Falling Energy Per Capita Is the World's Biggest Problem

Energy Consumption Trends: A Historical Perspective

A comprehensive analysis of global energy consumption between 1820 and 2020 revealed a critical link between energy availability and economic stability. Periods marked by sluggish energy growth invariably coincided with widespread conflicts, economic depressions, and societal collapses. This correlation underscores the fundamental role of energy in sustaining economic activity, as every sector hinges on an adequate and appropriate energy supply.

Extending this analysis to include data up to 2024, examining five-year intervals, paints a concerning picture. Recent trends suggest that overall energy consumption growth is insufficient to avert significant global challenges. Drilling down further, shortages in crucial resources, notably diesel and jet fuel, along with critical minerals essential for electricity generation and distribution, are particularly alarming.

The Scramble for Scarce Resources

The data intimates that the global economy is beginning to grapple with the constraints of limited energy resources. Emerging energy-related scarcities are causing nations to compete aggressively, reminiscent of a game of musical chairs with insufficient seating. This competition manifests in various forms, including military expansion, export restrictions on vital minerals, the imposition of tariffs, and even acts of aggression against other nations. Such actions, while potentially perplexing to ordinary citizens, are indicative of the pressures arising from resource constraints.

Historically, periods of robust energy growth have correlated with periods of economic prosperity. The early 20th century, specifically the period from 1901 to 1910, witnessed significant advancements in electrification and agricultural mechanization, driving substantial economic expansion. Conversely, the peaking of coal production in the United Kingdom before 1913 and in Germany before World War II led to resource scarcity and heightened geopolitical tensions.

Disparities in Energy Access and Implications

Post-World War II, the global economy experienced rapid energy growth throughout the 1950s, 1960s, and 1970s. A subsequent peak in the 2001-2010 period coincided with China's accession to the World Trade Organization (WTO) in late 2001, triggering a wave of industrial relocation from high-wage countries to China. This shift was driven by lower labor costs and access to inexpensive coal, which reduced energy expenses. Furthermore, relocating manufacturing and mining operations to China enabled high-wage countries to reduce their CO2 emissions, aligning with the 1997 Kyoto Protocol.

The recent five-year periods from 2015 to 2024 reveal a concerning trend: the economy is facing increasing pressure due to inadequate energy resources. Specifically, the declining availability of diesel and jet fuel relative to population growth is particularly worrisome, given their crucial role in international transportation and food production. The shortfall in these fuels could lead to a contraction in global trade and exacerbate food security concerns. While renewable energy sources like wind and solar are gaining traction, they cannot currently replace diesel and jet fuel in these critical sectors.

Moreover, a significant disparity exists in electricity consumption between Advanced Economies and Other Economies. While electricity production in Advanced Economies has stagnated since 2007, Other Economies have experienced continuous growth, particularly after China's WTO entry. This divergence, coupled with the fact that population growth is concentrated in Other Economies, has resulted in declining per-capita electricity supplies in Advanced Economies, partly due to efficiency improvements and offshoring.

The reliance on specialized minerals for high-tech electrical goods and electricity transmission further exacerbates the challenges faced by Advanced Economies, as they are heavily dependent on imports for these critical minerals. This dependence underscores the vulnerability of these economies to supply chain disruptions and geopolitical tensions.