There is an increased global focus today on energy as a societal, sociopolitical and strategic resource. In addition, there is a greater focus than ever before on the impact of energy consumption on the environment. The development and implementation of cleaner technologies will receive a boost going forward, whether it’s cleaner burning of the world’s immense stores of coal; the construction of advanced-technology nuclear generating plants that are exponentially safer than older models; or the use of advanced, more cost-effective renewable technologies based on solar and wind power.

The global energy numbers:

Oil: According to the latest data available from analysts at energy giant BP, the world produced 81.6 million barrels of oil daily during 2006, up from 81.2 million the previous year. This includes unconventional petroleum output from such sources as oil shale, oil sands and natural gas liquids. However, it does not include alternative sources such as biomass and coal derivatives. Consumption in 2006 was 83.1 million barrels of oil per day, up, from 83.0 in 2005. Total commercial oil stocks in the world’s developed nations (Organisation for Economic Co-operation and Development or OECD members) were nearly 2.7 billion barrels as 2007 began. Proven reserves totaled 1.2 trillion barrels at the end of 2006, approximately even with the previous year.

Natural Gas: Global production of natural gas was 2.86 trillion cubic meters in 2006, up from 2.78 trillion in 2005. Consumption was 2.85 trillion cubic meters, up from 2.78 trillion the previous year. Proven reserves totaled 181 trillion cubic meters: enough to last more than 60 years at today’s consumption rates.

Coal: Global production of coal was 3.40 billion tons of oil equivalents in 2006, up substantially from 2.91 billion tons the previous year. Consumption was 3.09 million tons during 2006, up from 2.95 million the previous year. The use of coal is continuing to grow sharply, particularly in China, despite the fact that it can be heavily polluting unless the latest clean coal technologies are utilized. Global coal reserves are massive, at 909 billion tons or enough to last for 300 years at today’s consumption rates.

In the U.S., the Department of Energy estimates oil production at 5.1 million barrels per day from 501,000 wells during 2006. While production in many of America’s largest fields, such as the North Slope in Alaska, is down substantially, investments in offshore production and enhanced recovery in older fields has paid off handsomely. Meanwhile, America’s use of petroleum has led to a 288% increase in annual petroleum imports from 7,469,646 billion BTUs in 1970 to 29,029,406 billion BTUs in 2006.

U.S. crude oil production peaked in 1970 and has declined gradually over the years. In 1970, production was about 9.64 million barrels per day, compared to only 5.1 million in 2006, a decline of about 47%. The U.S. consumes about 21 million barrels daily.

Meanwhile, only 148 refineries operate in America, down by more than 50% since 1980. These remaining refineries have invested heavily in additional capacity, but many new refineries are needed.

Total American consumption of energy of all types was 99,872,821 billion BTUs in 2006, up 47.2% since 1970.

According to the U.S. Department of Energy, electric generation in America as of 2006 used the following ratio of fuels: coal 52%; nuclear 21%; natural gas 16%; and renewable, which includes hydroelectric, wind and solar, at 10%. Most of that “renewable” energy source is hydroelectric, which America has used for decades. Other sources such as solar are growing rapidly, but they clearly have a long way to go to make a significant impact. Fuels for electric generation vary widely around the globe, but coal, oil and natural gas are common sources. In Europe, a large ratio of electricity is generated by nuclear plants, especially in France, and massive investments are being made in solar and wind generation.

Ever since Colonel Drake drilled the first true oil well in the American state of Pennsylvania in 1859, the ability of oil and natural gas to power electric generation plants, transportation, homes and industry has created both immense economic advances and significant controversy. Many times it has been assumed that the world would quickly run out of oil. In 1939, and again in 1951, the U.S. Department of the Interior warned that all of the Earth’s oil reserves totaled only enough to fuel the world’s nations for about 13 years. In fact, rather than becoming scarcer over time, energy has become much more plentiful. Over much of the history of the energy industry, prices gradually became lower and lower on an inflation-adjusted basis, while a combination of advancing technologies, determined entrepreneurs and alternative sources exponentially expanded the total amount of energy and global reserves available for consumption.

Estimates of “recoverable” crude (a higher amount than “proven” reserves) on a global basis published by reliable sources in 2006 ranged from 3.74 trillion to 4.82 trillion barrels—enough to take care of the world’s needs for more than 100 years. Estimates of the “total fossil fuel” remaining underground range as high as 14 trillion barrels of oil equivalent, including tar sands and other relatively difficult to produce structures. Technologies will continue to be enhanced, enabling the recovery of significant portions of these resources, as long as the market price of energy is high enough to justify investments in technology, exploration, development and production.

There have long been periods of major fluctuations in price for oil, coal and natural gas. Today, energy consumers of all types, from residential consumers to transportation firms to industrial plants, are suffering the economic effects of greatly increased energy costs. Today’s rapidly growing global demand for energy combined with political strife in many oil exporting nations could easily lead to a long-term period of relatively high market prices, both for crude oil and natural gas. The price of Arabian light crude oil rose from about $1.85 per barrel in 1972 to about $40 in 1981 during an “energy crisis,” a vast increase and the peak price for many years to come. Adjusted for inflation, that $40 barrel of oil would be $100 or so in 2007 dollars.

More recently, during 1986 and again in 1998, the price of a barrel of oil plummeted to about $10 in a short period of time. However, costs have been rising quickly since 2003. In the fall of 2005, the post-Hurricane Katrina price of a barrel of light U.S. crude oil peaked just shy of $70 as the extent of the damage to production became apparent. The price of natural gas more than doubled from June through October 2005, rising from about $6 to about $13 per million BTUs. In mid-2006, the price of light U.S. crude peaked at about $80. By late 2007, it had neared $100. The price of gasoline increased significantly in U.S. markets during 2005 and swung up and down wildly during 2006. By 2007, consumers were learning to live with gasoline above $3.00 per gallon.

Consumers have shown a true sea change in their preferences and priorities as a result of energy price increases, and the era of the gas-guzzling, giant family truck or SUV as a standard is winding down. Meanwhile, consumers and businesses alike are increasingly willing to invest more in the initial cost of green buildings, high-efficiency appliances and equipment and energy-saving vehicles, with the promise of lower energy costs for daily operation.

Today’s higher prices for oil and gas put a new emphasis on production from alternative oil sources such as tar sands in Canada and oil shale in the U.S. Meanwhile, offshore exploration and production will continue to be emphasized in many parts of the world, with sophisticated rigs drilling ever deeper to tap massive reservoirs, using technologies that enable the rigs to go to depths undreamed of 20 years ago. Vast new investments in very deep offshore wells in the Gulf of Mexico will bring significant new production to the market over the mid-term.

Consumers and business organizations alike are suffering from higher energy costs. Many are reacting with new conservation efforts. Toyota’s hybrid-powered automobiles are selling as fast as the company can make them. Massive new solar and wind projects are popping up around the world. Greatly enhanced building materials and appliances that provide much greater energy efficiency are becoming standard in developed nations. Meanwhile, the growing industrial base and middle class in many parts of the globe, particularly India and China, are putting new strains on energy supplies while energy emissions are creating new environmental concerns.

In 1892, Thomas Alva Edison established the Pearl Street Station in New York City—the world’s first central electric power station. By the 1920s, electricity was in common use in American buildings and homes, and millions of automobiles were clogging American streets. Today, America is the world’s greatest energy consumer. The U.S. accounts for about 25% of the entire world’s petroleum consumption. A significant portion of oil consumption is used as fuel for transportation, including cars, aircraft and trucks. There is no end in sight to the need for power and fuel in developed and emerging economies such as the U.S., the European Union, Japan, India and China. In contrast, as much as one-third of the world’s population either has no access to, or cannot afford, a steady supply of electricity.

The U.S. has become much more energy efficient by one measure: In 1970, America required about 1.3 barrels of oil to produce the equivalent of $1,000 in GDP (measured in 2004 dollars). By 2004, the amount of oil required to create the same $1,000 in GDP had dropped to 0.64 barrels—an indicator that energy use has become more efficient in many ways (and American productivity has increased and evolved in general), despite the vast numbers of relatively low-MPG vehicles on the road. Put another way, during about the same period America’s consumption of energy of all types, for each dollar of GDP, has dropped from about 17,000 BTUs to 9,000, a reduction of about 50%.

The U.S. contains only about 2.5% of the world’s known natural gas reserves. Natural gas consumption has been growing rapidly, and this demand has pushed prices to very high levels. About 16% of U.S. electricity is generated at gas-burning plants, so the cost of natural gas has hurt electricity consumers in many parts of the nation. At the same time, however, the U.S. sits on immense quantities of coal, about 25% of the world’s reserves. America’s 1,300 coal-fired electric plants already create over one-half of the nation’s electricity, and technologies that enable coal to be burned in a cleaner manner will be adopted across the nation. However, the price of coal has been soaring in the U.S., along with the cost of oil and gas.

During the 1900s, once Americans developed the habit of guzzling energy both at home and at work, they exported that ethic to the citizens of other developed nations, although consumers outside the U.S. tend to use much less energy per capita. Major cities worldwide rapidly became electrified at the same time that the use of fuel-thirsty automobiles, trains and airplanes caught on around the globe, following the spread of the industrial age. That trend continues today, as booming economies in China and India are creating immense internal increases in the use of oil, coal and gas. Energy demand is soaring worldwide, presenting massive challenges for producers, consumers and regulators while creating major economic and environmental challenges as well.