Industry depends on availability of abundant low-cost energy. Large quantities of energy are needed to run factories as well as to transport inputs into factories and products from factories to consumers. Energy is also needed to produce food, keep homes comfortable, and transport people. Since the Industrial Revolution, the necessary energy has been provided primarily by the three fossil fuels.
Key Issue 2: Why Do Industries Face Energy Challenges?
Energy Supply & Demand Industry depends on abundant low-cost energy. Large quantities of energy are required to operate factories as well as to transport inputs into factories and products from factories to consumers. Energy is also required to produce food, keep homes comfortable, and transport people.
Demand The heaviest consumers of energy are in developed countries, whereas most of the energy sources are currently found in developing countries. As resources are not distributed evenly, the supply and demand of energy resources is an issue dividing developed and developing countries.
Energy Supply Earth’s energy resources are not distributed evenly. Historically people depended on animate power, which is power supplied by animals or the people themselves. Today, five-sixths of the world’s energy is supplied by three fossil fuels—coal, petroleum, and natural gas. A fossil fuel is an energy source formed from the residue of plants and animals buried millions of years ago. Pressure and chemical reactions converted them to the energy sources we use today.
Coal replaced wood as the leading energy source in North America and Europe during industrialization. Even though petroleum was first pumped in 1859, it did not become an important energy resource until the diffusion of motor vehicles in the twentieth century. Natural gas, once thought to be a waste product, is now used to heat homes and produce electricity. These three fossil fuels are nonrenewable resources that have finite supplies and can be exhausted. The United States is highly dependent on all three fossil fuels.
Energy Demand The demand for energy is evenly divided between developed and developing countries. The consumption of fossil fuels has been increasing at a faster rate in developing countries. China uses more energy that the United States. The highest per capita consumption of energy is still in North America, where one-twentieth of the world’s people consume one-fourth of the world’s energy. Demand for energy comes from four primary types of consumption in the United States:
Industries Factories use approximately 40 percent natural gas and 30 percent each coal and petroleum. Coal is used to generate electricity.
Transportation Almost all transportation systems run on petroleum products.
Homes Natural gas and coal provide approximately equal shares of home needs.
Commercial Stores and offices have uses and sources similar to those for homes.
Energy Production Fossil fuels are not distributed evenly. The uneven distribution of fossil fuels reflects how they were formed.
Distribution of Coal Changing Situation Factors: Steel The two principal inputs in steel production are iron ore and coal. Most steel was produced at large integrated mill complexes. They processed iron ore, converted coal into coke, converted the iron into steel, and formed the steel into sheets, beams, rods, or other shapes.
Changing Distribution of World Steel Production As manufacturing has shifted to new industrial regions so has steel production. In 1980, 81 percent of world steel was produced in developed countries. A shift occurred between 1980 and 2016 with developed countries producing only 35 percent of the world’s steel. Developing countries produce 65 percent of the world’s steel. The amount of steel produced has also increased. In 2017, China produced over 50 per cent of the world’s steel.
Changing Distribution of U.S. Steel Production Because of the need for large quantities of bulky, heavy iron ore and coal, steelmaking traditionally clustered near sources of the two key raw materials. Within the United States, the distribution of steel production has changed several times because of changing inputs. As sources and importance of these inputs changed, so did the optimal location for steel production within the United States. The increasing importance of proximity to markets is demonstrated by the recent growth of steel minimills. Rather than iron ore and coal, the main input into minimill production is scrap metal. Minimills are less expensive to operate than traditional steel mills and they can locate near their markets because their main input—scrap metal—is widely available.
Industrial Change in Developed Regions In developed countries, industry is shifting away from the traditional industrial areas of northwestern Europe and the northeastern United States.
Intraregional Shifts in North America In the United States, industry has shifted from the Northeast toward the South and West. The principal lure for many manufacturers to locate in the South has been right-to-work laws. A right-to-work law requires a factory to maintain a so-called “open shop” and prohibits a “closed shop”.
In a “closed shop” a company and union agree that everyone must join a union to work in the factory. In states with right-to-work laws it is much more difficult for unions to organize factory workers, collect dues, and bargain with employers from a position of strength.
Intraregional Shifts in Europe Manufacturing has diffused from traditional industrial centers in northwestern Europe towards Southern and Eastern Europe. Government policies have encouraged relocation of industries to economically distressed peripheral areas. Since the fall of communism in the early 1990s, investment in Central Europe has increased, especially in Czechia, Hungary, Poland, and Slovakia. Central Europe offers manufacturers two important site and situation factors: labor and market proximity.
11.2
Active solar energy Solar radiation captured with photovoltaic cells that convert light energy to electrical energy.
Animate power Power supplied by animals or by people.
Biomass fuel Fuel derived from wood, plant material, or animal waste.
Demand The quantity of something that people wish to consume and are able to buy.
Fission The splitting of an atomic nucleus to release energy.
Fossil fuel An energy source formed from the residue of plants and animals buried millions of years ago.
Fusion Creation of energy by joining the nuclei of two hydrogen atoms to form helium.
Industrialization The process by which an economy is transformed from primarily agricultural to one based on the manufacturing of good
Mercosur (or Southern Common Market) An economic supranational organization dedicated to improving trade between it's members in South America
Nonrenewable energy Energy from a source that is depleted when used, such as fossil fuels or nuclear
Organization of Petroleum Exporting Countries (OPEC) A supranational organization of countries (mainly in Southwest Asia and Africa with Venezuela) dedicated to maintaining a steady supply of oil
Passive solar energy systems Solar energy systems that collect energy without the use of mechanical devices.
Potential reserve The amount of a resource in deposits not yet identified but thought to exist
Proven reserve The amount of a resource remaining in discovered deposits.
Renewable energy Energy from a source that is not depleted when used, such as wind or solar power
Right-to-work law A U.S. law that prevents a union and a company from negotiating a contract that requires workers to join the union as a condition of employment
Right-to-work state States in the USA whose laws prevent unions from requiring people to join the union to work in an industry (mainly Republican states)
Supply The quantity of something that producers have available for sale.