of 8% a year

 1973- the production drop of 5% caused the price

to soar by 400%
 An overall decline of 50% is expected over the

next 9 years
 Above given two points have a message for all of

us….THINK!!!!!!!! Are we heading towards a

“post industrial stone age”…???

"Big deal. If gas prices get high, I’ll just  drive less. Why should I give a damn?“
petrochemicals are key components to

much more than just the gas in your car The construction of a Camry at TOYOTA consumes 20 barrel of oil, an amount twice to its weight Average car consumes during its construction 10% of the energy used during its lifetime

“All forms of modern technologies are not petroleum products”
Modern Medicine, Water Distribution is

powered on oil In US, approximately 10 calories of fossil fuels are required to produce every 1 calorie of food Pesticides are made from Oil Fertilizers are made from ammonia, an fossil extract

All farming implements such as tractors are

constructed and powered using oil Oil storage systems such as refrigerators are made in oil powered plants and run on electricity The production of one pair of regular cotton jeans at LEVI’S takes three quarters of a pound of fertilizers and pesticides “we people gobble oil like two legged SUVs”

Microchips the construction of single 32 megabyte DRAM chip requires 3.5 pounds of fossil fuels “the DAEWOO plant has the capacity of the production of 20 million such chips in a year” The construction of a desktop consumes 10 times oil than its weight

The worldwide banking system stands on the

availability of cheap oil “its not physics but reality that money equals energy” Real usable wealth represents usable energy Real costs represents the energy cost of doing something Real value represents energy cost of building something

“The scene is set for the Second Great Depression”

“the world's wealth may soon evaporate as we enter a technological and economic "Dark Age.“
London Times, October 2005

“The Government has admitted that companies across Britain might be forced to close this winter because of fuel shortages. “
The Daily Telegraph, April 2007

“the consequences would be unimaginable. Permanent fuel shortages would tip the world into a generationslong economic depression. Millions would lose their jobs as industry implodes. Farm tractors would be idled for lack of fuel, triggering massive famines. Energy wars would flare. And carless suburbanites would trudge to their nearest big box stores, not to buy Chinese made clothing transported cheaply across the globe, but to scavenge glass and copper wire from abandoned buildings”

"The price of houses will collapse. Stock markets will crash. Within a short period, human wealth -- little more than a pile of paper at the best of times, even with the confidence about the future high among traders -- will shrivel." Jonathon Gatehouse, Oxford Geologist

Impact of Energy Crisis on Pakistan

“A Pakistan with serious energy shortages will

not be a pleasant Pakistan”-Robert M Hathaway,
director of the Asia Program at the Woodrow Wilson International Centre for Scholars in Washington.

Governmental figures:
 By 2015 energy demand in Pakistan will be

nearly 22 percent greater than projected supply  By 2030, this energy shortfall will be 64 percent.

Today, oil and natural gas supply nearly 80

percent of Pakistan’s energy needs.
Pakistan currently produces less than 20

percent of the oil it consumes. This fosters a dependency on imported oil that places considerable strain on the country’s finances.
Gas needs not nearly as critical, Pakistan’s

projected natural gas needs are expected almost to double (from 2004 levels) by 2010.

Hydropower and coal are under-utilized Coal energy mix from 7 to 18 percent by 2018

— a course that may make sense from an energy standpoint, but which carries troubling environmental implications.
Provincial rivalries and widespread public

opposition have significantly slowed the government’s plans to build dams capable of generating electricity.

Nuclear power at this point accounts for

barely one percent of Pakistan’s energy consumption.
Pakistan’s renewable energy potential —

hydro, wind, and solar — is substantial, although presently this potential remains largely untapped.

Future Strategies-Is there any solution?

“I don’t think there is one. The solution is to pray. Under the best of circumstances, if all prayers are answered there will be no crisis for maybe two years. After that it’s a certainty.”
President Bush Energy Advisor, Mathew Simmons

Disaster Management Strategies  US Govt. Building camps for “emergency influx of immigrants“  “Police-state style legislation”  "war games on the grandest scale" by Pentagon to simulate how billions of people will react to food and fuel shortages
UK Register, June 2007

Oil Sector
 No refinery built after 1976  Oil giants are not investing much in their

business as there is going to be less and less oil to refine like Exxon Mobile & Chevron “peak oil” million

 Mergers and Stock Buy Backs by the giants

 Oil companies de-marketing the concept of

 Over estimated reserves-Shell fined $500

Fuel efficient Automobile Industry Fuel efficient vehicles-Toyota Prius, Hybrid SUVs by Ford, Hybrid Trucks by GE Government subsidies to the producers of Hybrid Vehicles Penalties on vehicles with low mileagesubsidies on vehicles with better mileages Encourage the public transportation “STOP LEASING!!!!”

 Alternative Fuels  Redouble the commitment to energy

efficiency

“Come On-Don’t be FUELISH”
 DuPont saved $ 2 billion in energy cost by

energy efficiency

 DOW Chemical800 million BTUs per day

Selling the stocks , bonds and mutual funds

before the stock crash
Buy physical precious metals gold and silver

and take delivery in your home or to a privately owned security lock box
Buy energy futures to hedge against the price

hikes

2. Convert to organic agriculture and grow 3. 4. 5. 6. 7.

as much of our food locally as possible Relocalize daily living, work and commerce Vastly expand public transportation Convert to non-polluting, renewable energy sources Seek to stabilize and then gradually reduce world population growth rate Vastly increase the efficiency of industry