Energy & Utilities

Industry Overview

If the "peak oil" proponents are correct, today's energy and utilities industries are soon going to die a not-very-distinguished death. Peak oil theorists claim that the amount of oil that we can extract from the Earth has already reached, or is soon to reach, its peak—and that, within decades after that peak, the world's oil supply will in effect run out.

The coming scarcity of fuel, plus the mounting demand for energy (from both the First World, which needs energy to run its increasingly complex technologies, and the Third World, which is using more energy as it modernizes) mean that the energy and utilities industries are in need of innovation. Both need to take more risks—whether to uncover new supplies of oil, run giant wind farms, produce cheaper solar cells, develop next-generation nuclear energy facilities, or focus on alternative energy sources.

The industrial revolution started with the steam engine and remains dependent on energy produced from natural resources. The process begins when energy companies extract fossil fuels such as oil, coal, and natural gas from Mother Earth. These natural resources are turned into electricity and delivered to the consumer's door by power utilities companies, or they are processed into fuels, such as gasoline, propane, heating oil, or industrial coke for making steel. They are supplemented by water-powered hydroelectric generators and nuclear generators powered by uranium. In any case, the result is the energy on which industrial countries depend. Without it we could not run our home appliances or our factories, travel by car or airplane, talk on the phone, or watch television.

Conflicting forces will shape the future of the energy industry. Deregulation, initiated by the 1992 National Energy Policy Act, is transforming energy companies from regulated monopolies to free-market competitors, changing the face of the utilities industry. Continuing expansion of industrial development across the planet will spur increased global consumption of energy. However, that will cause worsening pollution and the depletion of natural resources, raising the question: Can we continue using energy as we have been? Probably not.

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