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Since 1929 is a frequent topic these days, I checked out world oil consumption from 1929 to 1939, and I found that world consumption in 1939 was up from 1929. In fact, it looks like 1930 was the only down year in this time period. One of the factors contributing to the increase in consumption was that millions of people wanted to drive cars for the first time. For example, there were three million more cars on the road in the US in 1937 than in 1929, according to Frederick Allen. Today, hundreds of millions of people worldwide want to drive cars for the first time, while oil consumption worldwide is up about tenfold from the Thirties.

If we cut the average speed of all vehicles by half, fuel consumption would decrease by a whopping 75 percent. Breaking speed records was an almost daily occurence throughout the 20th century. Cars, ships, planes and trains became faster and faster, year after year. Because the power needed to push an object through air increases with the cube of velocity, this race to ever higher speeds raises energy consumption exponentially. Engineers treat velocity as a non-variable, while in fact it is the most powerful factor to save a really huge amount of energy - with just one stroke, at minimal cost, and without the need for new technology. Lower speeds combined with more energy efficient engines, better aerodynamics and lighter materials could make fuel savings even larger.

The Wall Street Journal's Rebecca Smith is becoming required reading. Today she has a great piece on the effect declining electric consumption is having on utilities. A trend is developing in pockets of the country where household and business consumption of electricity is falling. Experts concede that this shift is not necessarily a knee-jerk reaction to the worsening economy, but is perhaps a new reality that presents a serious problem for utilities.

Informing individuals about the resource use and environmental consequences of their energy consumption can be surprisingly difficult. Do you ever read the little flyers that your utility or your energy retailer puts in your bill? Nope, I don't either. But in general we're pretty clueless about our energy consumption, because we do not have timely information that shows us how much we're using, and how much we're spending, so we have little incentive to go out and find information about energy efficiency. Even my students, undergrads and MBAs at one of the best universities in the world, don't generally realize that, for example, 90% of the energy used in an incandescent light bulb produces waste heat, not lumens. In part the challenge is that it's an information push, and it's an information push in an over-informed world. Consumers rarely go out looking for ways to save energy (although $4 gas and possible recession have increased that information pull!).

Humanity is sitting on a railroad track, and a train is speeding toward us. The name of that train is global oil shortages. But, let's start at the beginning. Oil was discovered in 1859 in the United States. However, we did not appreciate its many uses, so production and consumption began slowly. During the years between World War I and World War II we learned of its many uses, but only in the last few decades have we built our dependency on oil. Now, all our clothes, food, transportation, construction depend on petrochemicals. As the oil production/consumption line has risen, the food production line has followed and also the global population line.

As the saying goes, facts are many but the truth is one. The truth is that the U.S. military is the single largest consumer of energy in the world. But as a wise man once said, don't confuse facts with reality. The reality is that even U.S. Department of Defense (DoD) does not know precisely where and how much energy it consumes. This is my Fact Zero. Below I give some facts and figures on U.S. military oil consumption based mostly on official statistics.[1] If you want to reproduce them make sure you read every footnote even if you need to put on your glasses. Also read the footnotes in this article.

How the world is fed and fueled will in large part define development in the 21st century as one that is increasingly sustainable or a dead end for billions of people. A new and hard-hitting report concludes that dramatically reforming, re-thinking and redesigning two sectors -- energy and agriculture -- could generate significant environmental, social and economic returns. Current patterns of production and consumption of both fossil fuels and food are draining freshwater supplies; triggering losses of economically-important ecosystems such as forests; intensifying disease and death rates and raising levels of pollution to unsustainable levels."

SET Energy reports that China's power consumption has slumped dramatically as economic woes cut demand - China power generation falls record amount, keeping climate hope alive. Globalcoal.com reported today that Chinese power generation fell 7% in November from last year! Huge cuts in energy-intensive manufacturing (of aluminum, steel, etc.) and warmer than usual weather resulted in this record contraction in electricity production. The reduction in thermal plant output (mostly coal) fell an even more dramatic 14% from 2007. Thus greenhouse gas emissions in the 4th quarter of 2008 will probably be significantly below the year-ago level. This development brings hope that China, the world's largest carbon dioxide emitter, may be able to slow its greenhouse gas emission growth from the torrid pace of the past several years.

It's a common misconception: The United States imports most of its foreign oil from the Middle East. Not quite. Not even close. As the table below indicates, dependence on oil from the Persian Gulf represents barely 10 percent of total domestic oil consumption, and most of that oil comes from Saudi Arabia and Iraq.

"Even if oil demand was to remain flat to 2030, 45m bpd of gross capacity - roughly four times the current capacity of Saudi Arabia - would need to be built by 2030 just to offset the effect of oilfield decline", according to Nobuo Tanaka, executive director of the IEA, speaking at a news conference in London. Oil reached a record peak of more than $147 a barrel in July, but has fallen back below $60, a drop of more than 50pc. Given the high cost of bringing on new output and the struggle to match supplies with demand, the IEA has assumed consumers will pay an average of $100 a barrel for oil over the next seven years and more beyond that. "Current trends in energy supply and consumption are patently unsustainable - environmentally, economically and socially - they can and must be altered," said Mr Tanaka. * o Text Size o click here to increase the text size o click here to decrease the text size * Email this article * Print this article * Share this article o delicious o Digg o Facebook o Fark o Google o Newsvine o NowPublic o Reddit o StumbleUpon http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/3448385/Credit-crunch-risks-world-oil-supply.html Related Content * More on Oil and Gas More on ... Oil and Gas Get feed updates Finance Get feed updates Energy Get feed updates telegraph tools Switch Utilities Save on fuel bills Search the market for the best prices on gas and electricity. Telegraph Utilities Comparison Service Advertisement telegraph financial partners Investment solutions * Investor services * Portfolio management * Investing for income guide * Inheritance tax advice * Reader guides Finance most viewed * TODAY * PAST WEEK * PAST MONTH 1. Row breaks out at easyJet 2. Abandon all hope once you enter deflation 3. B

Got your attention now? That amount of oil equivalent, three cubic miles, is how much the world uses in a year if you take into account all sources of energy, says Ripudaman Malhotra of SRI International's Chemical Science and Technology Laboratory in Greentech Media. What's more, is that by 2050 at current rates of increase the world will consume nine cubic miles of oil. Pretty sobering, but what is more sobering (it does indeed feel like cold water thrown on the renewable energy industry) is that to replace that amount of energy usage with renewable sources is nigh impossible. Here's Malhotra on the challenge laid before us in a nutshell:

THE graphs climbing across these pages (see graph in detail, or explore the data) are a stark reminder of the crisis facing our planet. Consumption of resources is rising rapidly, biodiversity is plummeting and just about every measure shows humans affecting Earth on a vast scale. Most of us accept the need for a more sustainable way to live, by reducing carbon emissions, developing renewable technology and increasing energy efficiency. But are these efforts to save the planet doomed? A growing band of experts are looking at figures like these and arguing that personal carbon virtue and collective environmentalism are futile as long as our economic system is built on the assumption of growth. The science tells us that if we are serious about saving Earth, we must reshape our economy.

I've been getting a lot of calls and e-mails from people asking about the falling prices for oil in recent weeks. The immediate explanation is that world economic activity is decelerating. Demand is falling. OPEC announced cuts in output. But the markets still believe that economic decline will trump the ability of OPEC to prop up the price of oil. Enjoy it while it lasts. Just over the horizon, things are about to become dicey. This week, the International Energy Agency (IEA) will release a new report on the future of world energy. In its World Energy Outlook, the IEA will state categorically that "Current global trends in energy supply and consumption are patently unsustainable." There's not much wiggle room in that statement. According to the IEA, despite the recent fall in oil prices, the medium- and long-term outlooks for energy supply are grim. Conventional oil output is destined to decline. Demand will still grow, however, especially in the developing world. And the twain shall only meet by prices rising to clear the market. "It is," as our Arab friends like to say, "written."

The Economist has a look at some of the factors affecting oil production, warning "Oil prices have plunged. Another spike may be on its way" - Well prepared. WITH the price of crude mired at half the peak of $147 it reached in July, this may seem like an odd time to invest in oil wells. Despite trimming its output along with other members of the Organisation of the Petroleum Exporting Countries (OPEC) in an effort to prop up prices, that is just what the United Arab Emirates plans to do. Short-term price movements, its oil minister insists, should not distract from the world's enduring thirst for oil. Indeed the collapse of oil prices, one of the few reasons around for economic cheer, may be setting the stage for another spike. Just now oilmen are focused on the rapidly slowing demand for their product. Since early October, reckons the boss of BP, a big oil firm, America's consumption of crude has fallen by perhaps 2m barrels a day, or about a tenth. Sales of cars in America fell even more steeply last month-by 32%. There is also gloomy news from emerging markets, which have been the driving force in the oil markets of late. Demand for oil is growing much more slowly in China and India, for example, and car sales are down in both countries. There is even talk of global oil demand falling next year, for the first time since 1991.

OPEC has cut oil production targets for the first time in almost 2 years to stem a collapse in prices. The 13 OPEC nations decided to lower supply by 1.5 million barrels a day from Nov 2008, oil ministers said today [24 Oct 2008] at the end of a meeting at the group's Vienna's headquarters. Crude oil has tumbled 57% from a July 11 record of $147.27 a barrel as the financial market crisis spreads, job cuts increase and fuel consumption slows. Prices fell as much as 7.1% to $63.05 on NYMEX after the decision. Another cut in December is "possible," depending on how the oil market reacts, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said.

From SUV's to long commutes, the American lifestyle is based on cheap gasoline. Cheap energy allows us to live far away from our jobs and to engage in conspicuous consumption contests based on who has the biggest automobile. Now, gas prices have skyrocketed, and higher prices at the pump are hitting us where it hurts. Since we also have a presidential election coming up in November, our pain at the pump has been hijacked and turned into a political issue. There are no quick-and-easy solutions to high gas prices, but the Republican candidate, John McCain, is promoting opening up our coasts to offshore drilling as just that: an easy solution that will result in immediate relief.

Up until Tuesday, oil was crashing down toward $110 a barrel as demand growth estimates have been clipped. So what happened to peak oil? Nothing happened; peak oil should still be a concern. For a larger context on peak oil, see my June post 'Peak oil: are we there yet?' From where I sit, I see oil as having played a major role in creating the downturn we are now experiencing. Basically, oil prices rose to the point where we cried uncle, reduced our consumption accordingly, and the economy suffered as a result. Before 1973, the world had never see an oil shock. But, this is the 4th such oil shock since the end of Bretton Woods in 1971 when Nixon ended the U.S. dollar peg to gold and ushered in an era of floating currencies. Methinks I see a connection.

How are the 1.3 billion Chinese going to cope with their growing needs for energy? Can the increase in Chinese liquid fuel consumption be maintained? Even in the face of a nearby world oil production peak? Or will China have to cope with a liquid fuel crisis in the near term future? This post focuses on whether China will or will not be able to meet their increasing demand for liquid fuels until 2015.

"WE'RE not running out of hydrocarbons," insists Tony Hayward, the boss of BP, one of the world's biggest listed oil firms. To back up this view, he cites various comforting figures from the latest edition of the firm's "Statistical Review of World Energy", released on Wednesday June 11th. Enough oil has already been discovered around the world, Mr Hayward says, to maintain consumption at current levels for another 42 years. As he recently put it, humanity has guzzled through 1 trillion barrels, but has its next trillion already lined up, and could probably unearth a third trillion if it really applied itself. Why then, are oil prices hovering over $130 a barrel?