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

 Combination of extremely high prices and

rolling blackouts

 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 Year of Peak Country Year of Peak
Australia Oil
2004 Libya Oil
1970
Canada 1973 Mexico 2003
China 2005 New Zealand 1997
France 1988 Nigeria 1979
Germany 1966 Norway 2000
India 1997 Russia 1987
Austria 2001 Trinidad 1981
Iran 1974 Venezuela 1970
Indonesia 1993 UK 1990
Japan 1932 USA 1970
Country Oil Peak Year

Iraq 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 generations-
long 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

 Mergers and Stock Buy Backs by the giants

like Exxon Mobile & Chevron

 Oil companies de-marketing the concept of

“peak oil”

 Over estimated reserves-Shell fined $500

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