The term "energy" is often used interchangeably with the term "power," but incorrectly so. Energy is defined as the capacity to do work and is measured in joules (J) or watt hours (1 Wh = 3600 J). Power is the work done per unit time and is measured in watts (W), ie, joules per second.

Energy is subdivided into 2 categories, primary and secondary. Primary energy is recovered from natural resources such as solar radiation, falling water, wind, coal, petroleum products and uranium. It is consumed by primary energy industries such as electric-power generating stations and oil refineries. A significant portion is lost in storage, processing and transportation before primary energy is delivered to consumers as secondary energy. Further energy is lost through the inefficiencies of conversion devices (cars, appliances, heaters, etc) that transform the secondary energy into useful work.

Primary energy resources are frequently described as renewable or nonrenewable. Renewable energy resources include geothermal heat, falling water, tidal forces, wind action, solar input, vegetable and animal matter, and ocean thermal gradients. Nonrenewable resources include hydrocarbon materials such as natural gas, crude oil, bitumen and coal, as well as isotopes from which energy may be extracted through nuclear fission or nuclear fusion. The extraction of primary energy resources and their use, either direct or after conversion to secondary forms, have resulted in the evolution of sophisticated technologies and systems during the 20th century. There have been rapid developments in resource exploitation, mining, refining, machine design and operation, pipeline transportation, electric-power transmission and energy marketing. Since 1900 world annual energy consumption has increased more than 10-fold. The expected large growth in future world population would mean that continued increase in per capita energy demand would double the world's energy requirement again between 1980 and 2000. Human ingenuity would be taxed to meet such a supply challenge.

Resources

The bulk of purchased secondary energy is provided by non-renewable resources - crude oil, coal and natural gas. Additional energy was derived from noncommercial renewable sources such as wood wastes and animal refuse (Biomass energy), solar energy, wind action and geothermal steam (see Wind Energy, Geothermal Energy). Renewable energy forms are particularly important to those developing areas of the world where crude oil and natural gas are neither indigenous nor affordable, and where sophisticated systems of power generation, transmission and distribution have not yet been introduced. In many such areas, population pressure is leading to an increased demand for energy and other resources and consequently to a rapid denudation of the world's forested tropical and subtropical zones. Concern is growing, therefore, about serious future climatic and ecological changes that may be precipitated on a worldwide scale as a result of the existing, often rapacious, exploitation of the forests.

World dependence on crude oil as an energy source has grown remarkably but oil production levels fluctuate, most often due to corporate strategy or political situations. In 1985 production dropped to 9.1 million m3/day from 10.5 million m3 in 1979. The decrease was partly caused by a glut of oil which developed following a 2-fold price increase imposed in 1979-80 by the Organization of Petroleum Exporting Countries (OPEC). Another factor affecting the decrease was the increased cost of developing replacement reserves for those being consumed so rapidly. Economic problems in Asia dampened world oil demand in 1998, weakening the world oil market. Concurrently, production from non-OPEC countries rose, but production cuts from OPEC and some non-OPEC producers did not balance the market. Consequently, oil prices declined dramatically from the post-Gulf War highs in 1997 to 12-year lows. The price for benchmark crude West Texas Intermediate (WTI) averaged US$14.40 per barrel in 1998, a 30% decrease from 1997.

Increased Reliance on Sources

Hence, even assuming that judicious use and conservation of energy supplies will be pursued in the coming decades, it appears that increased reliance must be placed on coal, nuclear power and renewable energy sources. Unfortunately the development of each of these is likely to be impeded. The mining, transportation and combustion of coal impose severe environmental hazards which could restrict the industry's growth rate. Not the least of the concerns is that burning vast quantities of coal would cause a significant increase in the carbon-dioxide content of the Earth's atmosphere, and this might have a serious effect on the world's climate.

The direct environmental damage resulting from the installation and operation of nuclear power plants is much less severe. In fact, many technical experts consider nuclear power to be the most benign of all energy sources available for future long-term use. Antinuclear activists, however, have campaigned against this energy option on the basis of perceived hazards of low-level radiation effects, nuclear accidents, management of spent nuclear fuel, and the proliferation of nuclear weapons.

The development of renewable energy resources has been curtailed by economic constraints. Meaningful sources of geothermal steam, for example, are few in number, and many of them are located far from large consumer centres. Similar limitations apply to the relatively small number of large hydroelectric sites remaining to be developed. Perhaps the most promising future prospect for renewable resource development is in the utilization of solar energy for direct use in heating, and for conversion to hydrocarbons or for generation of electricity. Many technical and economic challenges remain to be overcome, however, before solar energy can successfully compete with the traditional nonrenewable energy sources. Most industrialized countries are not expected to become self-sufficient in long-term energy supplies because of the paucity of indigenous sources. Canada is an exception. It has a large landmass, a relatively small population and a profusion of proven and potential resources that include crude oil, natural gas, oil sands, coal, undeveloped hydroelectric sites, large uranium deposits and a highly sophisticated nuclear technology. The federal-provincial sharing of responsibility for resource control, ownership and taxation imposes barriers to efficient development, but the plethora of resource wealth may be large enough to overcome such man-made obstacles.

Canadian Overview

In Canada in 1998, conventional light crude oil production increased, mainly due to the East Coast Hibernia offshore field, which completed its first full year of production. Synthetic crude and bitumen production also rose. However, conventional heavy crude oil production declined as production was suspended in a significant number of wells because of low prices.

Overall, oil exploration and development decreased in Canada in 1998, due to sustained low oil prices. Many western Canadian producers shifted their focus to gas drilling. However, in contrast to the overall slowdown in activity in western Canada, exploration and development in offshore regions of the East Coast and northern onshore areas increased.

North American natural gas prices declined slightly in 1998 and Canadian natural gas prices remained at levels lower than average US market prices. Although natural gas production decreased slightly, exports increased by about 6%. Drilling for natural gas remained fairly stable and reserve additions are expected to replace a large portion of production in 1998.

Canadian electricity exports fell slightly from the elevated levels experienced between 1994 and 1997. Imports met increased domestic requirements, which resulted in part because of the temporary removal from service of 7 nuclear power plants in Ontario.