betasam's Journal: The "Energy Crisis" and The IT industry

We all knew that an energy crisis spurred by vagaries in oil production/distribution was imminent. Most people quote Hubbert's Peak as a sort of prophecy of what was to come. The original year Hubbert (in 1956) predicted was 1971, which after further study was moved to 2004 (in the 1990s.) This year 2005, we are told that the Oil Crisis is here.

I believe that this is only a start to a major energy crisis we are all about to face. Attempts at Nuclear Fusion Reactors (though due only in 2016) are on, and alternate sources of energy are vigorously being explored. The world's economy has been anchored on Petro Dollar recycling that we hardly notice its effects. However, with oil production reaching critical levels, this system could have adverse effects on the international macro-economic system.

Roughly put, the economy of many countries who are not self-sufficient in oil production during the fall, will suffer. This would include countries gunning for near 10% growth (think China, India?, the developing world.) Consequentially, the consumer economy that has been driving growth in these developing countries would reach a stand-still.

• Potential IT markets, which bank on content and service delivery to the consumers will need to restructure their costs.
• Computing equipment will need to be more power savvy than they have been in the past.
• IT development and service centres will no longer be able to sustain within a single city as power distribution problems (in crisis) creep in.
• Life cycles of computing devices and software will consequentially increase. (A sort of stretch in the pace of development is bound to occur.)
• With hardware manufacturing costs (and shipping costs) hitting an all-time high, the focus will be on making better software on available computing hardware.
• Distributed development hanging on to less reliable communication networks will be the order of the day.

The production of oil might take another two(2) years to start dropping (the prices during this drop will fluctuate as predicted by markets, with a possible low within this year.) The energy crisis (as any crisis - be it war, famine or natural disaster) presents an opportunity to Techpreneurs. The reason being, the environmental variables are poised for change and opportunity with adaptability will present itself (despite the scale of difficulties that will exist.)

It will also be interesting to observe strategies adopted by various countries to outlast the crisis and move to multiple alternatives. (The bitter lesson has been that we have relied too much on a single source - fossil fuels for energy.) Standard crisis procedures including rationing, socialistic government control of key industries may be a common backdrop.

Some More Reading

[betasam]

This article [businessweek.com] from Businessweek conveys the opinion that the average investor is not bothered about the AMD vs Intel Lawsuit in any manner whatsoever. The market response, it is written, was almost non-existent. It seems Intel's capital might is still withstanding. Thanks to a friend for pointing this out.