Energy resources are generally defined as anything that can be used as a source of energy. Some important energy resources are oil, natural gas and coal. Access to energy resources is vital to economic development and prosperity. The world's available energy resources threatened to be strained by population growth and rapid economic growth in large countries such as China. At the same time, it's vital that the world develop new energy resources that do not contribute to global warming and other environmental problems.
Oil Price Volatility
Oil is currently the world's most vital energy resource. The market price and availability of oil is highly volatile. It has swung wildly over the years with cycles of economic growth, political instability in oil-producing regions such as the Middle East, the time it takes to find new oil deposits and develop new wells, and with the cycles of investment in the development of new oil wells.
Oil Price Spike
Oil prices rose to the highest levels in years in 2008, largely because of demand from China and other fast-growing, developing-world economies. High oil prices caused high gasoline prices in the United States. That cut into the disposable income of American families and the capital that American businesses had available to invest and contributed to that year's economic recession.
Peak Oil
Oil prices have since declined but many policy makers and market analysts believe that they could easily rise to high levels again when the economy recovers. Some market analysts subscribe to a theory known as "peak oil," which holds that the efficiency with which oil can be produced has peaked. Peak-oil theorists believe that all of the oil that was easiest to find and extract has already been found and that in the future, producing more oil will be more expensive.
Global Warming
Generating energy from oil produces greenhouse gases that contribute to global warming. Other major energy resources, including coal, also emit greenhouse gases. That's why governments around the world, including the United States, are enacting policies to encourage the development of alternative energy sources such as ethanol and other bio-fuels and cars that run on electricity rather than gasoline.
Alternative Energy
Alternative energy sources include ethanol, wind power and solar power. All of these produce fewer greenhouse gases than oil or coal and, when more developed, could help the United States to be less dependent on other countries that produce more oil.
For the most part, however, alternative energy sources have not been developed to the point where they could produce energy as cheaply or efficiently as can be done with oil, natural gas or coal.
Alternative Energy Drawbacks
Many alternative energy sources also produce their own environmental impacts. Ethanol, produced from agricultural crops such as corn, requires heavy use of water. Diverting food crops and farmland for alternative-energy development has also been blamed for contributing to higher food prices and hunger in developing-world countries.
