Complex Decision-Making in Economy and Finance

14On Managing Risk in the Energy Domain: Conventional Problems Encountered

The energy field is increasingly tied to complexity issues. Nowadays, especially with regard to impending climate change requirements and future needs on sustainability, one cannot any longer model an energy crisis in traditional ways. In this chapter, we will somewhat detail the structure and elements of a crisis for better understanding. Ecologists are often reasoning from the bottom line underpinning arguments; nevertheless, social mindsets, even if biased, are present and have to be taken into consideration. Later, we will present a new holistic view of the energy issue and detail some better fit innovative modeling approaches.

14.1. From a new oil crisis (peak oil) and the resulting energy crisis

Let us analyze a topical subject: the evolution of the crises and the prices of energy and raw materials. When asking the question What do you mean by crisis?, many think of the risks of shortages and consequently of rising supply prices that will destabilize economies and therefore living conditions.

However, the fate of a raw material is linked to that of energy: indeed, a raw material is a raw product of natural origin that must be transformed in order to be used. This transformation consumes energy; so, there is no raw material without energy. That being said, we can address the problem by asking the other question Is there really an energy crisis?

14.1.1. At present, what do we mean by energy crisis? ...