Global Energy Distribution, Demand and Insecurity

Energy supply and demand do not always match

Energy supports everyday activities such as cooking, heating and transport, as well as farming and industrial production. Energy consumption is the amount used; energy supply is the energy available to meet those needs.

An area has an energy surplus when supply exceeds demand and a deficit when supply falls short. A country whose domestic production cannot meet its consumption has an energy gap and may need imports. However, importing energy does not automatically mean that people lack secure supplies: reliable, affordable imports can close the gap.

Energy security means having reliable, uninterrupted access to enough affordable energy. Insecurity can therefore involve more than a physical shortage. Energy may be available but too expensive for households, or electricity may not reach particular communities. HICs, NEEs and LICs can all experience insecurity, although the reasons differ.

The uneven global pattern

Energy consumption is unevenly distributed. Consumption per capita means consumption per person, which allows countries with different population sizes to be compared. It is different from total national consumption.

High consumption per person is common in North America, Europe, Australasia and parts of the Middle East. Examples include Canada, Norway and Saudi Arabia. These countries generally have energy-intensive lifestyles and economies. Consumption per person is much lower in many LICs, including Niger, Chad and Tanzania.

The pattern is changing as economies develop. North America, Europe and Eurasia together accounted for more than 80% of global energy consumption in 1965. Their consumption subsequently increased, but their share of the global total declined as consumption elsewhere grew faster, especially in the Asia Pacific region. A falling share does not necessarily mean falling consumption.

Supply is also uneven. Fossil fuels remain major global energy sources, but their deposits are concentrated in particular places. Important producers include the USA, Canada, Norway, Russia, Australia and countries in the Middle East. Some major producers also consume large amounts themselves, so production alone does not show how much energy is available for export.

Some countries produce little energy because they lack suitable resources; others have resources but lack the money or technology to exploit them. Countries with high demand but insufficient domestic production depend on imports. Wealthier countries can often pay for these imports, helping explain why much of North America and Europe can maintain relatively secure supplies despite import dependence. Many countries in central and southern Africa experience difficulties accessing reliable, affordable energy.

Why energy consumption is increasing

Three connected changes drive rising demand: population growth, economic development and technology.

Population growth increases the number of people needing food, housing, transport and goods. The global population reached 8 billion in 2022. Energy is needed not only in people's homes but also to produce and deliver what they consume. Much population growth has occurred in LICs and NEEs, where extending energy supplies can already be difficult.

Economic development increases energy use across several sectors. Expanding factories need power for machinery, heating and lighting. More intensive farming uses machinery and energy for heating and lighting. Greater car ownership and movement of goods increase demand for petrol, diesel and electricity. Urbanisation also increases demand for buildings, services and domestic appliances.

As incomes rise, households can buy more appliances and technology. Technology increases the number of energy-using devices in homes and workplaces and requires energy during manufacture as well as use. Although individual devices may become more efficient, a growing number of devices can still increase overall consumption.

Physical factors shape potential supply

Geology determines where coal, oil and gas deposits occur. Having demand for these fuels does not mean a country has deposits beneath it.

Location and accessibility affect whether resources can be exploited. Oil and gas beneath the seabed require equipment capable of reaching offshore deposits. Remote reserves can also be difficult to reach and connect to consumers.

Physical conditions influence renewable supplies too. Sunshine and wind affect solar and wind generation; plentiful water and suitable valleys favour hydroelectric power; some tectonically active areas offer geothermal energy. Extreme heat or cold can disrupt equipment and transport. Physical potential therefore varies between places and does not guarantee a constant supply.

Costs, technology and politics affect usable supply

A resource must be economically worthwhile to exploit. Extraction and production involve equipment, construction, wages and transport costs. Difficult locations can make these costs particularly high. If the expected income is lower than the cost of production, a resource may remain unused. Changes in energy prices can therefore make the same reserve profitable at one time but unprofitable at another.

Technology can increase the supply available from existing resources. Improved drilling allows previously inaccessible deposits to be reached, while hydraulic fracturing, or fracking, enables gas to be extracted from shale rock. Advances in renewable technology and energy storage can also improve the cost and usefulness of energy supplies. Technology is therefore both a cause of rising demand and a factor that can increase supply.

Political decisions influence investment and trade. Government subsidies can encourage renewable generation. Relationships between importing and exporting countries affect the reliability of deliveries, while conflict can disrupt production or transport. Libya's civil war, beginning in 2011, affected oil supplies. Russia's invasion of Ukraine also affected gas supplies. These examples show why access to a resource depends on more than its physical existence.

Insecurity can push exploitation into sensitive environments

When demand outstrips secure supplies, countries may seek resources in increasingly difficult locations. Exploration for oil and gas in Siberia and Alaska brings high costs because specialised technology and workers are needed in remote, harsh conditions. It can also damage fragile polar and tundra ecosystems.

Offshore extraction carries the risk of accidents and oil spills. The Deepwater Horizon incident in the Gulf of Mexico illustrates how seeking energy supplies can damage marine ecosystems.

Pressure to provide more energy can affect land as well. Clearing tropical rainforest to grow biomass crops removes habitats, reduces biodiversity and exposes soil to erosion. Losing trees also reduces carbon storage. Wind and solar farms can change the appearance of valued landscapes. Increasing supply can therefore bring environmental costs as well as greater security.

Effects on food and industrial production

Energy insecurity can create competition between energy and food production. If farmland is used to grow biofuel crops, less land may be available for food crops, putting upward pressure on food prices. Farmers may respond through more intensive production, which itself requires energy and can add to demand.

Industry depends on both reliable power and manageable energy costs. Power cuts interrupt machinery and reduce output. Rising or fluctuating prices make production more expensive and profits less predictable. Businesses may increase their selling prices, but this can make them less competitive than producers elsewhere. In severe cases, factories close, jobs are lost and national economic output falls.

These consequences can reinforce one another: securing extra supplies may raise costs, while higher costs can make energy less affordable even if physical supply increases.

Why insecurity can lead to conflict

Where demand exceeds supply, users compete for limited energy. Rising prices can create tensions between those who can afford energy and those who cannot. If shortages threaten power cuts, governments may have to choose which users receive priority, creating disagreements between households, businesses and other services.

At an international scale, an exporting country can use energy supplies as a bargaining tool. Importers may feel vulnerable to restrictions or interruptions. Disputes can also concern ownership of reserves or control of transport routes. Oil resources and their control have contributed to tensions between Sudan and South Sudan.

Conflict is a potential consequence, not an inevitable result, of energy insecurity. The relationship also works in the opposite direction: conflict can interrupt supplies and deepen insecurity.

Global pattern

• High consumption per person: North America, Europe, Australasia and parts of the Middle East; examples include Canada, Norway and Saudi Arabia.
• Low consumption per person: many LICs, including Niger, Chad and Tanzania.
• Major fossil-fuel producers: USA, Canada, Norway, Russia, Australia and the Middle East.
• Supply and consumption do not always match. Imports can fill a domestic energy gap.
• Security depends on reliability, affordability and access, not just domestic production.

Rising demand

• Population growth: more homes, food, goods and transport.
• Economic development: expanding industry, intensive farming, urbanisation and car ownership.
• Technology: more energy-using appliances and equipment.

Factors affecting supply

• Physical: geology, climate, offshore or remote locations, water availability.
• Costs: equipment, wages, transport and energy prices determine profitability.
• Technology: access to difficult deposits, fracking, improved generation and storage.
• Politics: subsidies, international relationships and conflict. Examples: Libya's civil war and Russia's invasion of Ukraine.

Consequences of insecurity

• Difficult exploration: Siberia and Alaska — high costs and fragile ecosystems.
• Environmental costs: offshore spills, rainforest clearance, habitat loss and landscape change.
• Food: biofuels compete for land; reduced food supply can raise prices.
• Industry: power cuts and higher costs → lower output and profits → possible closures and job losses.
• Conflict: competition between users, disputes over reserves and supply used as political leverage. Sudan and South Sudan illustrate tensions over oil resources.
• Conflict can also cause further energy insecurity.