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| The dismal science|
An energy crisis occurs whenever ready supplies of some fuel or other energy commodity drops below the current demand in a given location.
Energy crises can occur for many reasons, which vary in how easy they are to solve.
Intentional supply limitation
Cartels might reduce production, delivery, or refining capacity in order to enjoy a higher price. The classic example of this was the formation of OPEC (Organization of Petroleum Exporting Countries) in the early 1970's, which precipitated the so-called "oil shocks" of 1972 and 1974. The nations of OPEC agreed to limit output of crude oil in order to sustain the prices they were receiving. They controlled enough of the world's supply to raise the price quite effectively, resulting in panics over availability, and the classic "gas lines" in the United States as drivers attempted to top up their tanks every time they needed a few gallons.
Some also theorize that certain actions by major oil companies in recent years (2006-2007) have been taken to limit refining capacity, having largely the same effect on the consumer.
Actual availability of exploitable resources can decline. In reality, this is not like taking the last cookie from the jar, but removing most of what current prices can support from known stocks. As prices increase, less accessible resources become economically viable to extract. One example of this is many oil wells in the U.S., which have been "emptied" of easy-to-pump oil, but still contain "dregs" that would be more expensive to get at. (See also: hydraulic fracturing)
Demand can outstrip increases in production. Situations where economies are growing rapidly can lead to a shortage of deliverable energy supplies. In general, the subsequent increase in price spurs producers to increase capacity to mediate the crisis. Ideally, producers are able to project future growth well enough to prevent disastrous consequences. China's current economic growth rates are having this effect on the world's energy markets.
Nature is unpredictable, and many geological or meteorological events can act to prevent extraction, refining, and distribution of energy. Examples include:
- Hurricanes shutting down Gulf of Mexico oil platforms and shore-based refinieries, as happened with Hurricane Katrina.
- Similar weather issues in the North Sea.
- Earthquake damage to production fields, pipelines, etc.
- General storm issues making ocean transport of fuel stocks difficult.
- Ice and wind storms can bring down high-tension electric lines, preventing delivery to large numbers of consumers, as it did in eastern Canada a few years ago.
Many of the world's raw energy stocks (notably oil) are located in areas with tenuous governments. Disruptions in the politics of these countries can reduce or even temporarily stop the exploitation of their natural resources. This is one area where the reduction in supply and increase in price does not yield a ready way to solve the problem by investment of the increased profits, unless one considers making more guns and bombs to occupy and secure these places an "investment in energy supply." The Iraq War was a good example of this.
Speculative market bubbles
Some argue that most so-called energy crises are really speculative market bubbles in energy markets; an example is the run-up in oil prices in 2005-2008, and subsequent crash in late 2008 following a crash in the real estate bubble and followed by a crash in the stock market.
Viewed in this way, the most recent crisis wasn't driven by peak oil itself, but by market psychology caused by irrational fears over peak oil.