Write an article on energy crisis in the world. Hints: Definition, causes and
incidence (ANY ONE) and social and economic impacts.
Answers
Answer:
An energy crisis, like any other crisis in the field of economic activity, can be brought about by a number of factors: organised labour strikes, embargoes by governments, over-consumption, aging infrastructure, and bottlenecks at production centres and port facilities.
Pipeline failures and other accidents may cause minor interruptions to energy supplies. A crisis could possibly emerge after infrastructure damage from severe weather.
Attacks by terrorists on important infrastructure are a possible problem for energy consumers: a successful strike on a West Asian facility could potentially cause global shortages. Political events—change of governments due to regime change, monarchy collapse, military occupation or a coup—may disrupt oil and gas production and create shortages.
The world over, the economy has come to be heavily dependent on oil consumption. Even a slight change in prices, or temporary stoppage of production or supply of oil, can cause major upheavals in economy.
In October 1973, the Organisation of Petroleum Exporting Countries (OPEC) raised the prices of oil from $ 1.5 per barrel to $ 7 per barrel. The reasons given were that oil prices were not in tune with the increase in prices of other commodities and that the countries wanted to make maximum profits while the limited reserves lasted. In 1979, the Iranian revolution caused a disruption in oil supplies.
The price in dollars per barrel shot up to 24 in 1979, 34 in 1981 before stabilising at around 20. As a result of the hike, economies were hit worldwide. The worst sufferers were the developing countries which did not have enough foreign exchange reserves to pay for oil imports. In the ensuing economic crisis, there were demands for higher wages, and cost of living went up.
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